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aepp.netAssociation on Employment Practices and

Principles

Proceedings of the 2002Annual International Conference

ISBN 1-878583-64-6

Conference Theme:Recovery, Renewal and Reconsideration

October 10-12, 2002New York City, New York, USA

Edited by

Margaret H. Vickers, PhDUniversity of Western Sydney

www.aepp.net

2

aepp.netAssociation on Employment Practices and

Principles

Proceedings of the 2002Annual International Conference

ISBN 1-878583-64-6

Conference ThemeRecovery, Renewal and Reconsideration

October 10-12, 2002New York City, New York, USA

Edited by

Margaret H. Vickers, PhDUniversity of Western Sydney

www.aepp.net

© 2002 Association on Employment Practices and Principles (AEPP). All rights Reserved. No part of thisPublication may be reproduced, stored in a Retrieval system, or transmitted in any form or by any meanswithout the prior permission of the AEPP.

Printed by Manhattan College, New York City, New York, USA, October 2002.

ISBN 1-878583-64-6

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AEPP 2002 Conference Proceedings

Table of Contents

ACKNOWLEDGEMENTS 8

THE ASSOCIATION ON EMPLOYMENT PRACTICES ANDPRINCIPLES 9

AEPP 2002 ANNUAL INTERNATIONAL CONFERENCEORGANIZERS 10

AEPP 2002 CONFERENCE PROGRAM 11

PEER REVIEWED PAPERS

Perceptions about Teamwork: An Empirical Comparison of Japanese, Mexican and American Faculty 14

James T. Brakefield, Western Illinois UniversityKenji Yoshida, Hosei UniversityRodney M. Walter, Western Illinois University

How to Recruit IT Workers: Reviewing Current Practices in Rhode Island 20David E. Desplaces, University of Rhode IslandLaura Beauvais, University of Rhode Island

A Response to the British Journal of Industrial Relations Symposium on TheHuman Rights Watch Report: A Minimum Program for Promoting CollectiveBargaining Rights as a Human Right 27

Victor G. Devinatz, Illinois State University

Career Planning/Management – Renewal of a Traditional Approach (A Coursewith Heavy Reliance on the Internet) 33

Erwin Rausch, Didactic Systems and Kean UniversityRobert Witheridge, Kean University

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PEER REVIEWED PAPERS CONT.

Stress Management Techniques Using Whole Body Learning and EmotionalIntelligence to Navigate Emotional Environments and Turbulent Times 39

M. Eileen Higgins, Frostburg State UniversityMarion Leonard, Frostburg State University

Effects of Diversity on Performance: Strategies Pursued by Groups 46Jack L. Howard, Illinois State UniversityJames T. Brakefield, Western Illinois University

Terrorism and Human Resource Management: Recovery Reconsideration andRenewal 52

Jack N. Kondrasuk, University of PortlandRobert B Pamplin, University of Portland

A Reluctance to Recognize the Cost of People 59Jacqueline E. LaMuth, Ohio State University ExtensionDaney Jackson, Ohio State University Extension

Competitive Advantage Through Human Resources: Employer of ChoicePrograms 67

Janet A. Lenaghan, Hofstra UniversityAlan B. Eisner, Pace University

Fanning the Flames of Controversy: Rethinking Wrongful Discharge 74Jeffrey A. Mello, Towson University

Transformational Leadership in Law Enforcement 82Stephen A. Morreale, Nova Southeastern University

Work Teams: Perceptions of a Ready-Made Support System? 90Melissa A. Parris, University of Western Sydney

Religiousness and Perception of Ethics in Other Religious Denominations 97Carolyn E. Predmore, Manhattan CollegeAlfred R. Manduley, Manhattan CollegeAhmad Goma, Manhattan CollegeFaraj Abdulahad, Manhattan College

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Managing Store Personnel to Effectively Reduce the Wasted Resourceswithin the Transition Area 104

Carolyn E. Predmore, Manhattan CollegeMary Michel, Manhattan CollegeAlfred R. Manduley, Manhattan College

The Role of Human Resources in Creating and Sustaining a CompetitiveAdvantage 109

Robert C. Preziosi, Nova Southeastern UniversityDoreen J. Gooden, Nova Southeastern University

Reconsidering Mental Illness: Reinstating the Voice of a Survivor 116Margaret H. Vickers, University of Western Sydney

Illness, Work and Organisation: Postmodernism and Antenarratives for theReinstatement of Voice 123

Margaret H. Vickers, University of Western Sydney

Case Analysis Online: A Strategic Management Case Model 130Anne M. Walsh, La Salle UniversityEithne Bearden, La Salle University

Infusion Plus!: A Synergistic Approach to E-Business Education 141Frederick D. Greene, Manhattan College School of BusinessJames G. Whelan, Manhattan College School of Business

Retention Strategies and Worker Values 147Jean Gordon, St Thomas University

Management Development or Managing Illusion? Perceptions of ManagementDevelopment Programs in Influencing How Managers Take Up their RolesTaking Into Account the Contextual Factor of Politics in Organisations 150

Heather Russell-Gale, Swinburne University of TechnologyBill Gale, W. D. Gale & AssociatesBarbara Lasky, Swinburne University of Technology

Decisions to Collude in Maladaptive Behaviour Ultimately Threaten OrganisationalSurvival: A Culture in Conflict – A Case Study 156

Heather Russell-Gale, Swinburne University of TechnologyBarbara Lasky, Swinburne University of TechnologyMia Le Fevre, Swinburne University of Technology

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Pay Equity Bills in the 107th Congress: Sheep in Wolves' Clothing 162Joel P. Rudin, Rowan UniversityKimble Byrd, Rowan University

HRM in the Australian Luxury Hotel Industry: Signs of Innovation? 168Angela Knox, University of Melbourne

Anomalies in the Pricing of Insurance for Long Term Care for the Aged 177David N. Reps, Lubin School of Business, Pace University

Re-examining the Responsibility of Auditors/Accountants to Non-Clients 183Frederick D. Greene, Manhattan CollegeAlfonse R. Petrocine, Manhattan College

PEER REVIEWED ABSTRACTS

Global Employment Practices: Learning from Levi Strauss 192Tara J. Radin, Hofstra University

The Ethics of Recent Corporate Governance Scandals: An Agency Analysis 193Richard Fitzpatrick, Manhattan CollegeLawrence Huggins, Manhattan College

Equity Accelerator or Else? An Analytical Evaluation of an Unfair Practice 194K. Topyan, Manhattan College

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ACKNOWLEDGEMENTS

The AEPP would like to thank Manhattan College, which has supported andenabled the Chairing of the Conference Program and the Printing of theseConference Proceedings. The AEPP would also like to thank the University ofWestern Sydney for supporting the Editing of these Proceedings.

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THE ASSOCIATION ON EMPLOYMENT PRACTICES ANDPRINCIPLES

The Association on Employment Practices and Principles (AEPP) is an internationalorganization of scholars and practitioners dedicated to providing a forum whichencourages conceptual and empirical research, evaluates existing and new methods, andpromotes concrete problem solving to bridge the gap between organizational conceptsand practices in the effective managing of organizations, people and performance. Theorganization reinforces the need to include the integration of an ethical and value-drivendimension in all areas addressed. Areas of specialized interests vary widely inclusive ofethics and philosophy, entrepreneurship, technology and innovation management,organizational psychology, human resource management, labor relations, and advancedleadership and management education and research. Virtually all topics and issuesconfronting diverse organizations and businesses are addressed by members.

AEPP is celebrating its tenth anniversary in 2002. It was originally formed when thefounding parent organization, the Council on Employee Responsibilities and Rights(CERR) became engaged with different strategic initiatives in 1992. CERR wasoriginally created in 1985 by Chimizie Osigweh, Virginia Distinguished Professor ofManagement, School of Business, at Norfolk State University. Under his leadership, theunderlying paradigm guiding the organization focused on employee/employerresponsibilities and rights from a variety of perspectives including philosophical, legal,and sociological.

In 1992, John P. Keenan, then Associate Professor of Management and FoundingDirector of Leadership Programs at the University of Wisconsin-Madison’s School ofBusiness, became AEPP’s Founding President. Some of the top scholars andpractitioners in the field who shared an active interest in these issues were recruited andhelped shaped the beginning stages of the organization. The widely respected top-tierjournal (Employee Responsibilities and Rights Journal) is the publication arm of theorganization and is published four times a year. Please consider submitting yourconference paper for review with the journal's conference special issue.

The annual international conference attracts scholars and practitioners from across theglobe. This year's conference theme is "Recovery, Renewal and Reconsideration" inEmployment Principles and Practices, an especially apposite topic, given the recentanniversary of the terrorist events of September 11 in New York City. We are delightedyou could join us in New York City this year and trust you will find the conferencestimulating, rewarding and supportive. We also hope you will join us again next year!

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AEPP 2002 ANNUAL INTERNATIONAL CONFERENCE ORGANISERS"Recovery, Renewal and Reconsideration"

October 10-12, 2002, New York City, New York, USA

Program ChairCarolyn Predmore, Manhattan College

Local Arrangements Co-ordinationRichard Fitzpatrick, Manhattan College

Proceedings EditorMargaret H. Vickers, University of Western Sydney

Track Chairs

Hossein Nouri, School of Business, College of New JerseyAccounting and FinanceRichard Fitzpatrick, Manhattan CollegeBusiness EthicsDavid Reps, PaceUniversityEntreneurshipAnne Walsh, LaSalle UniversityHealth Care AdministrationMargaret Vickers, University of Western SydneyOrganization BehaviourJoanne Tuffield,Public Sector ManagementSalah Khelfaoui,Quantitative MethodsL.W. (Bill) Murray, University of San FranciscoRe-Engineering/New Product DevelopmentJane Humble, Arizona State University EastTechnology and Innovation ManagementJohn Keenan,Leadership, Management Training and DevelopmentRobert C. Preziosi, Nova Southeaster UniversityGraduate Students and Human Resource Management

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AEPP 2002 CONFERENCE PROGRAM

Thursday October 10, 2002

8:00 – 9:00 AM Coffee and Registration

9:00 – 9:30 Welcome

9:30 – 9:45 Break

9:45 – 11:00 Stress Management Workshop and Paper PresentationLeonard and Higgins

11:00 – 11:15 Break

11:15 – 12:15 International Human Resources IDr. Vickers – Chair

Devinatz – A Response to British Journal of IndustrialRelations Symposium on the Human Rights Watch ReportBrakefield – Perceptions about Teamwork: An EmpiricalComparison of Japanese, Mexican, and American FacultyRausch – Career Planning

12:15 – 1:30 Lunch

1:40 – 3:00 International Human Relations IIDr. Reps – Chair

Knox – HRM in the Australian Luxury Hotel IndustryRadin – Global Employment PracticesParris – Work Teams: Perceptions

3:00 – 3:15 Break

3:15 – 4:15 StrategiesDr. Greene – Chair

Preziosi - The Role of Human Resources in Creating andSustaining a Competitive AdvantageLenaghan – Competitive Advantage Through HumanResources: Employer of Choice ProgramsPredmore – Managing Store Personnel to EffectivelyReduce the Wasted Resources

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4:15 – 4:30 Break

4:30 – 5:45 Roundtable – Leadership and Managing Training andDevelopment: Emerging IssuesDr. Keenan - Chair

6:00 – 7:00 Reception hosted by Manhattan College

Friday October 11, 2002

8:00 – 9:00 Coffee

9:00 – 10:30 Keynote PanelMichael Burton – New York City’s Response,Bill Bautz – NYSE response,John Miksad - Consolidated Edison’s Response

10:30 – 10:45 Break

10:45 – 12:00 Individuals, Illness & OrganizationDr. Preziosi – Chair

Vickers – Illness and OrganizationMello – Fanning the Flames of Controversy

12:00 – 1:30 Lunch

1:30 – 3:00 Accounting Ethics Panel

Mr. Ed Miller, Mr. Mike ReganGreene and Petrocine – Accounting Ethics Paper

3:00 – 3:15 Break

3:15 – 4:15 FinanceDr. FitzPatrick – Chair

Reps – Anomalies in the Pricing of InsuranceFor Long Term Care for the AgedTopyan - Equity Accelerator or Else?FitzPatrick - Ethics of Recent Corporate Governance Scandals

4:15 – 4:30 Break

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4:30 – 5:45 Business Education IssuesDr. Lev – Chair

Desplaces – What Information Technology Asks ofBusiness EducationGreene and Whelan – Infusion Plus!Walsh – Case Analysis Online – A Strategic ManagementCase Model

Optional Dinner Excursion: Peking Duck Banquet in Chinatown: See DickFitzPatrick for details.

Saturday October 12, 20028:00 – 9:00 Coffee

9:00 – 9:45 Transformation and EthicsDr. Keenan – ChairMorreale – Transformational Leadership in LawEnforcementPredmore – Religiousness and Perception of Ethics inOther Religious Denominations

9:45 – 10:00 Break

10:00 – 11:15 Business SituationsDr. Vickers – Chair

Vickers – Reconsidering Mental IllnessDesplaces – How to Recruit IT Managers

11:15 – 11:30 Break

11:30 – 12:45 EthicsDr. FitzPatrick – Chair

Rudin – Pay Equity and the 107th Congress: Sheep inWolves ClothingKondrasuk – Terrorism and Human Resource ManagementHoward – Effects of Diversity

Optional Afternoon excursion to Metropolitan Museum’s Cloisters in upperManhattan: See Dick FitzPatrick

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Perceptions about Teamwork: An Empirical Comparison ofJapanese, Mexican, and American Faculty

James T. Brakefield*Management Department, Western Illinois University

Kenji YoshidaHosei University, Faculty of Business Administration

Rodney M. Walter, Jr.Management Department, Western Illinois University

Abstract

Surveys were distributed to university faculty in Mexico, Japan, and the UnitedStates to compare their attitudes toward teamwork. Generally, all groups differedin their perceptions of what was important to effective teamwork. In particular, ifforced to allow for tradeoffs among personal satisfaction, good workrelationships, and high performance, each had different priorities. The Mexicanfaculty appeared to favor personal satisfaction and good work relationships. TheU.S. faculty appeared to favor high performance and personal satisfaction. TheJapanese faculty appeared to favor good work relationships and highperformance. These indications are generally consistent with perceptions aboutcultural differences between these countries, but must be regarded tentatively.Since the study is exploratory, the results suggest several hypotheses for furtherstudy rather than any conclusions as such. Answers to open-ended questions, incontrast to the scored items, revealed some commonly held perceptions amongrespondents, regardless of nationality. Directions for further research aresuggested.

Keywords: Teamwork, Faculty Perceptions, International Comparisons

Introduction

This paper is, in part, an extension of an earlier study by Brakefield and Walter (2002)examining attitudes of Mexican faculty toward teaching and teamwork. The previousstudy was initiated because, despite the current zeal over teamwork, there was nocomprehensive theory of teamwork or any known theoretical basis for believing thereshould be any consistent international differences in attitudes toward teamwork. Theobjective of that study was to open new lines of research rather than to substantiate pastresearch. In a way, it was designed to examine possible international differences onsomething important other than Hofstede’s dimensions of culture (Hofstede, 1980).

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The present study holds the same objective, but expands the scope of inquiry byincluding comparisons of additional data collected from a sample of U.S. faculty and asample of Japanese faculty. Yet, at the same time it narrows the focus to attitudes towardteamwork only, rather than to both teaching and teamwork. This study simply attemptsto examine whether perceptions might differ and, if so, in what areas the differencesmight be most pronounced. The potential utility of this approach lies in identifyingpossible areas to more rigorously pursue additional research. Since Brakefield andWalter (2002) addressed Mexican perspectives the following discussion focuses initiallyon Japanese perspectives.

Kashima and Callan (1994), provided a treatise on how work groups in Japan and theUnited States differ in accordance with cultural differences between Japan and the UnitedStates. In particular, they maintained that U.S. firms still hold with the machinemetaphor of organizations- in that U.S. firms view workers as one of various componentsof the production process. They maintained that Japanese firms hold with a familymetaphor of organizations- likening workers to members of a household. The emphasisJapanese firms place on harmony (Wa) among workers might generally lead us to expectthat Japanese faculty, as compared mainly to U.S. faculty, would respond more positivelyto items favoring work relationships. Our survey, however, focuses on the importance ofwork relationships in the context of the importance of performance and satisfaction aswell. What happens, for example, when something must “give,” when the organizationcannot manage to have all three (group harmony, personal satisfaction, and highperformance) at once?

Method

Surveys were administered to faculty at a mid-sized progressive university in centralMexico, a mid-sized teaching university in the Midwestern United States, and a mid-sized urban university in Japan. Items for the survey were originally drafted at theconclusion of a visit to Mexico by the first and third authors in June of 2000. They werebased, directly and indirectly, on various discussions, formal and informal, withadministrators, staff, faculty, and students at that university. The original survey had twoparts, a teaching portion and teamwork portion. Only the teamwork portion is included inthe present study (because the teaching portion was not administered in Japan). Toprepare the survey for administration in Mexico, the survey was first created in English,then translated into Spanish by a native Spanish speaker. Another individual, whosenative tongue is English, then back translated the survey into English for comparison withthe original version. Subtle changes in meaning were then addressed and minor changeswere made to the instrument. To prepare the survey for administration in Japan, thesurvey was translated into Japanese by the second author.

The teamwork section of the survey consisted of a main section, three subsections, and asection of open-ended questions. The main section and subsections all had Likert-styleresponse formats rated on a scale of one (strongly disagree) to seven (strongly agree).The main section had various single items to assess attitudes toward teamwork, including

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affectivity about teamwork and perceptions of the value of teamwork. Subsections eachaddressed some of these more specific issues about the role of teamwork. Eachsubsection had three items. The worker contributions subsection examined howrespondents perceive the role of the individual team member (Are skills important? Arerelationships important? Is the team an entity unto itself apart from its membership?).The work outcomes subsection looked at the perceived relationship between satisfactionand performance (Which is more important? Does satisfaction lead to performance?Does performance lead to satisfaction?). The work relationships subsection examinedmore closely the role of interpersonal dynamics among team members (Must everyoneget along with everyone else? Is it enough that most relationships are good? Dorelationships even matter?). A section of open-ended questions was included in thesurvey to serve several purposes. It allowed us to compare whether scored responseswere consistent with respondents’ own remarks. It helped determine how respondentsperceived the relevance (or lack thereof) of the items on the survey. It allowedrespondents to clarify or elaborate answers. And, it gave respondents the opportunity toshare insights about teamwork that may not have occurred to the researchers.

In Mexico, two faculty and several staff members hand-delivered approximately 100advance copies of the survey to faculty offices. We collected 48 surveys in person, and28 surveys via mail upon return. Response rate was thus approximately 75% of thosedistributed, but less than 30% of the total number of faculty. In the United States, agraduate assistant hand-delivered surveys to mail slots for all business and technologyfaculty. Of 130 surveys distributed, 33 were returned, for a response rate of just over25%. In Japan, surveys were hand-delivered by the second author to available full-timebusiness faculty. Of 38 surveys distributed, 20 were returned. Response rate was thusslightly over 50% of those distributed, but only slightly more than 30% of the totalnumber of business faculty.

In keeping with the exploratory nature of the study, data analyses were appropriately keptsimple. Each item from the survey was treated as a separate dependent variable. Countryof origin (Mexico, United States, and Japan) was the sole independent variable. Datawere analyzed using one-way analysis of variance (ANOVA).

Results

ANOVA results are summarized in Table I. [More complete results are available onrequest from the first author.] Eight out of seventeen items revealed statisticallysignificant differences (p<.05), and are reported in the table.

The pattern of results reveals different priorities among the Mexican, Japanese, andAmerican faculty. The Japanese faculty had the highest mean score on three of the eightitems on which there were statistically significant (p<.05) differences between groups.More so than for the U.S. or Mexican faculty, the Japanese faculty felt that diversity ofskills can compensate for individual weaknesses, that team members will not help eachother unless they trust each other, and that for good teamwork the most important factor

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is to have good relationships among team members. On one statistically significant item,the Japanese faculty had the lowest mean score. They were less likely to agree (in fact,tended to disagree) that for good teamwork the team itself is more important thanindividual members and the relationships among them. The Mexican faculty had thehighest mean score on five of the eight statistically significant items. They more stronglyagreed that they preferred to work in teams even when capable of doing the work alone,that for good teamwork the team itself is more important than the individual members,that morale is more important that performance, that morale is necessary for goodperformance, and that for effective teamwork everyone on the team must get along wellwith everyone else on the team.

Discussion

In keeping with the exploratory nature of this study, the following discussion must beregarded as essentially speculative. None of the results obtained in the study anddiscussed herein should be regarded as conclusions, per se. Instead, the appropriate wayto view the findings is as possible indications of directions for further investigation.Taken in this way, the results may have some intriguing implications.

Although it is safe to state that Mexicans, Americans, and Japanese have differingcultural values, it is rather precarious to try to define what the specific differences are.Nonetheless, given that our convenience sample is very limited and our focus onteamwork is narrow, it appears that our results are consistent with some commonperceptions. To knowingly oversimplify: Mexicans value compassion, Americans valueachievement, and Japanese value harmony. All would surely like to say that, inteamwork, performance is important, personal satisfaction is important, and good workrelationships are important. The present study, however, recognizes that it is often futileto try to maximize all three. Tradeoffs inevitably arise, and sometimes something has gotto give. Based on our results, we suggest the following indications for further researchon teamwork:

• Mexican workers favor personal satisfaction and good work relationships, even ifit puts an upper limit on performance.

• American workers favor personal satisfaction and high performance, even if itmeans some strain on work relationships.

• Japanese workers favor high performance and good work relationships, even atthe expense of personal satisfaction.

Although this study focused on differences between the Mexican, U.S., andJapanese faculty, it is important to note similarities as well. These similarities aremost strikingly revealed in responses to the open-ended questions. All threegroups tended to say that they liked to work with others who are competent anddependable, that the role of leadership is to provide the team with direction, thatthe benefits of teamwork include synergy and cooperation, that the disadvantagesinclude the potential for social loafing and free-riding, and that the survey itself

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did not allow for enough contingency variables (!). Partly, the commonalitiesmay arise from similarities, albeit across countries, in the respective samples. Allthe principal investigators, and closest associates, are affiliated with colleges ofbusiness, and business faculty are clearly over-represented in the sample. At leastsome responses from each group revealed familiarity with research literature onteamwork or leadership.

Additional research should be conducted that samples a better cross-section offaculty from the respective countries discussed here, that samples a broader cross-section of other countries (e.g., see Brodbeck, Frese, and Javidan, 2002), thatsamples a broader cross-section of occupation groups, and that uses apsychometrically better survey designed to test specific hypotheses suggested bythe preliminary results presented here.

References

Brakefield, J.T., and Walter, R.M. (2002) Pedagogical attitudes in higher education froma developing economy: A study of perceptions of Mexican faculty. Proceedingsof the 31st Annual Meeting of the Western Decision Sciences Institute AnnualConference. pp. 370-372.

Brodbeck, F., Frese, M., Javidan, M. (2002) Leadership made in Germany: Low oncompassion, high on performance. Academy of Management Executive. Vol. 16,No. 1, pp. 16-30.

Hofstede, G. (1980) Culture’s Consequences: International Differences in Work-RelatedValues. Beverly Hills, CA: Sage.

Kashima, Y., and Callan, V.J. (1994) The Japanese work group. In H.C. Triandis, M.D.Dunnette, and L.M. Hough (Eds.), Handbook of Industrial and OrganizationalPsychology, (2nd ed.), Vol. 4. pp. 609-646. Palo Alto, CA: ConsultingPsychologists Press.

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Table I

Cross-Cultural Differences in University Faculty Perceptions of Teamwork

1 = Strongly Disagree and 7 = Strongly Agree

Item Description Respondents’Location

MeanScore

F-Statistic Sig.Level

Japan 3.10Mexico 4.72

I prefer to work in teams even ifI am capable of doing the wholejob alone. United States 3.73

9.894 .000


Putting people with diverse skillstogether on a team willcompensate for any individualweaknesses.

United States 4.5813.994 .000


Team members will not helpeach other unless they trust eachother. United States 4.91

3.374 .037


For good teamwork, the mostimportant factor is to have goodrelationships among teammembers.



For good teamwork, the teamitself is more important thanindividual members and therelationships among them.



With teamwork, team morale(spirit) is more important thanteam performance. United States 3.00

16.165 .000


With teamwork, good morale(spirit) is necessary for goodteam performance. United States 5.13

11.070 .000


For effective teamwork,everyone on the team must getalong well with everyone else onthe team.


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How to Recruit IT Workers: Reviewing Current Practices in Rhode Island

David E. Desplaces *College of Business Administration, University of Rhode Island

Laura BeauvaisCollege of Business Administration, University of Rhode Island

Abstract

This paper reports on the findings from a study conducted on the InformationTechnology (IT) sector in the State of Rhode Island. The study examined on onehand, the needs of the industry for qualified IT professionals, and on the other, theavailable skills sets of IT professionals. It also explored recruiting practices in theindustry, from which suggestions on how businesses can access qualifiedprofessionals are proposed.

Keywords: IT Professional, recruiting methods, skilled candidates, New England, RhodeIsland

Note: The author would like to thank the Rhode Island Technology Council and theRhode Island Economic Development Corporation for making the data available for thisresearch.

Introduction

Information Technology (IT) is a fast growing business sector in the State of RhodeIsland and its health is considered a leading regional economic indicator (BankBoston,1997; Desplaces & Comerford, 2002; DeVol, 1999). In recent years, demand growth inthe field has created the challenges of managing and meeting the current and future needsof this vibrant industry. These needs include training, employee retention, and workeravailability (Buckley et al., 2000; "Understanding the IT workforce," 2001), but equallyimportant are recruiting practices used by both companies and potential IT professionalworkers.

This research seeks to provide insights on what human resource managers should do togain access to qualified and skilled IT professionals using the case of Rhode Island. Itcapitalizes on the research directed by the Rhode Island Technology Council (RITEC), incooperation with the Rhode Island Economic Policy Council, the Rhode Island EconomicDevelopment Corporation and the Greater Providence Chamber of Commerce, whichsought input on IT work force issues from company executives as well as individualprofessionals. This research reviews the skilled work force needs of the industry, thencompares them to what skills are readily available in the labor market. It assesses which

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recruiting practices are drawn upon most frequently, and offers suggestions to businesseson how to access qualified candidates.

Review of the Current Research

A clear understanding of how companies recruit, select, train and retain qualifiedcandidates is paramount to all companies regardless of size. It has been argued that smalland medium size companies, which have an important role in the economy, are likely theones to be sensitive to external and local labor markets (Vinten, 1998). This entailsknowing the skill sets that are readily available in the market place, and zeroing in on therecruiting methods that prove to be efficient at attracting and screening qualifiedcandidates. The current economic slowdown only accentuates already reported extensivecosts associated with recruitment activity, both in resource allocation as well as inpotential costs associated with making a wrong assessment (Wiley, 1992).

Skills sets are at the forefront of managers’ concerns when recruiting professionals, asthey strive to contain new employee training costs. Some of the skills sets of IT workersare developed by being exposed to the field. Others, especially new entrants to theprofession, have been trained through post-secondary institutions of learning. However,managers repeatedly complain about the inadequacy of formal education (Hahs, 1999),and consequently report a low supply of experienced professionals. Some of thesecomplaints may be explained by inadequate curricula (Burn & Ma, 1997; Desplaces,Peckham, & Beauvais, 2002), but also by a lack of educator understanding of the needsof the IT professional and those of his/her future employer ("Understanding the ITworkforce," 2001). Consequently, employers have been seeking candidates that areexperienced (Desplaces & Comerford, 2002), creating a shortage in this segment ofworkers and an abundance of recent college graduates deemed not qualified. Althoughimportant, debating the needs for curriculum reform is beyond the scope of this paper.However, it is important to note the rise in coordinated effort leading businesses intopartnerships with higher education institutions to meet their future work force needs(Burn & Ma, 1997; Kesner, 2002). At this point, one needs to ask if there really is a gapin the skill sets of IT professionals compared to what employers need. Therefore, thefirst question that this paper attempts to answer is if there is a gap in what executives ofIT companies perceive IT professionals need in terms of skills sets and in what ITprofessionals themselves report that they possess and need in terms of skills forsuccessful performance of their jobs.

Wiley’s (1992) review of the literature on recruiting methods revealed that selectedmethods seem to have powerful effects on the performance of employees. Her studyconfirmed that certain recruiting methods were related to the performance of newemployees. She found a comparable advantage in using particular types of recruitingmethods, by demonstrating that particular methods significantly yield high performingemployees. Employee referral and former employees yield the best performers.Newspaper ads, employment agencies, walk-ins, and friends and family yield some of thepoorest performers. Although an increasingly larger number of individuals have access to

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it, the Internet remains a supplement to traditional recruiting methods (Zall, 2000),because it is limited to individuals who are on-line, which does not provide access to thetotal available work force. Also, the cost implication (one to nine cost ratio in favor of theinternet job advertisement versus regular job advertisement)(Zall, 2000) appeals tocorporate America more and more. A second research question that this study attemptsto answer is if executives tap into the same resources to access talent that potentialcandidates use to access jobs.

Survey Methodology

Two surveys were conducted in the Ocean State by the Rhode Island Technology Council(RITEC) to identify the potential gaps and opportunities in IT work force issues. In thefirst one, IT sector company executives were asked questions relating to their businessactivities and workforce needs, resulting in 319 usable responses (or eleven percent ofvalid initial contacts) (Desplaces & Comerford, 2002). In the second survey, anonymousIT professionals were asked to complete a web-based questionnaire to assess their skills,certifications, levels of education, compensation levels, preferred recruitment methods,along with demographic information. This effort resulted in 192 usable responses. Thissample shared many characteristics with the population of professionals in the field of IT,which supports the generalizability of our findings (Desplaces et al., 2002). Theresponding IT professionals were categorized into job function using InformationTechnology Association of America (ITAA) definitions.

Results

In an effort to assess the skills that are scarce within the IT job applicant pool in RhodeIsland, company executives were asked to select three skill areas deemed to be “…inshort supply.” The options included both technical (i.e., programming/software engineer,technical support, network design and administration, enterprise systems analysis andintegration, web development and administration, digital media, and technical writing)and non-technical skills (i.e., project management, critical thinking, business/strategicplanning, communication/interpersonal, marketing, web development and administration,management, and negotiating). Programming / software engineering skills werementioned most frequently (50 percent), followed by project management (29 percent)and critical thinking skills (29 percent). Figure 1 summarizes the data. It appears thatprogramming/software engineering reflects the current market demand, while the lattertwo highlight the importance that project management and critical thinking have in thecareer of an IT professional.

IT professionals were also asked to report on both the technical and non-technical skillsthat they currently possess and need to perform in their current jobs. Table 1 summarizesthe skills sets reported by respondents. The study revealed that only 69 out of the 194respondents (36 percent) reported having project management skills. The data alsoindicate that professionals who are in the 30 to 40 age range are twice as likely to haveproject management skills than professionals who are in the 20-29 age range. Other

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skills reported were not necessarily comparable to the ones in the executive survey.However, skills categorized as programming in nature appear to exist within the sampleof professionals, since they are embedded in specialized skills such as web developmentand database development. However, only 23 percent of IT professionals indicatedhaving software application skills, which are specific to software engineering, one out oftwo of which were programmer and software engineers themselves.

Executives were asked what their recruitment method preferences were. Referral byemployees was cited most often (25 percent), followed by the Internet (23 percent) andthe newspaper (20 percent). Career planning and placement offices of academicinstitutions were the fourth most popular choice (12 percent). Other methods were jobfairs (nine percent), employment agencies (eight percent) and, virtual fairs (four percent).

Asked what was the most efficient way of hiring them for their current jobs, individual ITprofessionals overwhelmingly indicated that networking was the most efficient way ofhiring them (51 percent). This was followed by the Internet (28 %), newspaper (16 %),and through the use of internships (five percent). Other methods such as careerplacement offices, career events, employment agencies, employee referrals and virtualfairs, even though offered as options, were not reported by respondents to be efficientways of hiring them.

Discussion

The first purpose of the present study was to determine if there was a gap between theskills sets deemed necessary in the IT industry as perceived by executives in IT firms andthose possessed by IT professional workers. The findings reveal that technical skills areavailable among IT workers; however, they do not necessarily reflect the current needs ofthe firms seeking candidates according to the executive managers of IT firms. Thisappears most true of developing or so-called “hot” skills, which reflect new technologies,such as xml or .NET. These skills are hard to assess and more importantly hard toforecast. On the other hand, project management and critical thinking skills seem to belacking in IT professionals and are ones that executives believe are necessary forsuccessful job performance in the field. Perhaps these skills should be more emphasizedand fully integrated into post-secondary curriculum. Results show that proportionally,project management skills are lacking in individuals that could be categorized as lessexperienced (20-29 years old). Integrating these principles in higher education curriculumwill assure that candidates are more adequately prepared to meet the challenges in themarket place.

Our second research question focused on determining if IT executives and professionalsshowed different preferences for recruiting. Findings indicate a gap between ITprofessionals’ perceived ways of acquiring jobs and the most often cited methods ofrecruitment used by executives. While IT professionals report networking as the mostefficient way of getting a job, employee referral is the most preferred method of hiring anew employee according to executives. The executives’ preferred method of employee

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referral appears linked to Wiley’s (1992) research findings that indicate that employeereferred candidates are better performers. However, IT professionals seemingly seenetworking linked to successfully gaining access to the job. Therefore, the most efficientway of getting a candidate (networking according to IT professionals) may not yield thebest performers. It could be argued that networking could also infer employee referral;however, employee referral was clearly differentiated from networking on thequestionnaire and would lead us to believe otherwise. It seems that executives raisequestions of inadequacy of workers, but in turn, they might not be efficient in their searchof qualified candidates. What is efficient for the candidates looking for a job may not beeffective for the company. They have two different perspectives—executives are lookingfor a method of recruiting that yields successful performers, while IT workers are lookingfor easy and fast methods of getting a job. Somehow, effective recruiting methods in thisfield will have to find a way to combine both of these criteria.

The Internet remains a highly sought source of information for both executives andprofessionals, although more so for professionals then company executives. However, itshould be noted that it is only used as a supplemental form of recruitment due to itsselective nature, even though search engines have been perfected, and more and morepeople have access to the Internet. Also noteworthy is the interest in virtual fairs byexecutives, but this enthusiasm has not yet been matched by professionals.

Companies and higher education institutions must engage in a partnership that will assurea trained work force. Thus, by utilizing partnerships to discover needed future skills (i.e.,“hot” skills), and by extending its networking capability, executives may sustain access toqualified labor force.

References

BankBoston. (1997). MIT: the impact of innovation. Boston: BankBoston.Buckley, P., Montes, S., Henry, d., Dalton, D., Gill, G., Dumagan, J., LaPorte, S., Cooke,

S., Pastore, D., & Price, L. (2000). Digital economy 2000. Washington, D.C: US.Department of Commerce.

Burn, J. M., & Ma, L. C. K. (1997). Innovation in IT education: practicing what wepreach. Information Resources Management Journal, 10(4), 16-25.

Desplaces, D. E., & Comerford, R. M. (2002). The state of information technology inRhode Island: report and data summary. Providence, RI: RITEC.

Desplaces, D. E., Peckham, J. M., & Beauvais, L. L. (2002, Oct. 10-12). Whatinformation technology asks of business higher educations institutions: the case ofRhode Island. Paper presented at the Association on Employment Practices andPrinciples, New York City.

DeVol, R. C. (1999). America's high-tech economy. Santa Monica, CA: Milken Institute.Hahs, D. (1999). What have MBAs done for us lately? Journal of Education for Business,

74(4), 197-288.Kesner, I. F. (2002). Partner with academia to build your firm. Consulting to

Management, 13(1), 15-20.

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Understanding the IT workforce. (2001). In C. S. a. T. Board (Ed.), Building a workforcefor the Information Economy (pp. 44-51). Washington, D.C.: National AcademyPress.

Vinten, G. (1998). Skills shortage and recruitment in the SME sector. CareerDevelopment International, 3(6), 238-242.

Wiley, C. (1992). Recruitment research revisited: effective recruiting methods accordingto employment outcomes. Journal of Applied Business Research, 8(2), 74.

Zall, M. (2000). Internet recruiting. Strategic Finance, 68-72.

FIGURE 1Skills in Short Supply as Reported by Executives

3%

6%

6%

9%

12%

19%

19%

20%

20%

20%

21%

23%

29%

29%

50%

0 1/10 1/5 3/10 2/5 1/2 3/5

Negotiating

Technical Writing

Digital Media

Management

Web Development andAdministration

Marketing

Enterprise Systems Analysisand Integration

Database Development andAdministration

Network Design andAdministration

Technical Support

Communications/Interpersonnal

Business/Strategic Planning

Critical Thinking

Project Management

Programming or SoftwareEngineering

IT S

kills

NUMBER OF RESPONDENTS

Source: State of IT in Rhode Island, RITEC 2002

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TABLE 1IT Professional Skill Sets Summary as Reported by IT Professionals

Skill Sets Percentage who Possess The Skill SetTechnical Support Skills 61%Systems Analysis Skills 60%Networking Skills 58%Internet/E-Commerce Development Skills 55%Database Administration/Architecture Skills 38%Project Management Skills 36%Software Applications Development Skills 23%

Source: IT Professional Survey Result (Not Published)

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A Response to the British Journal of Industrial Relations Symposium on The HumanRights Watch Report: A Minimum Program For Promoting Collective Bargaining

Rights as a Human Right

Victor G. DevinatzDepartment of Management and Quantitative Methods, Illinois State University

Abstract

The publication of Unfair Advantage, a report published by Human Rights Watch(HRW), documents and analyzes how employers routinely violate internationalhuman rights standards by depriving U.S. workers of their legal right to organize.In a recent symposium on Unfair Advantage published in the British Journal ofIndustrial Relations, seven essays analyzed the strengths and weaknesses of theHRW report from a variety of ideological and theoretical perspectives. Althoughthe scholars who wrote these essays raised a number of important issuesconcerning Unfair Advantage, they failed to provide any concrete or practicalmethodologies for using this report to promote the collective bargaining rights ofU.S. workers. Thus, the purpose of this paper is to critique these symposiumpapers as well as to propose a minimum program, based on Unfair Advantage, foradvancing the collective bargaining rights of U.S. workers.

Keywords: Union Organizing, Collective Bargaining, Human Rights

The publication of Unfair Advantage: Workers’ Freedom of Association in the UnitedStates under International Human Rights Standards by Lance Compa of CornellUniversity and Human Rights Watch (HRW) has done an excellent job in documentingand analyzing the failure of U.S. labor legislation in protecting the fundamental right (asguaranteed by the 1935 National Labor Relations Act) of U.S. workers to organize. Notonly does Compa persuasively demonstrate that the playing field is far from level duringunion organizing campaigns, but he shows that the playing field is so tilted in favor ofemployers that international human rights standards are routinely and callously violatedby employers during organizing drives among U.S. workers in a wide array of industries.By framing the workers’ right to engage in collective bargaining as a fundamental humanright, the report elevates the discussion of union organizing from one of being merely an“economic” competition between unions and employers at the work site to the realm ofmoral rights that workers possess because they are human and “are entitled to dignity aspersons” (Wheeler, 2001, p. 592).

In Volume 39, Number 4 (December 2001) and Volume 40, Number 1 (March 2002), theBritish Journal of Industrial Relations published seven essays (including one in responsefrom the HRW report author Lance Compa) in a symposium analyzing the strengths andweaknesses of Unfair Advantage from a variety of ideological and theoreticalperspectives. Although three U.S. industrial relations scholars and three industrialrelations scholars from outside the United States raised a number of important issues

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concerning the HRW Report, these scholars failed to provide any concrete or practicalmethodologies for using this report to promote the collective bargaining rights of U.S.workers. Thus, the purpose of this paper is to critique these symposium papers as well asto propose a minimum program, based on the information contained in Unfair Advantage,for advancing collective bargaining rights of U.S. workers.

Although Wheeler (2001, p. 591) believes that the report’s human rights orientation is its“most important contribution to the understanding and evaluation of American labourpolicy,” his major criticism revolves around the report’s recommendation for “morespeech for both the employer and the workers” (p. 594). Wheeler (2001, p. 594) arguesthat because employees are subordinate to managers, anything that managers say withrespect to unionization during an organizing drive may be viewed as coercive byemployees. Therefore, according to Wheeler (2001, p. 594), managers’ speech regardingunionization “should be construed extremely narrowly in order to avoid infringing uponthe workers’ rights to....collective bargaining.”

Compa is not unsympathetic to Wheeler’s (2001) concern. In his response published inthe symposium, Compa (2002, p. 115) acknowledges the employers’ advantage in thisarea and argues that the “report really does recommend less speech for employers”through “closer scrutiny and tougher remedies” and the implementation of more Gisselbargaining orders when deemed appropriate. However, Compa argues that the report didnot call for the total curtailment of employer speech during organizing campaignsbecause, according to HRW, employers are humans, too, and it viewed this “as tooinjurious to free speech principles that are essential for human rights.”

Although Getman (2001, p. 596) states that Unfair Advantage “is a powerful indictmentof the way in which U.S. labour law deals with basic rights of workers,” he criticizes thereport’s recommendations as being unrealistic because none of them would have a chanceof being implemented by the U.S. Congress or the National Labor Relations Board(NLRB) at this time, a point with which Compa (2002) concurs. Getman (2001, p. 599)argues that the key to enacting such recommendations on U.S. labor policy depends on adramatic shift in public opinion. However, he offers no proposals on how to affect thischange among the U.S. public at large.

The strongest criticism comes from Brody (2001) who argues that the HRW reportultimately accepts the State-administered union certification process, with a few minorrevisions, rather than a process based on the direct action of workers. Compa (2002) doesnot dispute Brody’s (2001) major point that worker self-organization is the foundation ofa viable and effective unionism regardless of how representation occurs. Nevertheless, asCompa (2002, p. 119) claims, the State is “always going to be involved” in the unioncertification process.

Adams (2002) argues that the current system of U.S. labor law, which he refers to as theWagner-Act Model (WAM), is beyond repair and cannot be reconfigured to act in theworkers’ interests even if all of the recommendations of the HRW report were

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implemented in totality. As evidence for his position, Adams (2002) points out thatvirtually all of the HRW report’s recommendations are in effect in Canada - card checkcertification, first contract arbitration, and employers being prevented from usingpermanent replacement workers during strikes - although 80 percent of Canadian workersin the private sector still lack workplace representation.

Leader (2002) sees a major problem of the HRW report being its commitment toretaining the “bargaining unit” as the foundation of the U.S. labor relations system basedon obtaining majority support from employees in a workplace. He argues, for example,that while the bargaining unit protects full-time employees, contingent employees whomight perform substantially the same work side-by-side the full-time employees areexcluded from bargaining unit membership and subsequently, collective bargainingrepresentation. However, even if the bargaining unit was expanded to include suchcontingent employees, as advocated by Compa in Unfair Advantage, Leader (2002)argues that these employees might not be best represented by a union in a bargaining unitdominated with full-time employees. Thus, Leader (2002) states that exclusiverepresentation should not be the basis of the U.S. labor relations system and that“minority unions” should be allowed to bargain for their members along side majorityunions in the workplace.

In a vein similar to Leader (2002), Ewing (2002, p. 144) criticizes Unfair Advantage onthe grounds that even if all of Compa’s reforms were implemented, problems still remainbecause the U.S. industrial relations system “is based on the principle of majority supportin single establishments.” Ewing (2002) states that such reforms do not go far enough inprotecting the human rights of workers, as outlined by the International LaborOrganization (ILO). According to the ILO, employees who desire collective bargainingrepresentation, even if they do not constitute an absolute majority of employees in theworkplace, still should have the right to be represented by a minority union, which at aminimum, is able to negotiate a collective bargaining agreement on these employees’behalf.

These six industrial relations scholars make valid points about both the serious structuralinadequacies of U.S. labor law in protecting workers’ rights in the unionization processand the weaknesses of the recommendations outlined in Unfair Advantage of ultimatelyremedying the defective nature of the WAM. However, these industrial relations scholarsare analyzing the HRW report from the viewpoint of developing a “maximum program”to address the “toxic” deficiencies of U.S. labor law.

While working towards achieving the maximum program is not on the agenda for theforeseeable future, this does not mean that a minimum program cannot be developed totry to improve the environment of workers interested in organizing unions at this time.Such a program must recognize the current political realities, the present strength of theU.S. trade union movement as well as the constraints and limitations of the U.S. legalsystem. Certainly, any minimum program can be used as a springboard in workingtowards the attainment of a maximum program at a more opportune time.

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Because “a new burst of rank-and-file-led activism” (Getman, 2001, p. 599) to reviveU.S. trade unionism does not appear to be imminent, Getman’s (2001, p. 599) proposal ofworking to change public opinion merits significant attention and consideration. Thequestion boils down to this: Is there a minimum program, contained within the richmaterial of Unfair Advantage that can be developed for effecting a positive change?

I believe that there is. I feel that the “collective bargaining rights as human rights”argument is too abstract and amorphous to rally support among the U.S. population as awhole who might be more likely to view human rights abuses as necessarily constitutingthe acts of murder, rape, imprisonment and/or torture. However, a related and moreconcrete argument, based on Unfair Advantage, can be utilized to sway public opiniontowards supporting the reforms outlined in the HRW report.

Analyzed in Unfair Advantage are numerous case studies of union organizing attemptsfrom a wide variety of industries and among different types of workers throughout thedifferent regions in the United States. Discussed in the report are unionization drivesamong migrant agricultural workers and contingent workers as well as workers employedin South Florida nursing homes, San Francisco hotels, North Carolina food processingplants, a Detroit snack food factory, and in a variety of manufacturing industries.

There is a common thread that runs through the vast majority of case studies presented inthe report. In 15 of the 18, or approximately 83 percent of the, organizing drivespresented in the HRW report, at a minimum, there are a significant number of immigrantsand/or racial minorities employed in the firm/industry in which the organizing driveoccurred. And immigrants and racial minorities dominate the work forces of many ofthese 15 employers/industries ranging from the majority of Haitian immigrant womenworking in the five South Florida nursing homes to the majority of Mexican immigrantsemployed at Acme Die Casting, an aluminum and zinc castings factory in suburbanChicago, to the vast majority of African-Americans working at Cabana Potato Chips, aDetroit food processing plant. Because of the large number of immigrants and racialminorities currently involved in union organizing drives (Greenhouse, 2000), in order togain support from the U.S. public for collective bargaining rights instead of focusingmore broadly and amorphously on a human rights approach, there should be an emphasison promoting racial justice for workers active during unionization campaigns.

The argument can be framed in the following manner. Since immigrant and racialminority workers generally occupy jobs that are subjected to lower wages and harsherworking conditions, one would expect to see the initiation of relatively more unionizationattempts at these work sites. However, employers committing flagrant unfair laborpractices to prevent unionization among these employees can be presented by the unionsas the employer having a conscious policy of violating basic fairness and leading todisparate racial impact in the workplace.

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In order for the unions to gain support for a program of attaining collective bargainingrights based on the promotion of racial justice, I believe that there are two movementscentered on labor issues that directly intersect with such an approach – the student anti-sweatshop movement and the living wage campaign movement. Both of thesemovements have experienced at least a moderate amount of success, have obtained publicsupport in working towards their goals and can help to publicize employer violations thatroutinely occur during union organizing drives.

Anti-sweatshop protests have rocked more than 100 campuses throughout the nationsince 1997. Sit-ins at major universities including the University of North Carolina,Duke, University of Michigan, and the University of Wisconsin have led toadministrations adopting tougher regulations for apparel manufacturers (Zahra, 1999). Inaddition, the movement has coalesced and become centralized at the national level. InJuly 1998, students from 20 campus anti-sweatshop groups throughout the United Statesgathered in New York City and formed the United Students Against Sweatshops (USAS).Currently, USAS has chapters at over 100 colleges and universities and a similarumbrella group was formed by Canadian students (Co-op America’s Sweatshops.org,2002).

Living wage campaigns, based on the belief that “anyone in this country who works for aliving should not have to raise a family in poverty,” (Pollin and Luce, 1998, p. 1) havesprouted in both communities and campuses throughout the nation. The movement’s firstvictory occurred in 1994 with the passage of a citywide living wage ordinance inBaltimore. By the end of 1997, living wage laws were enacted in 12 additional cities,including New York, Los Angeles, Boston, Milwaukee and Minneapolis (Pollin andLuce, 1998, p. 3).

On campus, the most prominent living wage campaign is being conducted by the HarvardUniversity Progressive Student Labor Movement (PSLM) where the group has beenorganizing since Fall 1998 for a living wage for over 1000 Harvard employees. Thegroup has been successful in pressuring Harvard to raise the wages of Harvard’s lowestpaid employees to between $10.83 and $11.30 per hour at the end of January 2002(Ferdinand, 2002).

Living wage movement activists have acknowledged that “it still would be essential thatthe recent positive developments in the union movement begin to bear fruit- in particularthrough increases in the proportion of workers joining unions-if workers are going toreceive their fair share of the growing economy” (Pollin and Luce, 1998, p. 189). Withthis type of attitude and the demographic composition (immigrants, people of color, etc.)of the living wage campaign constituencies, it should not be difficult to convince theliving wage movement to actively publicize the fight to obtain racial justice in unionorganizing drives. Similarly, anti-sweatshop campaign activists can be enlisted in thesame manner because of the intimate connection between their work in eliminatingsweatshop conditions abroad with the goal of achieving racial justice in unionizationcampaigns here at home.

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The minimum program outlined in Unfair Advantage is, by no means, the perfect vehiclefor returning to the union organizing success experienced in the decade between thepassage of the Wagner Act and the implementation of the Taft-Hartley Act. Theindustrial relations scholars who have participated in this symposium have perceptivelyinterpreted and commented on the limitations of the HRW report in leading to the revivalof the U.S. trade union movement; the point, however, is to use Unfair Advantage to theunions’ advantage. By framing violations of U.S. workers’ freedom of association asviolations of human rights, the HRW report has taken a major and historic step inreconceptualizing the union organizing process in the United States. Implementing thereport’s recommendations would be a real and significant gain for U.S. workers andshould be recognized as such.

ReferencesAdams, R. J. (2002). The Wagner-Act model: A toxic system beyond repair. BritishJournal of Industrial Relations, 40: 1, 122-127.Brody, D. (2001). Labour rights as human rights: A reality check. British Journal ofIndustrial Relations, 39: 4, 601-605.Compa, L. (2002). Author’s reply to Wheeler-Getman-Brody papers. British Journal ofIndustrial Relations, 40: 1, 114-121.Co-op America’s Sweatshops.org. Major sweatshop victories. Retrieved February 6,2002, from http://coopamerica.orgEwing, K.D. (2002). Human rights and industrial relations: Possibilities and pitfalls.British Journal of Industrial Relations, 40: 1, 138-149.Ferdinand, P. (2002, February 1). Harvard agrees to raise wages of lowest paid:President’s move is aimed at solving high-profile issue. The Washington Post. RetrievedFebruary 6, 2002, from http://www.hcs.harvard.eduGetman, J. (2001). A useful step. British Journal of Industrial Relations, 39: 4, 596-600.

Greenhouse, S. (2000). Labor urges amnesty for illegal immigrants. The New York Times,17 February, A26.Leader, S. (2002). Choosing an interpretation of the right to freedom of association.British Journal of Industrial Relations, 40:1, 128-137.Pollin, R. & Luce, S. (1998). The Living Wage: Building a Fair Economy. New York:The New Press. Wheeler, H.N. (2001). The Human Rights Watch Report from a human rightsperspective. British Journal of Industrial Relations, 39: 4, 591-595.Zahra, Tara. (1999, August 6). Sweating the big stuff. Retrieved February 6, 2002, fromhttp://www.salon.com

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Career Planning/Management - Renewal of a Traditional Approach(A Course with Heavy Reliance on the Internet)

*Erwin RauschDidactic Systems, Inc. and Kean University

Robert WitheridgeKean University Union

Abstract

This paper describes a non-traditional Career Management class that covers careerplanning from the competencies needed to find the first position, to enjoyment ofa financially secure, gratifying retirement. Instead of a textbook, the syllabuscalls for development of a workbook that gradually fills with student researchassignments on all the relevant topics.

The approach has been used successfully in live classes but is especiallyappealing for distance education where research reports can be distributed in e-mail messages. It satisfies the needs of the entire spectrum of students, fromthose who are searching for the first positions to those whose focus is on careeradvancement or on preparation for unexpected career disruption. All gain greaterappreciation of the need for effective financial planning and for giving realisticthought to what they may have to do so their standard of living during retirementwill be as high as they hope and, more importantly, that they are prepared to enjoyrewarding ways to occupy their time.

Keywords: Non-Traditional, Career Management Course, Distance Education.

Introduction

This paper describes a non-traditional course in Career Management which does not use apublished textbook. Instead a brief workbook with outlines of the topics is augmentedwith student research assignments. The approach has been used successfully in liveclasses but is especially appealing for distance education where research reports can bedistributed in e-mail messages.

One might ask whether there is a need for improvement in a course in career managementwhen possibly higher education is not an appropriate place for a course on this subject.The reasons are addressed, in part, in the last section of this paper – the literature review.It should also be noted that such courses are indeed being offered and, if they can bringgreater benefits to students, then the changes suggested here may deserve criticalconsideration. Furthermore, the authors believe that learners are too immature inundergraduate education for this topic. When covered as comprehensively as outlined inthis paper, then maybe there is justification for such a course in higher education. Where

34

else could learners be exposed to the topics and receive some guidance on the habits andskills to develop?

Background

Most higher education courses in career management or career planning concentrate onwhat has traditionally been considered a 'Career' (satisfying activity from the firstposition to retirement). As reflected in textbooks and learning support materials,emphasis has been on the objective of preparing learners for planning and implementingthe search for a suitable position, coping with career disruption, working towardemployment advancement (professional/vocational development), and planning careermoves to satisfy established or changing personal interests and values.

These learning objectives have led to coverage of various dimensions of student self-assessment, bringing awareness of useful data about jobs and economic conditions,preparation for effective networking, skill enhancement for written communications withprospective employers, including preparation of letters and resumes, handling ofinterviews, and behaviors for success at work

In the last few years, textbook definitions of career management have expanded toinclude financial and retirement planning, and even considerations for establishing orjoining a business enterprise (i.e. Breidenbach, 2001).

At the same time, technology has brought the addition of information about electronicresources. It has also led to interactive CD-ROM and internet-based learning materialsand assignments which augment the traditional textbooks that continue to serve asprimary foundations for teaching/learning.

Career management, especially in today’s environment, should be a lifelongresponsibility if the most satisfying career is to be achieved. Such a career will not beseriously disturbed by involuntary changes in positions, and voluntary changes in careerdirection bring the hoped-for results. It will continue to enhance knowledge and skillfoundation for favorable events such as promotions and career-enhancing,developmental, work assignments. As mentioned elsewhere in this paper, a satisfyingcareer also requires ongoing financial planning and, possibly most importantly,systematic planning so that the years when it is time to 'retire' - whatever that may mean -will also be satisfying. Planning and life-style management to maintain a sound healthprofile should also be considered.

The learning, and habit-forming needs of such ongoing career management are notcovered adequately in any of the current texts that were inspected. Furthermore, the textsthat were reviewed touch only tangentially on the skills that are needed for actuallyimplementing the plans. In fact most educational programs do not expose learners to thecritical communications, conflict management, learning, and decision-making, skills.

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The comprehensive approach described in this paper attempts to provide the conceptualfoundation, and a resource base for lifelong career planning and competencyenhancement.

Imperatives for Career Management Courses

It is useful to consider the wide spectrum of needs which learners may or do face, even inundergraduate courses, based on their personal situation and learning goals.

1. Full-time students enrolled in a day-time degree program will probably take thecourse in the junior or senior year. Their most likely interest is on all aspects ofthe traditional course with the possible exception of self-assessment, and withemphasis on finding an entry-level position with satisfying career promise.

2. Students in evening programs are far more diverse in age, and in educational andvocational background. Most are employed and have experiences that affect,positively or negatively, what is presented in class. They may also have a widerrange of interests than day students in addition to possible need to find a newposition or help with career advancement, including serious focus on long rangecareer planning and in ideas for greater success. Some, of course are merelyinterested in gaining the course credit with a good grade.

3. Learners in non-degree courses or workshops have needs that are similar toevening students.

When looking at the challenges of helping these different types of learners gain whatthey, individually would consider most useful for career planning and careermanagement, it is worthwhile to look at delivery options and how they have changed inthe last few years.

Learning Programs for Career Management

The traditional classroom course, based on a texts, sometimes with heavy emphasis onself-analysis/assessment appears to continue to be the primary college/university offering,often enriched with interactive CD-ROM or internet research assignments.

It is now possible to offer a course rooted in the traditional topics of career planning,solely with reading assignments on commercial websites with free access. No data isavailable to indicate the extent to which faculty takes advantage of this opportunity.

Opportunities for Enriching a Course on Career Management

Considering the fact that most students, and especially evening students are not likely toapply most, if not all, the knowledge they gain during career management courses forquite some time, the primary benefits of these courses entails awareness of the steps to

36

take, if and when the need arises, and the availability of the reference which the textprovides.

The time savings that can come from use of websites, allows coverage of relevant life andcareeer skills such as verbal communications skills, conflict management skills, learningskills, and decision-making skills. Of these, only decision making, including goal setting,currently receives significant coverage. Still, all are skills which learners can applyimmediately at work, in school, and in their private lives. At the same time, they willgreatly enhance career management.

Every competent instructor and professor wants to place as much responsibility forlearning on students - motivate them to become self-directed learners. A course that usesthe approach suggested below, will do exactly that, while guiding learners toward acomprehensive view of career management AND toward the acquisition of the skills thatwill serve as catalysts to successful implementation of career plans.

A Brief Description of a High-Intrinsic-Value, Learner-Friendly, ComprehensiveCareer Management Course

In lieu of a relatively inflexible text, the course uses a workbook which contains outlinesand assignments. The assignments are for research on topics that expand on the outlinesand provide a similar, but richer, perspective. Each student has to bring a brief report ofat least one of the assignments (see Appendix for examples) with enough copies for allstudents, and make a presentation at one of the classes. These assignments, together,become a workbook or textbook that can be as rich as any published one and be a flexiblereference for the long term. It automatically adapts to the entire spectrum of students,from the one who is currently looking for a new position, to the one who, rightly orwrongly, does not give career management a high priority at the moment, but who maywant to revisit it at some later time.

Students either review the reports after the presentation and ask questions or offercomments, or are expected to do so at the next class session.

Most reinforcement and support, after the presentation, is needed on life skills topics thatstudents consider somewhat theoretical, because they feel that common sense is all that isneeded. Once students see how learning about these topics can be very valuable, theyreadily, even eagerly, participate in discussions of topics such as questioning techniques,and keeping the role of mediator in mind while being a party to a conflict.

Conclusion

A course such as the one described here can be very beneficial preparation for asuccessful career because it provides learners with all the content of a traditional course,awareness of, and direct contact with, the rich store of resources for career managementwhich is available on the internet, an extensive reference of specific sites and approaches

37

for searches to obtain guidance, and data on websites useful for career planning and othercareer management related topics. In addition, it can serve as detailed guidance forenhancing critical life-skills that will practically ensure better career management andcareer success while, at the same time, promoting a more satisfying personal life.

Career Management / Electronic Learning - Literature Review

The dynamic construct of career management has elicited a wealth of scholarly inquiry,as reflected throughout a host of contemporaneous, peer review literature. This can beexpected, as Ball and Jordon (1997) assert that the global populace is collectivelyexperiencing less resolute career paths, and affiliated decrease in employment security.Thus, it has been suggested that career management is an integral paradigm, of whichemployees must seize the reigns and retain personal responsibility (Ball & Jordon, 1997).Furthermore, Crant (2000) has suggested that career management is most effective whenapproached from a proactive perspective. It appears that a college/university course,which embodies the holistic tenets of career management, would prepare students forsuch an endeavor. It has also been suggested that employees should take control ofmanaging the direction and ultimate outcome of their careers (Kossek, Roberts, Fisher, &DeMarr, 1998). Through the implementation of a career management curriculum, thiscontrol can be aided, proactively, throughout the collegiate endeavors of aspiringprofessionals. Kossek, et al. (1998) have also communicated that precipitous (and largelydisadvantageous) changes in the structure of corporate culture have sharply precludedcorporations from managing the careers of their employees, thus requiring employees toenhance their own career management skills.

It is also noteworthy that technological advancements (i.e., internet-based, distancelearning) have had a significant impact on the communication and facilitation of careermanagement and professional development programs (Schmidt, 1994).

References

Ball, B., & Jordon, M. (1997). An open-learning approach to management and guidance.British Journal of Guidance and Counseling, 25(4), 507-516.Barker, J. & Kellen, J. (1998). Career planning: A developmental approach. UpperSaddle River, NJ: Prentice Hall.Breidenbach, M. E. (2001). Career development: strategies and technologies for careerand life balance (4th ed.). Upper Saddle River, NJ: Prentice Hall.Crant, M. J. (2000). Proactive behavior in organizations. Journal of Management, 26(3),435-462.Dikel, M., & Roehm, F. E. (2000). The guide to internet job searching . Lincolnwood, IL:NTC/Contemporary Publishing Company.Greenhaus, J. H., Callanan, G. A., & Godshalk, V. M. (2000). Career management (3rd

ed.). Orlando, FL: Dryden Press.

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Griffin-Levitt, J. (2000). Your career: how to make it happen. Cincinnati, OH: South-Western Educational Publishing.Jones, R. (1994). How to manage your career: Achieving your goals in a changingworkplace. Philadelphia, PA: Trans-Atlantic Publishing.Koen, D, & Lee, T. (2000). Choice, Change, and Challenge. Indianapolis, IN: JISTPublishing.Kossek, E. E., Roberts, K., Fisher, S., & DeMarr, B. (1998). Career self-management: Aquasi-experimental assessment of the effects of training intervention. PersonnelPsychology, 51(4), 935-962.Lore, N. (1998). The path-finder: How to choose or change your career for a lifetime ofsatisfaction and success. New York: Simon and Schuster.Schmidt, S. (1994). The new focus for career development programs in business andindustry. Journal of Employment Counseling, 31(1), 22-28.Sukiennik, D., Bendat, W., & Raufman, L. (2001). The career fitness program (6th ed.).Upper Saddle River, NJ: Prentice Hall.

Appendix (examples of assignments)Student research assignments cover topics such as:Review of websites on the economic environment (public revenue, and private and publicincome

statistics), on private and public employment (by occupation, occupation groups,and/or

industry), on obtaining information about a specific career field, etc.Questionnaires on listening and empathy, and on evaluation of competence in job-relatedskillsLimited review of literature on questioning, and probingLimited review of websites and literature on conflictLimited review of websites and literature on continuing and adult learningLimited review of websites and literature on decision makingLimited review of websites and literature on self awareness and self assessment , and onways to analyze, acquire, shed, or modify traits, habits, and appearanceLimited review of websites and book(s) on obtaining information about a specificposition, on resume preparation , on websites sites with free information oncorrespondence, etc.Limited review of non-internet sites with job openings and/or free opportunities to post ajob-search

message. Also of internet newsletters on job search or career planning, and jobfairs, on

advice on obtaining interviews, and for interview preparation, as well as onquestions an interviewer might ask and on those that can/should be asked/avoided

Limited review of websites and book(s) with advice on successful behavior on the jobLimited review of websites and book(s) on financial planningLimited review of websites and book(s) on planning for maintaining a healthy lifestyle.Limited review of websites and book(s) on retirement planning

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Stress Management Techniques Using Whole Body Learning and EmotionalIntelligence To Navigate Emotional Environments and Turbulent Times

M. Eileen HigginsBusiness Management Department,College of Business, Frostburg State University

Marion LeonardBusiness Management Department,College of Business, Frostburg State University

Abstract

This paper examines the state of the business world post-September 11, 2001, interms of worker stress and notes how the events of that day and beyond haveadded even more powerful stressors to those with which most American workerswere already struggling to cope. The authors argue that leaders must learn how tomanage high levels of stress to ensure a stable and high functioning work force.While there are many paths to this end, the authors focus on Emotional Quotient(EQ), also called Emotional Intelligence, and Whole Body Learning (WBL) asnew paradigms for effective leadership in these challenging times. EQ isexplained using research from Goleman and others, and Whole Body Learning isexplained using research from Hendricks and Hendricks and through three of itsprimary components: conscious breathing, mindfulness, or inner awareness, andpresencing.

Keywords: Stress Management, Emotional Intelligence, Whole Body Learning, Leadership

Introduction

The tragic events of September 11, 2001, will affect not only our previous sense ofsecurity and freedom as a community and society but will surely take their toll onorganizations and the individuals working for them. The toll may come in the form ofincreased manager and employee health problems and the decreased productivityassociated with managers’ and employees’ poor health—both physical andemotional—as manifested by absenteeism and anxiety or depressive reactions while onthe job.

The 9/11/01 attacks were not a singular event, as we all know. They were followed byanthrax contaminations in Florida, New York, Maryland, Connecticut, and Washington,D.C., and assurances from the United States government that more, and perhaps evenmore horrific, events were to follow. It may take decades to fully understand theramifications of the terrorist attacks both on society and individuals and on ourorganizations and workforce.

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In writing this paper, the authors hope to effect positive change in the coming months andyears by helping employers and employees discover and master methods of self-leadership and inner awareness so that they can not only persevere during times of chaos,uncertainty, and crisis, but also thrive. The authors will explore how Whole BodyLearning (WBL) enhances emotional intelligence (EQ) in the workplace and share howWBL and EQ may relieve workplace stress as part of management development, for it iswell-documented that managing stress is critical for enhanced reasoning and decision-making. EQ means intelligence about emotions—those of oneself and others. It refers to“the capacity of organizing our feelings and those of others, for motivating ourselves, andfor managing emotions well in ourselves and in our relationships” (Goleman 1998, p.317).

Emotional Environments and Turbulent Times

Today’s manager faces an almost overwhelming challenge in holding his or her teamtogether and remaining productive in light of the enormous stressors that are beingexperienced collectively since 9/11/01. The Wall Street Journal (and most other printmedia) run frequent columns concerning the changing and increasingly stressfulenvironment for businesses and employees following last September’s attacks. Forexample, some of the WSJ’s topics included reports of job loss or threat of job loss(Work Week 2001), financial challenges or even ruin due to low interest rates, fallingstock indexes, and increasing debt burden for older Americans (Opdyke 2001; Simon,2001; Eig 2002), workplace security issues (Hymowitz 2001), delayed job-start dates formany 2001 graduates (Dunham & Silverman 2001), new stresses on American MiddleEasterners (Kaufman 2001), the tough task of healing traumatized employees (Lublin2001), legal issues around the firing of employees who refuse to get on an airplane or theremoval of employees of Middle Eastern background from marketing brochures(Trottman 2001; Orey 2001), and bioterrorism threats and realities (Eig & Burton 2001;Terhune et al 2001).

In another WSJ article, Lagnado reports that a second wave of emotional trauma is hittingNew Yorkers and other Americans. Lagnado writes, “The strain of months of living withsearing memories, frequent terrorist alerts and fears about what the future will bring istaking a toll” (p. B1). “The challenge for psychiatrists,” says Randall Marshall, associateprofessor of clinical psychiatry at Columbia University, “is how to help people live in aworld that is constantly under threat” (Lagnado p. B1). The same challenge is appropriatefor organization leaders and managers.

Emotional Intelligence To Help Manage Stress in the Workplace

Daniel Goleman (1995) in his book Emotional Intelligence, reviews the difficultyemployees have in maintaining productivity when their emotions are out of control.When people are emotionally upset, they cannot remember, learn, or make decisionsclearly. Stress diminishes their creativity and productivity. A manager who can learn tomanage the emotional climate of his or her organization with the same proficiency that he

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or she manages tasks and resources will be a valuable asset for everyone in theorganization up and down the ladder. Goleman (1999) also includes handling stress bylearning the value of exercise, guided imagery, and relaxation methods as one of his eighttopics to be included in any emotional literacy curriculum.

Beatty (2000) notes that, “The will, the spirit, the desire to go on, the personal power todo one’s best for self and other is a fundamentally emotionally driven phenomenon.Emotions are subject to change without notice. The wise leader knows this abouther/himself, and about others, and respects the powerful potential for good or ill that liestherein” (Beatty 2000, p. 16).

The Latin definition for emotions is “the spirit that moves us.” However, emotions areneither positive nor negative. They are, instead, the most powerful source of humanenergy, authenticity, and drive that provide us with an abundance of intuitive wisdom. “Infact, feelings provide us with vital and potentially profitable information every minute ofthe day. This feedback from the heart, and not the head, is what ignites creative genius,keeps you honest with yourself, shapes trusting relationships, provides an inner compassfor your life and career, guides you to unexpected possibilities, and may even save you oryour organization from disaster” (Cooper & Sawfa 1999, p.2).

Goleman et al (2002) argue that the fundamental task of leaders is to create good feelingsin those they lead so as to free up the best in people. They call this “primal leadership”and show that at its root, the primal job of leadership is emotional. “For too long,managers have seen emotions at work as noise cluttering the rational operation oforganizations. But the time for ignoring emotions as irrelevant to business has passed” (p.xi). The authors encourage organizations to cultivate leaders who “generate the emotionalresonance that lets people flourish” (p. xi). A current example of a primal leader withstrong EQ is SoundView CEO Mark Loehr. Goleman et al write:

“A handful of friends, colleagues, and family members of [SoundViewemployees] were lost in the tragedy [of 9/11/01]. Loehr’s first response was toinvite all employees to come to the office the next day—not to work, but to sharetheir feelings and talk over what to do. Over the following days Loehr was thereas people wept together, and he urged people to talk about what they were goingthrough. Every night at 9:45 he sent out an e-mail to the entire company about thepersonal side of the ongoing events.

Loehr went a step further, encouraging and guiding a discussion of how to findmeaning in the chaos through an action they could all participate in to help out.Rather than just making a group donation, they decided to donate their company’sproceeds from one day of trading to those victimized by the tragedy. On anaverage day, that might be more than half a million dollars; the most they hadmade in a day was around $1 million. But as they spread the word of what theywanted to do to their clients, it inspired an amazing response: They raised morethan $6 million that day.

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…Mark Loehr courageously performed one of the most crucial emotional tasks ofleadership: He helped himself and his people find meaning and sense, even in theface of chaos and madness. To do so he first attuned to and expressed the sharedemotional reality so that the direction he eventually articulated resonated at thegut level, putting in to words what everyone was feeling in their hearts” (Golemanet al, 2002, pp xi-xii).

Unfortunately, those of us growing up in the United States and much of the rest of theworld have been socialized to set our emotions aside and become scientific: logical,rational, and analytical. While this scientific method is an important part of effectiveleadership/management and decision making, it is only a part. Many business researcherspoint out that our organizational leadership has put a premium on intellect (IQ),information, and technology, but has overlooked and underestimated trust and EQ ininfluencing productivity and bottom-line results. These “softer” skills are needed nowmore than ever (Tong 1999).

In his book, Descartes’ Error, Antonio R. Damasio explores the relationship of feelingsand emotions to rational behavior through his medical studies of patients with frontallobe lesions in the brain. (The frontal lobe of the brain appears to house or generate theemotions.) His discoveries and well-grounded research prove that those with frontal lobelesions permanently lose their ability to feel and experience emotions. No matter howintelligent and otherwise rational and competent these injured individuals were, uponrecovering from their injuries, they would enter a downward life spiral—consistentlymaking bad decisions, using poor judgment, displaying an inability to predict theconsequences of their behavior, and demonstrating an inability to visualize their futureand plan accordingly and appropriately for it.

The title of the book, Descartes’ Error refers to Damasio’s belief that 17th Centuryphilosopher and mathematician Rene Descartes’ famous statement, “I think therefore Iam” (Descartes 1644), is erroneous and is responsible for the notion of modern societythat the body and mind are separate.

(For those who would like to further examine the background of part of this paper’sresearch, please read the entire text of the Damasio book, in which his clinical researchand explanations illustrate how the body, mind, and brain are like a tapestry and areinseparable, instead of like Descartes’ error: “the abyssal separation between body andmind” (Damasio 1994, p. 250).)

Using Whole Body Learning To Enhance Emotional Intelligence and Manage Stress

Most of us have been told to “just relax” when we were manifesting stress symptoms, orwe have said that to others. But how many of us know precisely what that means or havebeen taught how to do it? The concept of Whole Body Learning, a trademarked termfrom the Living University in Santa Barbara, California, and developed by Drs. Gay and

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Kathlyn Hendricks, is a method of inner reflection, synchronized with consciousbreathing, that can be learned to enhance EQ, which can help manage stress. The finalpart of this paper will explain the WBL technique. It begins with an explanation ofconscious breathing, moves to mindfulness, and advances finally to presencing.

Conscious BreathingMost people unconsciously use breathing as a way to control or diminish their feelings.Restricting the movements of the breath reduces our ability to feel, leading us to believethat we can bring life under our command. According to Hendricks (1994, p. 151),“Breathing patterns precisely reflect the emotional difficulties people are experiencing orhave experienced in the past.”

MindfulnessTo cultivate awareness of our breath is to cultivate mindfulness. When we breatheconsciously, we begin to notice thought, sensations, and feelings that arise within us frombreath to breath. Paying attention to our breathing anchors us into the here and now andinto our physical being—our body. Paying attention to our breathing helps us to centerourselves so that we can experience everything that is going on in any given moment. Weare able to see things more clearly and with a growing awareness. Consciously breathingand staying aware of our emotions and feelings brings us into union with ourselves andwith others.

PresencingPresencing is a state characterized by an awareness and surrender to what is happening inthe present moment. Basically, presencing is a self-reflective, nonjudgmental placementof attention. Its greatest effect is simply staying with the here and now experience a littlelonger, gathering more information, and allowing things to happen by themselves.

Using the presencing technique, the individual becomes aware of sensations in the bodyby saying a personal growth statement such as “I always tell people when I am angrywith them.” While repeating these statements, the person witnesses his or her inner bodyreactions, breathing patterns, mental chatter, feeling responses, and body sensations.Staying with the sensations and paying attention to them, the person often comes incontact with old defenses and fears that have impeded his or her growth and blocked hisor her sense of congruency.

Summary

Our very survival may depend on our ability to trust others and to be trustworthyourselves, to share our resources, and build bridges to other people, organizations, andcountries (Ralston, 1999). As we begin to honor and acknowledge our emotions andshare our genuine feelings with others, we will begin to see just how much they affect ourbusiness relationships every day.

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References

Beatty, B. (2000). Emotion Matters in Educational Leadership. Paper presented to theAustralian Association for Research in Education Annual Conference, Sydney, Australia,December 3-8.

Cooper, R. & Sawaf, A. (1998). Emotional Intelligence in Leadership Organizations.Retrieved from the Internet May 22, 1999, http://www.sixseconds.com.

Damasio, A. R. (1994). Descartes’Error: Emotion, Reason, and the Human Brain. NewYork: Quill.Descartes, R. (1637). Discourse on the Method, Fourth Section. France.

Dunham, K.J., & Silverman, R. E. (2002). Some 2001 grads are still waiting for jobs tostart. The Wall Street Journal, February 19, B1, B8.

Eig, J. (2002). Less income, more anxiety. The Wall Street Journal, January 3, A1, A2.

Eig, J., Burton, T.M. (2001). Drugstore data could be tip-off to bioterrorism. The WallStreet Journal, November 14, B1.

Goleman, D. (1995). Emotional Intelligence: Why It Can Matter More than IQ. NewYork: Bantam Books.

Goleman, D. (1998). Working with Emotional Intelligence. New York: Bantam Books.

Goleman, D., Boyatzis, R., & McKee, A. (2002). Primal Leadership: Realizing thePower of Emotional Intelligence. Boston: Harvard Business School Press.

Hendricks, G. (1994). At the Speed of Life: A New Approach To Personal Changethrough Body-Centered Therapy. New York: Bantam Doubleday Dell Publishing Group.

Hymowitz, C. (2001). Evolution, revolution and the ins and outs of business vocabulary:in: workplace security. The Wall Street Journal, December 18, B1.

Kaufman, J. (2001). These are tough times for a comedian who is also an Arab-American: but the Comedy Store in L.A. is a nightclub where jokes on touchy subjectswork. The Wall Street Journal,December 6, A1, A8.

Lagnado, L. (2002). Bracing for trauma’s second wave. The Wall Street Journal, March5, B1.

Lublin, J.S. (2001). The tough task of healing traumatized employees. The Wall StreetJournal, September 25, B1, B6.

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Opdyke, J.D. (2001). The big squeeze: for retired Americans, low interest rates ruin best-laid plans. The Wall Street Journal, December 26, C1, C13.

Orey, M. (2001). Disaster raises new legal issues in the workplace. The Wall StreetJournal, November 20, B1, B10.

Ralston, F. (1999). Hidden Dynamics: How Emotions Affect Business Performance andHow You Can Harness Their Power for Positive Results. New York: AMACOM.

Simon, R. (2001). Older Americans debt burden is growing. The Wall Street Journal,December 26, C1, C13.

Terhune, C., Carrick, M., & McGinley, L. (2001). CDC is stretched thin as it takes a leadrole fighting bioterrorism. The Wall Street Journal, November 14, B1.

Tong, C. (1998). Are You An Architect of Trust? Retrieved from the Internet May 22,1999, http://www.sixseconds.com.

Trottman, M. (2001). Unnerved by air disasters, families beg travelers to stay on theground. The Wall Street Journal, November 15, 2001, B1.

Work Week. (2001). A special news report about life on the job—and trends taking shapethere: unemployment lines: busy signals and long waits plague jobless programs. TheWall Street Journal, December 18, A1.

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Effects Of Diversity On Performance:Strategies Pursued By Groups

Jack L. HowardMQM Department, Illinois State University

James T. Brakefield*Department of Management, Western Illinois University

Abstract

Research on the topic of diversity has increased in the past several years, in anattempt to move beyond conceptual ideas to more a more empirically basedexamination of diversity (Richard, 2000). The present paper is a qualitativeanalysis of the effects of diversity on group performance. Specifically, theinteractions among group members are examined within the context of a specificexercise. Strategies developed within this context are examined and tied into theexercise, in an attempt to determine the effects of diversity on strategydevelopment. The implications of these qualitative findings and future directionsof research are discussed.

Introduction

This study is a qualitative examination of an ongoing research program. Howard andBrakefield (2001) have found that groups are effective at following instructionsassociated with tasks. In a preliminary and exploratory analysis, however, diversity wasnot found to directly affect the performance of the groups. Indirect effects were present,providing the researchers with hopes that diversity might influence performance, butcontinuing research is necessary to determine if diversity might influence performance.

The major assumption made by many organizations is that diversity is inherently good.Organizations have self-reported that diversity initiatives have had positive effects intheir respective organizations (Bowl, 2001). The major problem with these results is thatthey are based on a very low response rate (14 percent) and that the survey waseffectively focused on diversity initiatives, not diversity per se.

Brakefield, White and Howard (1999) have called into question the overall concept ofstudying diversity, as well as the practicality of such research. They have inadvertentlypointed out that the fact of the matter is that organizations cannot dramatically alter theirdiversity over night. Rather, the issue is one of managing the diversity that is presentwith the organization. As demonstrated by Tziner and Eden (1985), it could be thatdiversity is not simply a substitute for ability.

The present study examines the effects of diversity on how teams pursue a task.Specifically, how teams develop a strategy under a specific set of circumstances is

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eamined qualitatively. It could be that the type of task dictates the strategy pursued, aswas found by Howard and Brakefield (2001). However, it could be that diversityinfluences how the strategy is developed, rather than how the strategy is pursued. Byconducting a qualitative analysis, insights can be gained to determined if diversity, andwhich types of diversity, might influence group performance. This could go far to fill inareas lacking in the field of research focusing on diversity (see Milliken and Martens,1996 for a review).

Method

SubjectsSubjects were students taking a course on conflict management in a graduate program ata university in the Midwestern region of the United States. The sample included studentsfrom a wide range of occupations and countries.

ProcedureAs part of the instruction on conflict management, graduate students participate in avariety of experiential exercises. One such exercise is “the disarmament exercise”(Lewicki & Litterer, 1993). Groups were randomly formed, and each student was askedto voluntarily complete a brief questionnaire, inquiring about their course of study,hometown, age, sex, race, parents’ occupations and “achievement through work” (Warr,Cook & Wall, 1979). All information was provided anonymously. Instructions forcompleting the exercise were provided for each member of each group. However, onepair of groups was given instructions to cooperate, while the other pair of groups wasgiven instructions to compete.

Groups were given 45 minutes to read the instructions, ask for clarification of theinstructions and develop a strategy independently of the other group. Specific procedurescan be found by examining the exercise developed by Lewicki & Litterer (1993). Groupscould make as many as seven moves to gradually increase or decrease armaments. Aftera move groups had the option to negotiate with the other team, to attack the other team,or to do neither. Once a round was completed, teams could win money at the expense ofthe other team, lose money to the other team, win money from the World Bank or losemoney to the World Bank. Scores were expressed in dollar terms, and were carried overto subsequent rounds. Once a round was completed, armaments, however, went back totheir original positions, meaning each team would have 10 armed and 10 unarmedweapons.

Group Dynamics

Each group had diverse representation. All groups had both males and females present.Additionally, each group had racial minorities and/or international individuals present inthe group. Members of the groups varied considerably in terms of their occupations,from full-time graduate students to engineers to accountants to operations managers. Theone area where diversity was not quite as present was in the area of achievement

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orientation. While there existed variation in achievement orientation, most individualsreported high levels of achievement orientation, with only 1 individual reportingmoderate achievement orientation.

Finally, information for each group’s moves, whether they attacked, were attacked or noattack occurred was also coded for each group. The funds were also recorded, and avariable indicating changes in the funds for the world bank was created.

Analysis

Groups were observed as they developed their strategies. Groups had to develop theirstrategy based on their objective, taking into account the reward structure. A total of fourgroups, or two sets of groups, were observed. One pair of groups was instructed to workcollectively with the other group, in an attempt to accumulate the most money possiblecollectively. The other pair of groups was instructed to accumulate as much money asthey possibly could, independent of the other team. In other words, they were to competewith the other team. Groups were then observed to determine how they would developtheir strategies.

Cooperative Groups. Groups that were instructed to accumulate the most money theycould collectively quickly identified that the only effective way to accomplish this was todisarm, receiving a small payout from the world bank. Each group identified that takingmoney from the other group would not achieve the objective of increasing the collectivesum of money of the groups involved in the exercise. Additionally, in over 60 previousobservations, this was the first set of groups that decided to actually show the other groupthe number of weapons it had armed. This appears to be a good faith attempt at totaldisclosure, and that by showing the other team what they were doing, and then theywould have no choice but to believe them. Each team identified this course of action, andthen followed up on this course of action. After three rounds, these groups had not onlydepleted the world bank funds, but had the world bank operating at a deficit.Additionally, each group doubled their initial set of funds.

Competitive Groups. Groups that were instructed to accumulate as much money as theycould, regardless of the other team, developed very different strategies. The first groupdecided to be competitive from the start. They identified that the high risk, high payoffroute would be the way to begin, leading to a major financial gain in round 1. They thenthought that as long as the armed all weapons in subsequent rounds, they wouldguarantee a net gain. However, they failed to consider that if they did not massivelyoutnumber the opposing team that they would only have a modest gain in round 1, andultimately end up with less money than they started the exercise with.

The second team, using their diverse occupational backgrounds, spent their 45 minutesexamining the various courses of action. Based on their examination of the various waysto attempt to gain money, they found 1 way that would prove to be particularly effective,provided that they other team would communicate with them and work with them. The

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way to gain the money was to disarm, resulting in a modest gain. Competing with theother team was viewed as leading to losses for both teams, thus both teams falling shorton the achievement of their objective. Additionally, their strategy was to negotiate withthe team at every opportunity, and to reach an agreement at full disclosure of the movesthat had been made by showing the other team their moves, provided the other team didthe same.

After the first move, the second asked for negotiations. The first team refused. Giventhis sign of bad faith, the second team altered its strategy and began arming its weapons.After the second move, the second team again called for negotiations. Again, the firstteam refused. The net result was that before the round was over the first team attackedthe second team, leading to a more modest financial gain than expected. Additionally,the second team became distrustful of the first team.

Rounds two and three became more competitive between the two teams, and ultimately,since team two had no option but to become competitive to minimize losses, led to asituation where both teams lost money, and ended up financially worse than their startingpositions.

Discussion

The present study is exploratory in multiple ways. First, it is a study attempting todetermine if diversity of team members leads to different strategy development. Thediversity present in the groups did lead to different ways of viewing how to approach theproblem. In the case of the cooperative condition, each group not only identified a viablestrategy, but pursued the sharing of all information, something not observed in over 60previous observations in the ongoing research program. While they did not necessarilyexamine all of the same options, they did identify the same basic strategy, that ofdemonstrating to the other team that they were being honest. The different occupationalbackgrounds led to a variety of discussions within each group on how to bestcommunicate and negotiate with the other team.

In the case of the competitive condition, one group focused on “winning” or “defeating”the other team, rather than examining the fact that a series of rounds would be conducted,and they would have to live with the consequences of their actions in subsequent rounds.Even though this team was diverse, they all focused on “winning”. The other teamexamined the reward structure systematically, in conjunction with their objective. Theyused decision-making tools such as decision trees to arrive at a conclusion that for eachteam to increase their funds, they must work together. They also wanted to communicatewith the other team and fully disclose their moves. However, the two groups used verydifferent strategies, ultimately leading to the failure of each group to achieve theirobjective.

Second, this study is again a preliminary analysis of research in progress. The qualitativefindings of this research are encouraging. The findings are consistent with the findings of

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Howard and Brakefield (2001), that the type of task was found to significantly influenceworld bank funds. Those groups told to work with one another effectively did that, andeffectively lowered the world bank holdings, as they were rewarded by the world bankfor this behavior. Those groups told to compete, effectively did that, and were penalized,thus increasing the world bank holdings. Even though one group wanted to work withthe other group, the net effect was that competition was ultimately pursued, even if out ofnecessity by the second group. Accordingly, this does demonstrate that the groups tookthe task to heart, and effectively pursued their objectives.

The most encouraging part of the study was the fact that these particular groups decidedto pursue the exercise differently than the groups in the past had pursued the exercise.Instead of just negotiating with each other, having to assess the honesty of the othergroup’s statements, they decided to disclose full information, showing the other partytheir course of action. Even one of the groups in the competitive condition identified thisas the way of increasing their lot, and thus achieving their objective.

Perhaps the results are different because in many cases these are actual managers, andthey know better the “facts of organizational life” that cooperation is the key to successnot only in an organization, but also among organizations. Perhaps the results aredifferent because this class collectively represents the most diverse group of participantsin the study to date. Not only was the class as a whole more diverse, but each group ismore diverse than in other classes, where groups have existed with only 1 male or femalein some groups, and groups where only 1 racial minority member was present. In each ofthese groups, the number of men and women were either equivalent, or within 1 personof being equivalent. Additionally, in only one group was there a situation where only 1racial minority member was present. In each of the three other groups more than oneracial minority member was present.

To improve this line of research, more data must be collected. Continuing bothqualitative and quantitative analysis must be conducted. In terms of qualitative data,examining groups at the undergraduate level needs to be examined more closely andofficially. In terms of the quantitative data, more data needs to be collected so that bothmain effects and interaction effects can be effectively examined.

Conclusion

The qualitative results are encouraging. Examination of the dynamics within andbetween groups should continue to be conducted to determine whether or not varioustypes of diversity influence the strategies developed by groups. The strategy of sharinginformation is new to this study, and needs to be examined if and when the opportunitypresents itself. The most consistent finding, however, was that task type had a directeffect on team performance, supporting previous research (Howard & Brakefield, 2001).Specifically, teams with instructions to cooperate, cooperated. Teams with instructions tocompete, competed. It seems then that teams, regardless of how diverse they are, willtend do what they are given are to do. Diversity may influence how effectively they do

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it, but probably is not either an impediment to, or a substitute for, proper training andsupervision.

References

Bowl, K. (2001). Diversity means good business, survey says. HR News. Vol. 20, No.7, p. 12.

Brakefield, J.T., White, C., and Howard, J.L. (1999). Managing workforce composition:What good is diversity? Emerging Issues in Business and Technology 1999 ConferenceProgram and Proceedings. Pp. 79-83.

Howard, J.L., & Brakefield, J.T. (2001). Effects of Diversity on Performance: The Effectsof Task-Type. Employee Responsibilities and Rights Journal, 13, 147-154.

Lewicki, R.J., and Litterer, J. (1993). Negotiation: Readings, Exercises and Cases (2nd

ed.). Richard D. Irwin, Inc.: Boston.

Milliken, F.J., and Martins, L.L. (1996). Searching for common thread: Understandingthe multiple effects of diversity in organizational groups. Academy of ManagementReview. Vol. 21, No. 2, pp. 402-433.

Richard, O.C. (2000). Racial diversity, business strategy, and firm performance: Aresource-based view. Academy of Management Journal. Vol. 43, No. 2, pp. 164-177.

Tziner, A., and Eden, D. (1985). Effects of crew composition on crew performance:Does the whole equal the sum of its parts? Journal of Applied Psychology. Vol. 70. pp.85-93.

Warr, P.B., Cook, J. and Wall, T.D. (1979). Scales for the measurement of some workattitudes and aspects of psychological well-being. Journal of Occupational Psychology.Vol. 52, 129 – 148.

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Terrorism and Human Resource Management: Recovery, Reconsideration, andRenewal

Jack N. Kondrasuk,School of Business Administration, University of Portland

Robert B. Pamplin, Jr.School of Business Administration, University of Portland

1Abstract

The United States suffered an unprecedented loss of life on September 11, 2001from what was labeled a “terrorist attack.” The United States, and many othercountries of the world, have been significantly affected by the events andaftermath of that morning’s events. This paper looks at the changes that haveoccurred to businesses, and especially the function of human resourcemanagement within those businesses. Some aspects have changed significantlywhile others have not. Significant changes have occurred in employment,compensation and benefit, safety and security areas of human resourcedepartments as well as a much greater emphasis on an overall business crisismanagement program. It is likely that employers will have future terrorist attacksto deal with but the attacks will likely be from different groups than in the pastand with different methods. To counteract these new threats, new procedures arebeing put in place.

Introduction

10,000 people perish in terrorist attacks in the United States” were typical headlines inpapers in the United States the day after three commercial airliners were used as bombsto destroy the World Trade Center twin towers as well as part of the Pentagon onSeptember 11, 2001. The United States populace, and indeed the people of the world,have become much more attuned to terrorism since “9/11” (as the events that occurred onSeptember 11, 2001 are referred to.). Since then we have experienced anthrax-infectedmail, bombs in packages, ambushes and attacks on US and other anti-terrorist forces inAfghanistan, and many threats of other terrorist activities such as bridge bombings andinternet destruction. We have made significant changes in security at airports and at largepublic gatherings.

Purpose and Plan of Paper

The events of 9/11 have caused us to look at the results and future of terrorism in theUnited States. In this paper we will assess changes as a result of 9/11 as they affect US 1 Thanks to the following University of Portland students who assisted in providing information for thisproject: Ryan Brown, Brian Dundon, Jason Fowler, Casey Freeman, Teresa Kaufman, Darci Kueffler,Brian Mara, and Curtis Spiteri,

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business and especially human resource management. We will then look at whatbusinesses and human resource departments can do as well as look at the future ofterrorism in the United States. There are many general articles in the popular press aboutthe effect of terrorism on employers, but there are few empirical, objective researcharticles from academe. This is an attempt to bridge that gap.

Definitions

Before we explore the effects of terrorism on human resource management, we shoulddefine our terms. “Terrorism is the unlawful use of force or violence against persons orproperty to intimidate or coerce a government, the civilian population, or any segmentthereof, in furtherance of political or social objectives” as defined by the FBI. (TheTerrorism Research Center, 2002) It might be added that terrorists in the 9/11 events alsowanted attention and were willing to die for their cause. Dessler (2003, p. 530) defineshuman resource management (HRM) as “the policies and practices involved in carryingout the ‘people’ or human resource aspects of a management position, includingrecruiting, screening, training, rewarding and appraising.” The Human ResourceCertification Institute of the Society of Human Resource Management (2002) considersthe main parts of HRM to be strategic management, workforce planning andemployment, HR development, compensation and benefits, employment and laborrelations, and occupational health, safety and security. We will use these definition in ourdiscussions.

Background of Terrorism affecting Employers

The terrorists on 9/11 were ascribed as 19 hijackers who came from Middle Easterncountries. How do they get into the U. S.? NBC Nightly News (5/28/02) said the 19hijackers all entered the USA legally. Compare that to about 50 million people whoentered the USA during August of 2001 and the estimate of 8-11 million illegal alienspresently in the USA. With over 6,000 miles of land borders and 95,000 miles of seacoastand many airports, watching all entrance points is generally impossible.

Terrorist acts could be classified as 1) physical or 2) psychological. The former usuallymust be done at some time before the latter gains its power. However, the overlap andintertwining relationship of the two can be quite complex. The physical methods ofterrorism include 1) explosives such as bombs, 2) biological weapons such as anthrax, 3)nuclear radiation, 4) chemical weapons such as toxic agents in drinking water, 5) guns &other weapons, and 6) cyber warfare such as computer viruses that could shut downprivate companies and government operations.

Terrorists could hit targets in many different locations. They could attack officebuildings, airports and airplanes, banks, bridges, trains, subways, water systems,communications systems, utilities including nuclear power plants, and computer systemsin the United States. They are thought to be more likely to attack high-profile landmarks,any crowded public places with low security, anything that would hurt the U. S.

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economy, and anywhere they could kill the maximum number of U. S. residents. (NBCNightly News, May 28, 2002) It should be noted that not all terrorist activity against theUnited States has been perpetrated on U. S. soil; much has been on foreign soil where itis more difficult to protect U. S. interests—for instance, against U. S. embassies incrowded inner cities of poorer nations.

General Effect of Terrorism

The 9/11 attacks had a number of results. The general tenor of the populace in the UnitedStates was sorrow and outrage after 9/11. The citizens of the U. S. were drawn muchcloser together; there was a significant increase in cohesion of the populace. PresidentBush declared “War on Terrorism” and received tremendous public support. There wasan incursion into Afghanistan to find Osama Bin Laden and destroy Al Quada andTaliban forces. There has been greater coordination of the intelligence and lawenforcement communities like the CIA and FBI. The insurance industry has certainlybeen affected by having to pay for a lot of the damage. Oster (2002) says that terroriststrikes were the greatest single loss for the insurance industry last year—being over threetimes more costly than the second most costly calamity---- the effects of HurricaneAndrew. However, Bolger (2002) states that the insurance industry has already recoveredfrom those tremendous losses. There has been both hatred and acts of discriminationagainst Muslims as well as a new inquisitiveness to learn more about Islam. People haveopened up their hearts and pocket books in an initial outpouring of donating money andblood to help the victims of 9/11. This prompted some to say we developed a kinder andgentler society.

The effects on employers were less readily seen. What was the effect on employeeproductivity? An article in the Oregon Employment Law Newsletter stated that a recentsurvey found 80% of the responding employees said they were at least as productive asbefore 9/11. (Keith and Symes, 2002) Crisis management teams and plans took onincreased emphases. Companies built high-security, armored meeting rooms for theirexecutives and boards of directors. (Maher, 2002) The operating expenses and budgetsfor companies went up significantly in some cases. Additional costs and more securityprocedures led to slower movement of goods, services and people. Bernasek (2002)estimated that it will cost the US an extra $151 billion dollars a year because of the 9/11terrorist attacks: $77B for logistics such as transportation of goods and people, $35B forinsurance and liability, $18B for workplace security, $15B for better informationtechnology, and $6B for people costs such as extra absenteeism.

Effect of Terrorism on HRM

A week after the 9/11 attacks, the Society For Human Resource Management (SHRM)surveyed 120,000 of its members about the effects of the attacks. There were over 5,600responses. Those respondents stated that 76% of their companies allowed employees tocancel or delay business travel, 62 % allowed employees time off if need as a result of9/11, 50% collected money and sent it to aid the victims, 45% cancelled meetings and

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events, 66% expected employees would be more caring toward one another, 56%expected tighter security at their employer, many employees were concerned with theeffects on the economy—especially layoffs, and the majority said their employees werecoping with the situation about as expected. (SHRM, 2001) SHRM did another pollregarding changes employers have made in crisis mgmt training, communications, andactivities 7 months after the 9/11 incidents; over half of about 4,000 respondents statedthat it made no difference while only 11% said they made sweeping changes. (SHRM,2002)

Strategic Management

The HR departments became more concerned with policies. Crisis management plansdrew much more attention. It was found that about half the respondents in a SHRMsurvey stated they had a crisis management plan as of 9/18/01; many more saw thewisdom of having one after 9/11. (SHRM, 2001) Succession planning could now includeplanning to spread out the workforce so as not to wipe out management or a hugeoperating part of company in case of a terrorist attacks.

Employment

A number of changes could have occurred in the employment area. Little evidence isavailable to substantiate. Job descriptions could have been modified to account for newresponsibilities or risks regarding terrorism. Employment plans could require morepeople as additional time (and thus employees) may now be needed regarding securityactivities. Increased call-ups of national guard troops and reservists meant that they mustbe replaced with new employees; but HR departments still had to plan for return of thosecitizen soldiers who were called up. The worksite location now took on new significancein recruiting— a SHRM (2001) survey showed a 35% increase in applicants who wantedto avoid high- rise buildings in crowded locations. There were changes in career fieldschosen by young people— both those seeking more safety and those seeking moreservice to America. There were changes in selecting applicants. There was an increasedemphasis on close screening and reference checking of applicants for terroristconnections. In the SHRM (2001) survey it was found that 23% expected greaterscreening for terrorists. There may have been fewer job opportunities for those perceivedas Middle Eastern and/or Muslim.

Training and Development

More training would probably now be done to help employees gain skills in recognizing,preventing, and responding to threats of terrorism. Due to the quickly-changing terrain ofterrorism, continuous retraining would now probably be necessary. In the SHRM (2001)survey 35% of the respondents expected increases in training for crisis management anddisaster recovery.

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Employee Mobility

HR departments would be expected to help plan how to enable employees to continue towork during the threat of, the actual event of, and the aftermath of a crisis or terroristattack. It would also be important to protecting management in secure areas and relocatemanagement and production staffs during crises. In some companies plans wereestablished to vary travel routes taken by executives and key personnel—for travelingto/from work or as a part of work.. Special programs were provided to those traveling oncompany business for dealing with their fear of terrorism while flying. Telecommutingwould be expected to become a more popular option to the normal work week andcommute. Companies tried to minimize air travel for their employees. Economy.comexpected an extra hour’s delay at airports for security screening would cost society $8billion/year. (Bernasek, 2002)

Compensation & Benefits

The changes expected here would probably involve employee benefits (although onecould imagine that certain jobs might receive additional “hazardous duty” pay for greaterthreats of terrorism). Additional hiring of internal counselors and greater use of EAPs forthose employees suffering acute stress would be expected. So would more long-termtherapy for traumatized and stressed employees. Many present insurance policies excludepayments for death, injury and destruction caused by acts of war and terrorism. Franklin(2002) says that the insurance companies have seen a huge rise in demand for “political-risk insurance” (e. g. for terrorism coverage) since 9/11. Additional concerns ariseregarding employee benefits being affected by terrorist attacks. How will companies dealwith healthcare costs: for hospitalization and medical care after a terrorist attack? Whowill fund the cost for vaccines and drugs to prevent bioterrorism (e. g. smallpox oranthrax outbreaks)? How about more travel/accident insurance? What about lifeinsurance where death is caused by the results of terrorism? This may not be coverednow; will it be covered in the future? Will employees demand it and in higher dollaramounts?

EEO

After the 9/11 events national news stories told of how some Muslim places of worshipwere being damaged or harassed. Shortly after that the Equal Employment OpportunityCommission issued a statement condemning discrimination against Muslims and Arabsand noting that it was wrong and such treatment would be viewed as illegal.

Occupational Health, Safety & Security

The area expected to be most affected by the events of 9/11 is the area of health, safety,and security. It could be expected that this area would gain greater status and higheroperating budgets in the future. The latest BNA Bulletin to Management (2002)indicated that in over half of the organizations HR departments were responsible for

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security in their companies. Employers are legally responsible for the health and safety oftheir employees under OSHA rules. Conlin (2001) suggests that such responsibility alsoextends to parking areas and the commute to work. Security outside the company likeparking lots, adjoining neighborhoods, proper outside lighting and emergency call boxesand security cameras are often overlooked.

The safety and security unit would be expected to place more emphasis on a number ofsecurity aspects in companies. Entry and exit to the premises should gain attention.Overman (2001) says that employee ingress/egress must be further constricted andseparate from that used by non-employees such as visitors, customers, and suppliers.Metal/explosives/weapons detectors and ID badges should be improved. Security guards,bodyguards for executives, and surveillance cameras should be added. Non-employeeson the premises, such as visitors, should be monitored closely. Mail and the mail roomwill probably need more security procedures to avoid hazards such as letter bombs andanthrax in letters. We must realize that many of these changes will impact the rights ofemployees by limiting their individual freedoms and rights to privacy.

There was no information found specifically about how terrorism did or could affectunion/management relations, performance appraisal, employee discipline, or,surprisingly, risk management.

The Future Regarding Terrorism

We have made changes due to the events of 9/11 and more are on the way. We will havemore sky marshals to provide more security on airline flights, new federal securityscreeners at airports, and better screening equipment at airports by the end of 2002.That’s the good news. The bad news is that we are told by the FBI chief that eventuallysuicide bombers will hit the USA. It is not “if” but “when” the next attackoccurs—expect it on US soil. Suicide bombers will probably attack large, crowdedpublic places where there is low security.. (Adetunji, 2002) There could be future actionsby the US government such as incursions into Pakistan, Iraq, Libya, or North Korea.Pollard (2002) predicts a relative decline in ideological terrorism while he expects anincrease in ethno-religious terrorism, single issue terrorism, and true guerilla terrorism.

References

Adetunji, Lydia. (2002). FBI chief warns of likely suicide bombers. Financial Times,May 21, p. 2.

Bernasek, Anna. (2002). The friction economy. Fortune, 145 (4), 104-112.

BNA Bulletin to Management. (2002) SHRM-BNA survey # 66: Human resourceactivities, budgets & staffs, 2000-2001, pp. 1-3.

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Bolger, Andrew. (2002). Industry recovers from September’s terrorist shock.. FinancialTimes, May 24, p. 10.

Conlin, Michelle. (2001). When the office is the war zone. BusinessWeek, November 19,p. 38.

Dessler, Gary (2003). Human Resource Management (9th ed.). Upper Saddle River, NJ:Prentice Hall.

Franklin, Daniel. (2002). Mission: Intelligence. Time, Global Business, March, pp. B6-B13.

Keith, C. L., and Symes, D. P. R. (2002). HR trends. Oregon Employment Law Letter, 8(5), January, p. 4.

Maher, Kris. (2002). Playing it safe. Wall Street Journal, May 23, p. B1.

NBC Nightly News. (2002). Are we prepared? May 28.www.msnbc.com/news/prepared.

Oster, Christopher. (2002). Can the risk of terrorism be calculated by insurers? ‘Gametheory’ might do it. The Wall Street Journal, April 8, p. C1, C8.

Overman, Stephanie. (2001). Companies go back to work. HRNews, 20 (11), 1, 8,.

Pollard, N. A. (2002). The future of terrorism. The Terrorism Research Center,www.terrorism.com/terrorism/future, May 31.

SHRM. (2002). SHRM online poll results. www.shrm.org, April 10.

SHRM. (2001). More caring, security predicted following attacks, poll shows, HRNews,20 (11), 14,17.

Taylor, Suzanne. (1999). Disasters—Emergency preparedness. White Paper,www.shrm.org., April..

Terrorism Research Center. (2002). www.terrorism.com.

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A Reluctance to Recognize the Cost of People

Jacqueline E. La MuthOhio State University Extension

Daney Jackson,Ph.D.Ohio State University Extension

Abstract

What happens when we fail to include the value of our own time and the value ofthe time of those who work with us when we plan projects? Extensionprofessionals historically have had limited interest in the cost of doing businessbecause funding sources have been stable. This is no longer the case today.Seeking external funding through grants and fees for educational services appearsto be a viable option to find new monies. Extension professionals often seeopportunities to fund programmatic growth in a simplistic way. A few hours spentwriting and submitting a project proposal can become a resource nightmare onceproposal is approved, the contract is signed, and the project begins. Poorlyplanned projects almost always siphon off resources that are committed to otherwork, often lead to a decline in the quality of existing programs, and eventuallymay cause the loss of on-going support. Extension professionals seem unpreparedto work with budgets because they have had little or no training on how tocalculate actual costs of a project. As the sources and conditions of fundingchange, the need to integrate fixed costs of operation into individual projects isgrowing. It is becoming important to understand how to include individualprograms and budgets as part of larger comprehensive budget. With the additionof externally funded projects, Extension professionals are being forced to developnew managerial skills. The competencies that will be needed by the 21st centuryExtension professional are changing; Extension professionals must see themselvesas program and resource managers rather than the direct deliverers of services; thekinds of professionals who are recruited, the training and re-training that isoffered, and how performance is reviewed and rewarded must change.

Historical Tendencies

Extension professionals historically have had little reason to pay attention to the cost ofdoing business because their funding sources -- county commissioners’ dollars, alongwith state and federal funds -- have been predictable, stable, and increasing. By havingmultiple major funding sources, there was generally a balance. When one funding sourcewas tight, the others were more available. Extension professionals were encouraged tofocus on teaching and programming, and leave concerns about support for their programsto the organization’s leadership. For many years, there was even some feeling that asfederal employees, they should not engage in awareness activities that might be construedas “lobbying.” Because they were tax supported, they always thought of themselves as

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being “free” or “already paid for” by the people they serve. There was no need to makebig “newspaper splashes” about program successes in most communities becauseExtension work was familiar and important to most people. Extension professionalsworked quietly and cooperatively with and through local people. With their science-based orientation, they were reluctant to suppose they alone were responsible forsuccesses, and they tended to share or give credit to others. The extension system itselfwas comfortable and secure with the notion that knowledge that funding would alwayscontinue…until the times changed and money became less of a sure thing (Astroth &Robbins, 1986).

A Changing Environment

Today, traditional funding sources are shifting and no longer keeping pace withorganizational needs and opportunities. These shifts include: Changes in the distributionof federal and state dollars, shifts in populations and legislatures’ priorities, and theappearance of new organizations that offer programs similar to Extension’s, and readilycompete for the dollars to do it. Competition is pushing Extension professionals to beginlooking for grants and charging user fees for educational services as a viable way tomaintain their budgets (Stiehl, Bessey, & Schmall, 1992). And indeed, monies from userfees, grants, and contracts have been the fastest growing source of funding since 1990(Healy, 1997). OSU Extension’s efforts to secure funding beyond traditional sourceshave increased more than doubled in the past two years.

Reluctant and Unprepared Professionals

Why do Extension professionals hesitate to place a dollar value on their time and effort?Their history certainly has an influence. Individuals who find the loosely structured,people-oriented, self-managing nature of Extension so rewarding may find it difficult todifferentiate between personal community service and work. They also may have weakbudget development skills because they lack training and experience related to HR costs.Whatever the reason, it is agonizing for most Extension professionals to place dollarvalues on time and effort, and then include it in the project budget they are developing –they are reluctant to include them and sometimes adamantly refuse to even consider it.

The Hard Reality of Costs

Extension professionals often oversimplify opportunities to fund programs and use broadestimates as they develop the budget. Only when someone mentally “walks” through theprogram, from beginning to end, do the less obvious personnel costs emerge (Jackson &Johnson, 1999). Only when all the hours that will be needed to support a single unit ofdirect program delivery are considered and added to the delivery hours, will a moreaccurate human resource picture become apparent. For example, someone hired to teach20 hours per week may be supported by a supervisor who assists with problem solvingand conducts performance reviews, someone who takes registrations on the phone,someone who makes copies of handouts and worksheets, someone who orders supplies

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and food, and someone who maintains the computers. The teacher may have less obviousexpenses, too, such as time spent developing or customizing lesson materials, problemsolving with the supervisor, time spent training, traveling, and answering questionsbefore and after the lesson. A person who might be paid $13 an hour can have $75 ofsupport behind the scenes that need to be acknowledged as part of the project costs.These are real tasks that will be done, and they have associated costs. By knowing whatthey are, a professional can manage them and pro-actively decide what can be absorbedand will need to be included in the proposal budget (Jackson & Johnson, 1999). If HRand other project needs are not thoroughly examined as the budget is being developed,Extension professionals may set into motion events that will eventually dilute, stretch,and perhaps compromise existing programs. Repeatedly siphoning resources fromexisting programs and people will almost certainly erode morale, along with the qualityand quantity of existing programs and perhaps lead to a loss of on-going support.

Common Errors in Developing Budgets

Extension professionals may submit project budgets that are faulty in another way, too.In their haste to finish the budget, they may incorrectly guess at the pay level of thepeople who will be hired to do the work. Pay levels are tied to the amounts ofindependent work and independent judgment the new hire will be expected to use. A lowpay level may make it difficult to find someone qualified to hire. If the pay level must beincreased to fit the position description after the funder has approved the project budget,there will be fewer hours available to achieve the goals. Because accurate HRrequirements of the project were overlooked or hastily calculated, the Extensionprofessional will be forced to draw from other organizational and personal resources tokeep the promises made.

Extension professionals may face another kind of challenge if they successfully secureoutside funding that results in new personnel who must be supervised and trained -- theyneed to become managers of others. This can be disturbing and frustrating to Extensionprofessionals because they tend to see themselves as teachers rather than as managers(Buford, Bedeian, Lindner, 1995). They may be comfortable with an assistant whoworks closely with them, but that is very different from delegating work to an individualwho will work independently and away from immediate supervision.

Unrecognized Needed Competencies

Most studies of Extension professionals’ competencies and training needs can be tracedback to competencies identified in 1959, and they tend to be similar in the tasks identifiedand the way the tasks are grouped. Management duties and tasks have been embeddedwithin administrative categories or ignored all together (Gonzalez, 1982; Holzer, 1995;Leidheiser, 1970; McCormick, 1959; Price, 1960; Soobitsky, 1970). These competenciesestablished more than 40 years ago, continue to influence the way Extension considersthe work of county program professionals. When asked to identify their training needs,the people in theses studies they ranked the need for specific communication and

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planning skills high, but ranked the need for overall management training very low(Jones, 1977). Further, acceptable levels of performance in categories that includedmanagement competencies were lower than the levels of acceptable performance of theother categories (Jones, 1977).

Most Extension professionals see themselves as educators. They chose career paths thatwould not require them to manage the work of others. When Wolford (1999) studied theassimilation into the Extension organization of professionals who had been employedthree years or less, she reported new employees thought they would be teaching, butinstead are expected to coordinate the work of others. She also reported that new andexperienced agents resist the organization’s encouragement to secure soft fundingbecause they view additional program personnel as complications that take time andmake their work more difficult.

These comments are not without foundation. Extension professionals do not perceivemanagement competencies as being very important for their work or for the work of theirunit directors (Cooper & Graham, 2001). This conforms to Bandura’s (1986) theory thatthe importance people place on certain competencies associated with their roles,influences their likelihood of developing or maintaining those competencies, andinfluences the type of training they self-select. Ford & Noe (1987) noted that if peopledo not perceive a type of training as very important or that they need the training, theywill tend not to seek it. Perhaps, because county program professionals are not viewed asmanagers by the organization (Buford, Bedeian, & Lindner, 1995), they are rarelyencouraged by the organization to participate in management training that may be offeredexternally.

Subtle Management Needs

The need for Extension professionals to become managers can be subtle and slowlyovertake them as they expand their educational programs utilizing external funding.Professionals with these new responsibilities often first notice a disturbing incongruencebetween the real and familiar work they have been doing and the new unfamiliar workthat they must now start doing (Norton, 1997). Some people adjust to their newmanagerial responsibilities and easily blend them with their on-going duties. Most,however, struggle to minimally perform these managerial duties and often resent the newwork they must do. Employees with weak management competencies are more likely towaste the organization’s resources because they tend to spend their time on unimportantissues, often spending a lot of time doing the wrong things (Douglass, 1992; Mintzberg,1995). Even formally trained managers often flounder until they have had some first-hand experience as managers in a particular job (Whitehead, 1929).

Management Efficacy

How individuals meet the demands of specific situations relates to their self-efficacy orpersonal beliefs in their capabilities to do the required work at certain levels (Wood &

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Bandura, 1989). Self-efficacy is concerned with the perceptions and judgments of whatone can do with the skills one possesses rather than with the particular skills one has(Bandura, 1986; Wood & Bandura, 1989). Employees perform better when they believethey have the skills necessary to succeed (Barling & Beattie, 1983), and when they aremotivated (Gagne & Fleishman, 1959; Viteles, 1953). Also relevant is whether a personbelieves these abilities and strategies are inborn and fixed, or that needed abilities andstrategies can be acquired and improved through additional training and experience(Vroom, 1995; Wood & Bandura, 1989). Experts tend to believe that management skillscan be learned (Drucker, 1964; Van Fleet, 1991), and that managers are developed andnot just born (Drucker, 1974).

The Struggles Ahead

Ironically, Extension, like many other organizations, struggles to employ people who willsucceed as managers and agonizes to provide meaningful training for existing managers.This is because the knowledge and skills needed to be successful managers have not beenpart of the basis of developing the pool of interview candidates or the expertise of thosewho design a training program (Norton, 1998). When organizations fail to accuratelyanalyze a job that is changing, they may not realize how critically important strongmanagement competencies have become. Management competencies often will beomitted from a position description and the development of management competenciesrarely will be part of early employee training (Norton, 1998).

Recommendations

Organizations that encourage their professionals to build larger programs throughexternal funding must understand that performance expectations need to be clear anddiscernable people for people to perform effectively. When ambiguity exists between thework employees thought they would do and the work they are expected to do, theyperform poorly and tend to be dissatisfied with their employment (Bandura, 1986; Wood& Bandura, 1989). Role clarity increases perceived purposefulness of job behavior, andincreases job satisfaction (Organ and Greene, 1974). Employees, who believe theypossess the specific skills and knowledge needed to complete their work, tend to thinkmore positively about themselves and be more satisfied and their jobs (Rowe, 1996;Terrian, 1990; Vroom, 1962).

Effective managers are those managers who tend to do the right things in the right way atthe right times and operate in such a way that resources are not wasted (Drucker, 1964;Van Fleet, 1991). Managers are effective and more satisfied with their jobs when theydesire to be managers (Champion, 1993; Koontz, O’Donnell, & Weihrich, 1988), andwhen the duties and tasks of their job accurately match their competencies, whichcombines skills, knowledge, individual behaviors, and attitudes (Gael, 1983; Norton,1997).

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In conclusion, as Extension professionals begin to see themselves as program andresource managers, they will begin to give the same attention to developing the relatedskills and competencies that they have historically given to being effective teachers.These skills and competencies will include recognizing, accepting, and including thehuman resource and other costs of on-going and new programs.

References

Astroth, K. A. & Robbins, B. S. (1986). No time for modesty. Journal of Extension,24(1). Available: <http://www.joe.org/joe/1986spring/a6.html>

Bandura, A. (1986). Social foundations of thought and action. Englewood Cliffs, NJ:Prentice Hall.

Barling, J. & Beattie, R. (1983). Self-efficacy beliefs and sales performance. Journal ofOrganizational Behavior Management, 5(1).

Buford, J. A., Bedeian, A. G., & Lindner, J. R. (1995). Management in Extension.Columbus, OH: The Ohio State University.

Champion, D. P. (1993). Job-person congruence, satisfaction, and job motivatingpotential (competency). Unpublished PhD. Dissertation, California School ofProfessional Psychology - Berkeley/Alameda.

Cooper, A. W. & Graham, D. L. (2001). Competencies needed to be successful countyagents and county supervisors. Journal of Extension [On-line]. 36(6). Available:<http://www.joe.org/joe/2001october/comm1.html>

Douglass, L. M. (1992). The effective nurse: Leader and manager (4 th ed.) St. Louis, MO:Mosby Yearbook.

Drucker, P. F. (1964). Managing for Results: Economic Tasks and Risk-taking Decisions.New York: Harper & Row.

Drucker, P. (1974) Management: tasks, responsibilities, practices. New York: Harper &Row.

Ford, J. K., & Noe, R. A. (1987). Self-assessed training needs: The effects of attitudestoward training, managerial level, and function. Personnel Psychology, 40(1). 39-53.

Gonzalez, I. M. (1982). The professional competencies needed by Extension Serviceagents in the Pennsylvania Cooperative Extension Service. Pennsylvania StateUniversity: University Park:

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Gagné, R. M., & Fleishman, E. A. (1959). Psychology and human performance: Anintroduction to psychology. New York: Holt.

Healy, P. (1997). Extension services weigh pros and cons of charging fees to users. TheChronicle of Higher Education. 44(10). A38-A39.

Holzer, M. (1995). The public productivity challenge. In A. Halachmi & G. Bouckaert(Eds.), The enduring challenges in public management: Surviving and excelling in achanging world. (pp 413-448). San Francisco: Jossey-Bass.

Jackson, D. G. & Johnson, L. (1999). When to look a gift horse in the mouth. Journal ofExtension,37(4). Available: <http://www.joe.org/joe/1999august/comm2.html>

Jones, J. W. (1977). A study of the congruency of competencies and criterion-referencedmeasures. Unpublished Master’s Thesis, Mississippi State University.

Koontz, H., O'Donnell, C., & Weihrich, H. (1988). Management, (9th ed.) New York:McGraw-Hill.

Leidheiser, P. C. (1970) . An evaluation of supervisory task importance and performancein the Ohio Cooperative Extension Service. Unpublished doctoral dissertation, The OhioState University, Columbus.

McCormick, R. W. (1959). An analysis of training needs of county Extension agents inOhio. Unpublished doctoral dissertation, University of Wisconsin, Madison.

Mintzberg, H., Quinn, J. B., & Voyer, J. (1995). The strategy process. Englewood Cliffs,NJ: Prentice-Hall.

Norton, R. E. (1997). DACUM Handbook. (2nd ed.) Columbus OH: The Ohio StateUniversity, College of Education, Center of Education and Training for Employment.

Norton, R. E. (1998). Quality Instruction for the High Performance Workplace:DACUM. Columbus OH: The Ohio State University, College of Education, Center ofEducation and Training for Employment.

Organ, D. W., & Greene, C. N. (1974). The perceived purposefulness of job behavior -antecedents and consequences. Academy of Management Journal.17(1), 69-78.

Price, R. K. (1960). An analysis of education needs of Arkansas Extension agents.Unpublished doctoral dissertation, University of Wisconsin, Madison.

Stiehl, R. E., Bessey, B. A., & Schmall, V. L. (1992). On the hunt for “fiscal fuel.”Journal of Extension.30(4). Available: <http://www.joe.org/joe/1992winter/a3.html>

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Soobitsky, J. R. (1971). Perceived training needs of urban Cooperative Extension agentsworking with disadvantaged audiences. Doctoral dissertation). The Ohio State University,Columbus.

Van Fleet, D. D. (1991). Contemporary management. Boston: Houghton Mifflin Co.

Viteles, M.. S. (1953). Motivation and morale in industry. New York, Norton.

Vroom, V. H. (1962). Ego-involvement, job satisfaction, and job performance. PersonnelPsychology, 15, 159-177.

Whitehead, A. N. (1929). The aims of education and other essays. New York: NewAmerican Library

Wolford, G. H. (1998) Level of assimilation of newcomers to Ohio State Universityextension. Unpublished Dissertation in College of Food, Agricultural, andEnvironmental Sciences, Ohio State University, Columbus.

Wood, R. & Bandura, A. (1989). Social cognitive theory of organizational managementAcademy of Management. The Academy of Management Review.14(3), 361-384.

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Competitive Advantage Through Human Resources:Employer Of Choice Programs

Janet A. LenaghanZarb School of Business, Hofstra University

Alan B. EisnerLubin School of Business, Pace University

Abstract

Employer of Choice (EOC) programs are designed to aid an organization inoutperforming its competition in the recruitment and retention of top talent inorder to secure an exceptional workforce. Little research, however, has been doneto ascertain the impact, if any, on profitability due to an organization achievingEOC status. The assumption is that such a strategy will yield a competitiveadvantage for the organization, but this assertion has not been subjected to therigors of academic scrutiny. This paper discusses the issues surrounding EOC asa strategy and presents, based on existing theory, empirically testablepropositions.

Keywords: Competitive advantage, Work-Life Programs, Human Resource Management

Employer of Choice (EOC) programs are designed to aid an organization inoutperforming its competition in the recruitment and retention of top talent. This enablesthe organization to secure an exceptional workforce. It is also important to note that“top” in this definition does not refer to the place in the organization chart or structure,rather it is indicative of the best employee - - the top performer for each position in theorganization.

An Employer-of-Choice is basically a self-proclaimed achievement. Although in order tohave credibility in the proclamation, it helps to be named to one of the popular press listsof “best companies to work for.” According to Fortune Magazine’s annual list of the bestcompanies to work, companies on the list yield higher returns for shareholders(Shellenbarger, 1998). The rationale for the EOC strategy can be traced to the efficiencywage theory whereby an employer’s compensation strategy is to compensate, either viawages or benefits, above the market in order to serve as a productivity motivator. Theincreased productivity results from an increase in the retention of top talent, improvedefficiencies in current employees and high overall retention rates. (Campbell, 1993;Cappelli & Chauvin, 1991; Sullivan, 1998).

The demand for “top” labor is outpacing the available supply, thus creating critical laborand skill shortages in virtually all industries requiring specialized core competencieswithin the workforce. The recent changes in the unemployment rate will not resolve theshortage of the “knowledge and technical” workers. It is not uncommon for many

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organizations to simultaneously reduce staff while hiring new talent, resulting in asignificant human resource challenge in terms of its effect on employee morale. TheBureau of Labor Statistics projects that over the 2000-2010 period, total employment isprojected to increase by 15 percent (BLS, 2001). In fact, many organizations haveincorporated recruitment and retention goals into their written strategic plans (Ahlrichs,2000) as a defense against these environmental concerns.

Organizations had to respond to an increased demand by employees for “needsatisfaction.” Employers began offering new and more individually tailored benefitpackages. On-site child-care centers, exercise rooms, and cafeteria style benefit packagessurfaced as a benchmark for top benefit plans. Even concierge service and on-site drycleaners have become a standard in many large organizations. In a recent poll reported inRisk Management, over one quarter of the respondents cited work-life balance as their‘number one career dilemma in the new millennium’ (Sullivan, 1999, p.8). Recentevidence further suggests that ‘even employees with no direct benefit may place apositive value on work-life programs…’ (Drago et al 2001, p. 36). Anderson and Pulichposit that employees want some recognition from management that family and personaltime is important (2000).

Resource Perspective

Since human resources represent the knowledge, skills, abilities and competencies of theoverall workforce, this mosaic of talent becomes what Barney (1991) describes as aresource that is relatively rare and difficult to imitate. A firm’s human resources can beused as predictors of firm performance (Hitt & Ireland 1986 and Barney 1991).Organizations that possess a resource that others are not able to easily duplicate areknown as benefiting from a sustained competitive advantage. Thus we argue that one ofthe underpinnings of Employer-of-Choice strategy lies in resource-based strategy. Onecan look at Southwest Airlines, a leader on Fortune magazine’s list of the best companiesto work for and realize that their business model is simple - -Tom Peters characterized it‘as one that any 3 year old can understand’ (Myerson 1997, p. 38) - -and yet others havefailed to imitate it (O’Reilly & Pfeffer 2000) due to the competitive advantage it has in itshuman resources.

Positive reputations can be a source of competitive advantage. The EOC status is anattempt to enhance a member firm’s reputation as one that values its employees. A veryrecent series of commercials promoting Continental Airlines demonstrates that one oftheir main marketing goals is to enhance the Airline’s employment brand bycommunicating its achievement in being named to Fortune’s list of Top Companies towork for. It seems Continental’s strategic architecture highlights that possessing EOCstatus is a core competence and as such will provide a sustained competitive advantage.If you view the organization as a “portfolio of skills” the rationale for Continental’sstrategy becomes intuitive (Prahalad & Hamel, 1990). Indeed human capital is asignificant competitive resource (Lawson & Hepp 2001).

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Human Resources

Based on the above, it would seem that those organizations with EOC status should havea competitive advantage. In fact, those organizations that are proactive and recognize theimportance of securing qualified labor will experience higher productivity (Koch andMcGrath, 1996). The “potential gains” for organizations lie in the effective utilization ofstrategic human resource management (Huselid et al 1997). However, the literature doesnot specify which resources are most useful. Champion-Hughes (2001) suggests that thestruggle to deal with work-family issues on a daily basis and stay focused on the jobultimately will diminish an employee’s efficiency. By helping employees balance workand family responsibilities, organizations will turn the employee into a valuableorganizational citizen, whose behavior will influence profitability and customersatisfaction (Koys, 2001). In fact, Susan Lambert (2000) developed a model to measureworkers’ assessments of the usefulness of work-life benefits and the measures oforganization citizenship and concluded that a positive relationship exists between thesevariables.

Studies have shown that work-life policies do positively affect firm performance,however, they have been examined through the use of bundles (Perry-Smith & Blum,2000), or a grouping such as high performance work practices (Huselid, 1995), orprogressive human resource management practices (Delaney & Huselid, 1996), or inpublic-sector employers (Kim & Campagna, 1981). Yet, there is some evidence tosuggest that perhaps the beneficial effects on employee satisfaction with work-familybalance and job satisfaction vary widely across different groups of employees (Saltzstein,et al, 2001). It is noteworthy to mention that a recent empirical study attempted to assessindividual work-life programs and their impact on profitability and concluded that not allprograms exert the same, or even a positive, impact on profits (Meyer et al, 2001).

Institutional Theory

The issue is whether the stated advantages of becoming an employer-of-choice arereality-based or myths. Is the concept of EOC more a norm of rationality? Institutionaltheory is based on the notion that formal structure is ingrained in social reality. Thesocial reality determines elements of the formal structure such that these elements aremerely manifestations of powerful institutional rules which function as rationalizedmyths that are binding on organizations (Meyer & Rowan, 1977). Organizationsstructurally reflect or imitate socially constructed values. Perhaps this can explain themotivation of employers to enrich benefit offerings that are required for EOC lists. Inother words, conceivably the “competitive advantage” that proponents of these benefitofferings espouse is merely isomorphism (Meyer & Rowan, 1977).

It certainly can be argued that if an employer does not offer certain benefits, thatemployer would forfeit recruitment effectiveness. The “top talent” would seekemployment elsewhere. However, not all benefits can have the same value-added to the

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employment relationship. In other words, the enhancement of benefits could be a resultof mimetic isomorphism (DiMaggio & Powell, 1983). Employers may be simplyresponding in an effort to maintain legitimacy by offering benefits. They can be part andparcel of the formalized structure - - thus employees will take them for granted incontemporary organizations (Fogarty & Dirsmith, 2001). If the organization just offersthe benefits to increase its reputation as EOC, then the value to employees isquestionable. For example, research has found that often men and non-professionalscannot take advantage of work-life programs for fear of job ramifications (Konrad &Mangel, 2001). Therefore, the mere existence of these enriched plans would not result ina competitive advantage.

Propositions

An interesting aspect of the EOC strategy is the notion that to some extent employeesexpect certain benefits and, as such, their presence in the benefits package does not serveas a motivator to recruit or retain an exceptional workforce. It is conceivable that as aresult of coercive isomorphism certain benefits are not only expected, but also demanded,by workers as part of their notion of base salary such that they no longer serve asmotivators for attracting and retaining top talent. Thus, employees would identify somecore benefits associated with an EOC program as obvious to a basic compensationpackage and, therefore, it is only the absence of such benefits that would incite anybehavior.

Proposition 1: The absence of an EOC benefits program will be negatively associatedwith an individual’s desire to become employed or remain employed by a specificemployer.

Based on the widely accepted belief that Employer-of-Choice status yields higherqualified applicants, and the assumption that if an organization invests in an EOCstrategy that employer emphasizes strategic human resource management, and as a result,will receive positive gains, organizations that achieve Employer-of-Choice status shouldreceive greater numbers of applications per job opening (Huselid et al 1997). Moreover,if EOC is truly a strategy which will yield a competitive advantage through positivereputation (Barney, 1991), then future employees should recognize and express a desireto work for such organizations.

Proposition 2: An EOC program ranking will be positively associated with the numberof applicants per job opening versus non-EOC competitors controlling for recruitmentexpenditures.

Proposition 3: EOC program ranking will be positively associated with applicantrecognition and motivation to apply for a position at that organization.

Porter (1985) asserts that effective human resource management policies and practicescan make a significant contribution to the firm’s competitive advantage because they

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provide the mechanisms to recruit and retain top talent. The assumption is thatEmployers of Choice offer exceptional benefits and, therefore, since it has been shownthat perceptions of organizational culture influence turnover (Sheridan, 1992), as well asemployees’ financial and psychological interests (Shaw et al, 1998), organizations thathave achieved EOC recognition should benefit from lower turnover than that of theircompetitors.

Proposition 4: EOC program ranking will be negatively associated with the turnoverrates.

Proposition 5: EOC program ranked competitors will have lower turnover rates thancompetitors without EOC programs.

It can be argued that the mere possession of top talent by an organization results in higherprofitability. Therefore, organizations employing a strategy designed to achieve a rankedEOC program should be more profitable than other competitors in their industry.Moreover, there is evidence that supports a strong link between a decrease in employeeturnover and increase in sales, market value and profitability (Huselid, 1995). Therefore,assuming propositions 4 and 5 hold true, then an obvious extension is that EOCs will bemore profitable.

Proposition 7: EOC program ranking will be positively associated with profitability.

Conclusion

This area of research is ripe with opportunities to decipher the concept of employer-of-choice as a strategy for increasing competitive advantage. While the popular press hasmade significant claims to its advantages - they are only assumptions. It is imperativethat these supposed competitive advantages be subjected to the rigor of academicresearch. Implications for organizations are considerable as any mechanism to alter anorganization’s competitive advantage relies on a significant allocation of resources.

References

Ahlrichs, N. S. (2000). Competing For Talent: Key recruitment and retention strategiesfor becoming an employer of choice. California: Davies-Black Publishing.

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Champion-Hughes, R. (2001). Totally Integrated Benefits, Public PersonnelManagement, 30:3, 287-302.

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Hitt, M. and D. Ireland (1986). Relationships Among Corporate Level DistinctiveCompetencies, Diversification, Strategy, Corporate Structure and Performance. Journalof Management Studies, 23:4, 401-416.

Huselid, M. A. (1995). The Impact of Human Resource Management Practices onTurnover, Productivity and Corporate Performance. Academy of Management Journal,38:3, 635-672.

Huselid, M. A. , S. E. Jackson and R. S. Schuler (1997). Technical and Strategic HumanResource Management effectiveness as Determinants of firm performance. Academy ofManagement Journal, 40-1, 171-188.

Kim, J. and A. Campagna (1981). Effects of Flexitime on Employee Attendance andPerformance: A Field Experiment. Academy of Management Journal, 24:4, 719-742.

Koch, M. J. and R. Gunther McGrath (1996). Improving Labor Productivity: HumanResource Management Polices Do Matter. Strategic Management Journal, 17, 335-354.

Konrad, A. M. and R. Mangel (2000). The Impact of Work-life Programs on FirmProductivity. Strategic Management Journal, 21, 1225-1237.

Koy, D. (2001). The Effects of Employee Satisfaction, Organizational CitizenshipBehavior, and Turnover on Organizational Effectiveness: A Unit-Level, LongitudinalStudy, Personnel Psychology, 54, 101-114.

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Lawson, T.E. and R. Hepp (2001). Measuring the Performance Impact of HumanResource Initiatives. Human Resource Planning, 24:2, 36-44.

Meyer, J.W. and B. Rowan (1977). Institutionalized organizations: formal structure asmyth and ceremony. American Journal of Sociology, 83: 340-363.

Myerson, A.R. Air Herb, New York Times Magazine, 9 November 1997, 38.

O’reilly C.A. And J. Pfeffer (2000). Hidden Value Boston, Harvard Business SchoolPress.

Perry-Smith, J. E. And T. C. Blum (2000). Work-Life Human Resource Bundles AndPerceived Organizational Performance. Academy Of Management Journal, 43-6, 1107-1117.

Porter, M. E. (1985). Competitive Advantage. New York: Free Press. Prahalad, C. K., and G. Hamel (1990). The core competence of the organization.Harvard Business Review, 68(3), 79-93.

Saltzstein, A., Y. Ting and G. Saltzstein (2001). Work-Life Balance and JobSatisfaction: the Impact of Family Friendly Policies on Attitudes of Federal GovernmentEmployees, Public Administration Review, 61:4, 452-467.

Shaw, J.D., J.E. Delery, G.D. Jenskins and n. Gupta (1998). An Organization-LevelAnalysis of Voluntary and Involuntary Turnover, Academy of Management Journal,41:5, 511-525. Shellenbarger, S. (1998). Those Lists Ranking the Best Places to Work for are rising inInfluence. Wall Street Journal, New York , August 26, 1998.

Sheridan, J.E, (1992). Organizational Culture and Employee Retention. Academy ofManagement Journal, 35, 1036-1056.

Siegwarth-Meyer, C. and S. Mukerjee, A. Sestero (2001). Work-Family Benefits;Which Ones Maximize Profits? Journal of Managerial Issues, 13-1, 28-44.

Sullivan, L. (1999). Making time for family. Risk Management, 6:46, 8.

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Fanning the Flames of Controversy: Rethinking Wrongful Discharge

Jeffrey A. MelloDepartment of Management, College of Business and Economics, Towson University

Job security has become a paramount concern among employees in a slowing economyas the mass layoffs, corporate reorganizations and bankruptcies that have taken placeover the past few years have resulted in a significant job loss. Fueling these job securityconcerns is the fact that employees in the United States receive very little protectionagainst arbitrary or unjust dismissal from their jobs, unlike employees in many otherindustrialized countries. The majority of United States employees are employed at will,under the doctrine of employment-at-will, which has provided oversight of theemployment relationship in the United States since the Industrial Revolution.2

Employment-at-will has its origins in British common law and suggests that theemployment relationship consist of a simple agreement between the employee andemployer, as free agents, that could be terminated by either party at any time for any oreven no reason. It was first enforced in the courts in the United States in 1884 in Paynev. Western & Atl. R.R.3. Here the court ruled that A[employers] must be left withoutinterference to buy and sell where they please and to discharge or retain employees atwill for good cause or for no cause, or even for bad causes without thereby being guiltyof an unlawful act per se. It is a right which an employee may exercise in the same way,to the same extent, for the same cause or want of cause as the employer.

The basic assumptions behind employment-at-will are that employees and employershave equal bargaining power in dealing with each other and that government intrusioninto the activities of such free agents is unnecessary and unwelcome. The doctrine wasfollowed closely from its initial inception at the time of the Industrial Revolution wellinto the mid-twentieth century.4 Until this time, the only exception to employment-at-will was any situation in which a contract or agreement had been signed between theemployer and employee which specified that employment was to be for a certainduration, either definite or indefinite. In addition, the National Labor Relations Act of19355 allows employees to bargain collectively with their employers and most collective

2 For a discussion of the history and development of employment-at-will seeDeborah J. Ballam, Exploding the Original Myth Regarding Employment at Will: TheTrue Origins of the Doctrine, 17 BERKELY J. EMP. 7 LAB.L. 91 (1996) and JayFeinman, The Development of the Employment At Will Rule Revisited, 23 ARIZ. L. J. 733(1991).

3 81 Tenn. 507, 518-20 (1884)

4 See Deborah J. Ballam, Employment-at-will: The Impending Death of ADoctrine, 37 AM. BUS. L. J. 653, AT 654.

5 29 U.S.C. Sect. 151

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bargaining agreements that result from this process outline the terms and conditions ofemployee job security, including the duration of employment, as well as procedures forprogressive employee discipline and subsequent termination.

During the 1960s American society experienced movements that sough to establish andaffirm the rights of women and racial and ethnic minorities. Individuals began to demand,and subsequently receive from the federal government, rights and liberties that pertainedto a variety of areas of their lives. As a result, the law started to impose increasingrequirements on institutions, including employers, that protected individuals from harmcreated by the actions of those who held positions of power. Most notable were a seriesof laws that prohibited discrimination in employment based on factors such as sex, race,religion, national origin, age and physical ability.6 These statutes prohibited employersfrom discharging, any employee based on the employee's status as a member of aprotected class.

These laws were, in part, in response to the realization that the employee / employerrelationship was not as assumed by those who originally postulated employment-at-will.Rather than seeing the two parties as being equal in power, resources and bargainingability, legislators began to believe that employers often have significant economic andpolitical advantages in their negotiation relationships with their current and prospectiveemployees.7 The dependence of individuals on their employment and correspondingwages for their own economic livelihood and psychological well-being, as well as for thatof their families, seemed to far exceed the dependence of an employer on any individualemployee. This is particularly true for lower-level employees with limited marketableskills, for whom replacements could easily be found.

Indeed it was argued, for most individuals the terms of the employment contract areimposed on a take-it or leave-it basis by the employer....The seriousness of theemployee's inability to protect himself....is compounded by the importance ofemployment......This dependence is not exclusively economic. Within the employmentrelationship, the employee seeks fulfillment of many of his needs for social status andidentity.8

6 See Civil Rights Act of 1964 42 U.S.C. Sect. 2000; Age Discrimination In

Employment Act of 1967, 29 U.S.C. Sect. 626; Vocational Rehabilitation Act of 1973,P.L. No. 93-122, 87 Stat 355 (1973), as amended 92 Stat 2984 (1978)

7 See Charles J. Muhl, The Employment-at-will Doctrine: Three MajorExceptions, 124 Monthly Labor Review, Jan. 2001, 3-11.

8 Daniel A. Mathews, Note, A Common Law Action for the Abusively Discharged,26 HASTINGS L. J. 1435, 1444 (1975).

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Reconsidering employment-at-will

As a result of these perceived imbalances and inequities, some courts and legislaturesbegan to question the ongoing viability of employment-at-will. Starting in the 1960svarious federal and state statutes were passed that prevented employers from terminatingor mistreating employees for personal factors, such as age, religion, race, nationaloriginal, sex and physical ability, that had nothing to do with their ability to do a job orfor their performance on the job.9 The court system also provided protection toemployees against unjust dismissal under contract law, either through collectivebargaining agreements or individually-negotiated contracts with employers. Some courtsalso acknowledged implied contracts through statements in employee handbooks and/orstatements made during job interviews that suggested that employment was not simply atwill. The leading case in this domain is Toussaint v. Blue Cross & Blue Shield ofMichigan10 in which the court found that the terms of the employee handbook created animplied contract with employees that undermined the defense of employment-at-will intermination decisions.11 However, the Supreme Court of Pennsylvania refused torecognize the implied contract exception in Richardson v. Charles Cole MemorialHospital12 because the terms of the employee handbook were not bargained for byemployees, rendering them as mere gratuities rather than rights.13 However, sinceRichardson, implied contract claims have been greatly minimized as employers havebeen more foresightful by removing any language that may be interpreted as promissoryfrom handbooks, training interviewers on appropriate language, and/or stating inhandbooks or specifically having employees sign statements that acknowledge thatemployment is expressly at will.

In 1959, the California Court of Appeals rendered a verdict that has prompted othercourts and legislatures to consider another viable exception to employment-at-will. In thecase of Petermann v. International Brotherhood of Teamsters Local 396,14 a businessagent for a labor union was terminated by his employer for refusing to lie under oathduring an investigation of union corruption.15 Petermann sued his employer, arguing thathis termination should be declared unlawful because it was in direct response to his

9 See supra note 5.

10 408 Mich. 579, 292 N.W.2d 880 (1980).

11 Id., at 644.

12 320 Pa.. Super. 106, 466 A.2d 1084 (1983).

13 Id., at 1085.

14174 Cal. App.2d 184 (1959).

15 Id.

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refusal to commit an illegal act. The employer defended the charge by arguing thatPetermann was employed at-will and hence failed to state a claim. The court, however,held that Petermann's dismissal was in violation of public policy and in doing so, createda third exception to employment-at-will; wrongful discharge, often referred to as thepublic policy exception to employment-at-will. The court found that while there was noprecise definition of public policy, there should be some legal protection offered toindividuals who helped disclose acts that had a tendency to be injurious to the public oragainst the public good.16

As groundbreaking as it was, this decision did not have an immediate significant impactas other courts were not quick to adopt its reasoning of the Petermann court. However,in 1967, Professor Lawrence Blades published a seminal law review article that called fornew law that addressed what he called abusive discharge.17 Blades noted thatemployees have total dependence on their employers and that this dependency resulted ina power imbalance.18 He called for legal reform that would neutralize this powerimbalance and protect employees from unjust discharge, particularly in situations wherethe employee had engaged in some action that was in the public's best interest.19 Bladesfurther found it unacceptable to allow employers to exercise control over employees,through the threat of termination, for elements of the employee's life that were irrelevantto the employment relationship and job performance.20

While Blades theses were well-received ideologically, courts struggled with the practicalsubjectiveness of public policy. Certain courts found that a public policy violation couldonly be found if a said policy was expressly enunciated in a State constitution or statute.Other courts did not require such codification, holding that a violation could be inferredfrom any state statute. Still other courts refused to recognize any public policy exceptionto employment-at-will, finding that such exceptions needed to be created by legislativerather than judicial, action.21

16 Id., at 188.

17 Lawrence E. Blades, Employment-At-Will vs. Individual Freedom: On Limitingthe Abusive Exercise of Employer Power, 67 COLUM. L. REV. 1404 (1967).

18 Id., citing Frank Tannenbaum, A PHILOSOPHY OF LABOR 9 (1951).

19 Id., at 1422.

20 Id., at 1406.

21 For a listing of the positions adopted by each of the fifty states in this area, seeMuhl, supra note 6.

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Currently, individual state courts have taken one of three positions on the viability ofwrongful discharge in violation of public policy as an exception to employment-at-will.First, eight states have rejected the concept outright. 22 Approximately twenty states haveadopted what has become known as the narrow approach to wrongful discharge.23 Herethe court requires a clear link to a specific state statute that expressly grants an employeethe right to do the action on which the termination was based. The remaining states haveadopted a more broad approach to wrongful discharge, requiring that the terminationundermine some state public policy that has been generally codified into law withoutrequiring a specific section of a statute that expressly governs a specific action.24 Underthis approach, judges are able to exercise a fair amount of judicial discretion. Forexample, the Vermont Supreme Court found that the absence of a statutory link does notpreclude a judge from creating his or her own definition of public policy in consideringwrongful discharge claims.25 During the 1990s courts in Connecticut, Maryland, Ohioand Washington all issued rulings that their respective legislature's exemption of smallbusinesses from antidiscrimination laws was intended only to relieve small business fromthe administrative burdens of compliance rather than to relieve them from theantidiscrimination provisions themselves.26

22 These states are Alabama, Florida, Georgia, Louisiana, Maine, Nebraska, New

York and Rhode Island.

23 See Muhl, supra note 21. Also, David J. Walsh & Joshua L. Schwarz, StateCommon Law Wrongful Discharge Doctrines: Up-Date, Refinement and Rationales, 33AM. BUS. L .J. 645, 678-89 (1996).

24 Id.

25 Payne v. Rosendaal, 520 A.2d 586 (Vt. 1986).

26 See Daley v. Aetna Life & Cas., 1994 WL 422642 (Conn. Super. Ct. Aug.3,1994) (holding that state's legislated protections for pregnant workers evidence a publicpolicy not to discriminate against women who choose to have and raise children);Kerrigan v. Magnum Entertainment, Inc., 804 F. Supp,. 733 (D. Md. 1992) (holding thatthe exemption of small business form pregnancy discrimination act did not preclude theapplication of state common law remedy for wrongful discharge in violation of publicpolicy); Molesworth v. Brandon, 672 A.2d 608 (Md. 1996) (holding that the exemptionof small businesses was meant to exclude them from the administrative process and,citing Kerrigan, not to give them a license to discriminate); Collins v. Rizkana, 652N.E.2d 653 (Ohio 1995) (holding that legislature's intent was to exempt small businessesfrom the burdens of administrative compliance, not from the antidiscrimination policy) ;Bennett v. Hardy, 784 P.2d 1258 (Wash. 1990 (holding that the legislature did not intendthat small companies could treat employees in a way that would offend the stateconstitution's privileges and immunities clause)

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Consequently, the majority of states do recognize some form of wrongful discharge inviolation of public policy as an exception to employment-at-will yet there is clearly a lackof consistency in how public policy is defined or conceptualized. Like many other facetsof law, more liberal courts are assuming great latitude in interpreting legal doctrines inways that they find to be in the public's best interests while more conservative courts areassuming a strict constructionist approach, requiring a very literal reading andinterpretation of existing laws and wholly deferring to the legislature in refusing to issueany new interpretations of law.

The inconsistencies surrounding both the viability and application of public policyexceptions to employment-at-will leave the doctrine as a very gray area of law. Becauseit involves a journey to unlegislated legal terrain, it is open to controversy, inconsistentinterpretations and a tremendous amount of judicial discretion. Even in states where thepublic policy exception has been commonly accepted and embraced by the courts, itsapplication can still be problematic. In Bammert v. Don's SuperValu, Inc.27 theWisconsin Court of Appeals had to decide whether an employee's dismissal was inviolation of a public policy. Karen Bammert had been terminated by her employer, DonWilliams, when Bammert's husband, a police officer, arrested Williams' wife for drivingunder the influence of alcohol. Bammert alleged that her employment was terminateddue to her husband fulfilling his legal obligation by assisting in the arrest of heremployer's wife. She argued that Wisconsin's public policy exception to the employment-at-will doctrine should be expanded to cover not only the employee upon whom anaffirmative legal obligation is imposed, but also that person's spouse.

While the court acknowledged the existence of employment-at-will as the general ruleregarding relations with employees in Wisconsin, it also noted that case law providedpublic policy exceptions to employment-at-will. In Brockmeyer v. Dun & Bradstreet28

the court had found that a wrongful discharge is actionable when the termination clearlycontravenes the public welfare and gravely violated paramount requirement of publicinterest.29 Further, in Hausman v. St. Croix Care Center,30 the court found that where thelaw imposes an affirmative obligation upon an employee and the employee fulfills thatobligation, termination for that reason violated public policy.31

Bammert argued that the precedent set in these cases should be expanded to include twoadditional public policies. Citing the fact that Wisconsin state law prohibits the operation

27 Wis. Ct. App. 00-2473 (June 12, 2001), 632 N.W.2d 124 (2001).

28 113 Wis. 2d 561, 335 N.W. 2d 834 (1983).

29 Id., at 573.

30 214 Wis. 2d 655, 571 N.W. 2d 393 (1997).

31 Id., at 669.

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of a motor vehicle while under the influence of an intoxicant or other drug, her husband,as a law enforcement officer, was under an affirmative obligation to identify and arrestanyone who posed a threat to public safety. She argued that society doesn't want our lawenforcement officers to take into account, when determining whether or not to make anarrest, whether the officer's spouse might be retaliated against as a result.32 Bammertfurther contended that Wisconsin law shows evidence of the public policy of promotingthe stability of marriage and family.

The court found that while Bammert was terminated for a morally wrong reason, she hadnot demonstrated that her case merited an exception to employment-at-will. There wasno precedent to extend the prohibition of adverse employment decisions against familymembers for the act of another family member and doing so would put the court in aprecarious position. If the court were to accept her argument, what would be the logicalstopping point? The court found that Bammert presented no evidence to demonstratewhy the public policy should only protect spouses and not, for example, parents orsiblings or other family members.

Rethinking employment-at-will

As appealing as the public policy exception to employment-at-will is to many legalscholars and practitioners, the Bammert case shows how problematic the doctrine can be.While Bammert's employer's conduct in terminating her was not, according to the court,unlawful, per se, it similarly was not lawful. It is easy to find fault with the court and itsdecision, which essentially validated the employer's behavior, yet, at the same time, itwould be easy to find fault with the court had it ruled in Bammert's favor. While it isclear that Bammert did not deserve to lose her job, the courts would be setting verydangerous precedent in ruling that her firing constituted a public policy violation. Apotential floodgate of litigation could be opened, much of which would undoubtedly befrivolous. However, the actual ruling of the court sets a precedent that would placeBammert's husband, or anyone else confronted with such a situation in the future, in acompromising position. His fiduciary, legal and ethical responsibilities to do his job andensure public safety would have to be balanced against the potential personalresponsibilities he has toward his family members. Either way, he would lose something,personally and/or professionally. Clearly, this is not the type of situation we would wantour public safety officers to confront on a regular basis.

The answer to whether the court made the right decision in this case is clearly subjectiveand subject to debate. While the court did have the freedom to interpret wrongfuldischarge more liberally than it did, such a decision might set a very dangerousprecedent. The decision it made punished Bammert, an innocent victim, as well as herhusband, albeit indirectly, who not only did his job but also acted in society's best

32 See supra note 26.

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interest. The court's decision also validates the employer's retaliatory behavior againstKaren Bammert as the employer suffered no adverse consequences.

The elasticity of the concept of wrongful discharge in violation of public policy can beseen in another recent case. In West Virginia, the state Supreme Court of Appeals held,in Feliciano v. 7 Eleven, Inc.,33 that the right of self-defense provides a foundation for awrongful discharge claim when an employee of a convenience store attempted to thwartan armed robbery in blatant violation of company policy.34 Despite the fact that theemployee's actions could have significantly injured other employees or customers, WestVirginia public policy allows individuals to exercise fully the right to self-defense.

Wrongful discharge has become the chief means, outside of specific civil rights charges,by which employees attempt to challenge employer termination decisions. Because itfalls under state rather than federal jurisdiction, there is tremendous variation in itsacceptance, application and enforcement. Moreso, in states where the doctrine has beenembraced, there remains some uneasiness about its enforcement.

While it is clear that unjustified retaliatory behaviors of employers are unethical, they arenot necessarily illegal, in and of themselves. While employees certainly deserveprotection from such treatment, particularly in light of the dependencies they have on theemployers and the power imbalance between employers and employees, wrongfuldischarge, as it now stands, is vague, ambiguous and random. The crap shoot nature ofthe doctrine invites frivolous and speculative litigation when no other means exist tosatisfy a disgruntled former employee. The lack of clarity surrounding its scope andapplicability simultaneously undermine wronged and deserving plaintiffs. The solutionwill not be easy but it is clear that, as a society, we can do a better job of safeguardingemployee rights while simultaneously preserving employer prerogatives to run theirbusiness as they see fit than we are doing with the current status of wrongful discharge.

33 559 S.E.2d 713 (W. Va. 2001).

34 Id., at 723-4.

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Transformational Leadership in Law Enforcement

Stephen A. MorrealeNova Southeastern University

Abstract

The intent of this research was to attempt an empirical evaluation in a lawenforcement setting, the relationship of perceived leader styles on employee jobsatisfaction and exertion of “extra effort.” The study looks at the application ofBass’ (1985) model of Transformational, Transactional and Laissez-FaireLeadership in the law enforcement arena. The research design was an ex-postfacto survey aimed at line officers and their supervisors in selected mid-sizedpolice agencies in New England. The design incorporated a random sample of465 line officers working for law enforcement agencies in New England. A totalof 177 surveys were utilized in this analysis, which represented a return rate of38%.

The research indicated strong support for transformational leadership styles in lawenforcement organizations. Sworn law enforcement officers who had managerspracticing a transformational leadership style were significantly more satisfiedwith their jobs and were willing to exert extra effort in performing their jobduties. Those who had a supervisor with a laissez-faire style of management weresignificantly less satisfied and therefore exerted less effort on the job.

Keywords: Law enforcement, public service, leadership, transformational leadership,MLQ.

Transformational Leadership in Law Enforcement

The law enforcement agency plays an integral role in communities across America. Themanagement and leadership of these organizations must identify the needs of thecommunity and provide direction and vision for the public service entities they manageand lead. Police leadership is at a crossroads. Agencies are in need of a fresh perspectiveon the delivery of services and the treatment of police personnel.

Research points to a direct relationship between successful organizations and itscommitment to management practice that treat people as assets. (Pfeffer and Viega,1999). In The New Effective Public Manager, Cohen & Eimicke (1995) contend thatmanagement is largely the art of influencing people.

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Purpose of the Research

The purpose of this research is to look for a relationship between certain leader styles andtheir impact on job satisfaction, perceived effectiveness, and “extra-effort” bysubordinate law enforcement officers. The information presented strives to assistagencies in determining the best approach to leading law enforcement agencies.

Scope of Study

The scope of this study is focused on the self-reported perception of leader styles bysubordinate sworn police officers. The research was aimed at sworn members of theNew England Community-Police Partnership (NECP2). The membership is drawn frompolice agencies within New England. Most of the officers who are drawn to membershipin this non-profit are serving in positions or assignments involving communityinteractions including DARE officers, school resource officers, community policingofficers, crime prevention officers and juvenile officers.

This study thus focuses on addressing the relationship between leader styles and theeffect on law enforcement officer’s job satisfaction, “extra effort” and perceived leadereffectiveness.

Leadership

Burns (1978) introduced the concepts of transactional and transformation leadership,expanding the range of leadership to be studied and applied. Subsequently, extensivework in the United States and abroad shows that the concept of considering a full rangeof leadership is a powerful predictor in promoting individual, team, organizational, andcommunity development and effectiveness.

According to the Center for Leadership Studies, transformational leaders:1) Set high standards of conduct and become a role model gaining trust, respect andconfidence from others; 2) Articulate the future desired state and a plan to achieve it; 3)Question the status quo and continuously innovate, even at the peak of success; 4)energize people to develop and achieve their full potential and performance (CLSMaterials, Binghamton University, 2001).

Full Range of Leadership

Avolio (1997) cites the full range of leadership model as the underlying constructs for theMLQ. This model describes that leaders utilize a wide group of different forms of leaderbehaviors. The range of behaviors start with transformational leader behaviors totransactional leader behaviors reaching to the lowest leader interaction of laissez-faireleader behavior (Avolio, 1997).

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Because of transformational influence, followers are motivated to do more than theyoriginally would and feel a greater degree of respect and trust for the leader. The“backbone” of this theory is that followers are more motivated to enhance theirperformance by transformational leadership rather than transactional leadership (Bass andAvolio, 1988 &1990).

Literature Review

Much literature over the past fifty years has been aimed at identifying and comparingbehaviors, traits, characteristics, and reactions of subordinates to those certain behaviorsin differing work environs. Little research has focused on this relationship within thelaw enforcement field.

Much of Bass’ research has focused on military leadership (Bass, 2000). While there aredistinct differences between the military and police organizational cultures and leadershipstyles, the similarities should be explored. According to Yammarino (1990), the militaryhas made significant changes in their leadership structure and styles over the past twentyyears. In the past, many police organizations were modeled after the American military,in structure, rank, discipline, communications and chain of command. While there maybe applicability of military models in policing, the climate has been changing.

Burns (1978) described managers as transactors and leaders as transformers. Burns feltthat transactional leaders influence followers based on contingent reward systems.However, he felt that a transformational leader recognizes follower needs therebyattempting to meet the follower’s higher needs to more fully engage that follower. Bass(1985) continued the work of Burns by focusing on the characteristics of atransformational leader. Bass (1990) contended that prior to Burns’ (1978) work ontransformational versus transactional leadership, the study focused on democratic,autocratic, or laissez-faire leadership. , identified four components, known as the 4 - I’sof Transformational Leadership: idealized influence, inspirational motivation, intellectualstimulation, individualized consideration (Bass and Avolio,1993 & Avolio, Waldman &Yammarino, 1991). Bass and Avolio point out that there is constant interplay betweenculture and leadership. Fisher (1994) feels that transformational leadership is the onlystyle supported by empirical data.

Transformational and Charismatic Leadership Theories

House’s Path-Goal Theory (1971) included the interaction between leadership behaviorsand situational characteristics to determine the leader’s effectiveness. House (1979)conducted further study in the area of charismatic leadership. His theory shows that theleader traits that are perceived as charismatic include having a strong need for power,high self-confidence, and strong convictions. According to House, behaviors that arecommon in charismatic leaders involve role modeling, creating impressions ofcompetence and accomplishment, clarification of ideological goals, expressing high

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expectations, and displaying confidence in follower’s ability to build their self-confidence.

Bass (1990) set forth below, as figure 1, the characteristic of two types of leaders,transformational leader and transactional leader.

Figure 1— Characteristics of Transformational and Transformational Leadership

Transformational LeaderCharisma: Provides vision and sense of mission, instills pride, gains respect and trust.Inspiration: Communicates high expectations, uses symbols to focus efforts, expressesimportant purposes in simple ways.Intellectual Stimulation: Promotes intelligence, rationality, and artful problem solving.Individualized Consideration: Gives personal attention, treats each employeeindividually, coaches, and advises.

Transactional LeaderContingent Reward: Contract exchange of rewards for effort, promises rewards for goodperformance, recognizes accomplishments.Management by Exception (active): Watches and searches for deviations from rules andstandards, takes corrective action.Management by Exception (passive): Intervenes only if standards are not met.Laissez-Faire: Abdicates responsibility, avoids making decisions.

Bass, Organizational Dynamics (1990)

Traditional Model of Policing

In many traditional law enforcement structures, police administrators feel they had all theanswers, and did not need the participation of line officers or interference of the generalcitizenry. They remained cloistered and insulated.

The traditional model of policing is structured as a top down, para-military organization.Oftentimes, the system is autocratic and closed. Police agencies historically havefeatured a centralized authority, hierarchical decision-making structure, a high degree ofdivision of labor and specialization with formalization and standardization.

Goldstein (1990, p. 27) noted:

The dominant form of policing today continues to view police officers asautomatons. Despite an awareness that they exercise broad discretion, they areheld to strict account in their daily work—for what they do and how they do it . . .Especially in procedural matters, they are required to adhere to detailedregulations. In large police agencies, rank and file police officers are often treatedimpersonally and kept in the dark regarding policy matters. Officers quickly

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learn, under these conditions, that the rewards go to those who conform toexpectation—that non-thinking compliance is valued.

Summary of Major Findings

This study supported that, finding that there is a strong positive relationship between thetransformational style of leadership of police supervisors and subordinate sworn lawenforcement officer’s willingness to exert extra effort, their job satisfaction, and theirperception of their manager’s effectiveness.

Since the findings of this research focus on the benefit of transformational leader styles,the definition of transformational leadership bears repeating. Transformationalleadership behaviors are influential in motivating and transforming followers to be moreaware of task outcomes, activate their highest order needs, and go beyond their own self-interest for the benefit of the organization. These favorable outcomes are generallyachieved because the transformational leader seeks to build commitment, empower, andelevate followers to the greatest degree possible. Because of transformational influence,followers are motivated to do more than they originally would, and feel a greater degreeof respect and trust for the leader. The “backbone” of this theory is based on the beliefthat followers are more motivated to enhance their performance by transformationalleadership rather than transactional leadership or laissez-faire leadership (Bass, 1988,Bass & Avolio, 1990 & 1990a).

The results showed correlations between transformational leadership scores and thedependent variables, extra effort, job satisfaction and management effectiveness, beingpositive way beyond the alpha < .05 required. Furthermore, t-tests between the meanscores of those law enforcement officers with managers showing a high degree oftransformational leadership and those with managers showing a low degree confirmedthat high transformational managers produced significantly higher scores on thedependent variables.

A strong, negative relationship was found between the laissez-faire style or non-leadership style and subordinate sworn law enforcement officer’s willingness to exertextra effort, their job satisfaction, and their perception of their manager’s effectiveness,which was confirmed by both correlation and t-test analyses.

According to survey results from the sworn officers involved in this study, over 53% ofthe leaders that were rated used predominantly transformational leader behaviors in thelaw enforcement agencies they work with, and the research findings herein indicate thattransformational leadership qualities of law enforcement mangers do have a relationshipto job satisfaction and do contribute to a subordinate line officers willingness to exertextra effort.

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Limitations of the Study

This research study focused on a finite number of police agencies from New England.Each of the six states was represented in the sample from various police agenciesconsisting of nearly 2,000 officers, to small agencies made up of 2 to 3 full-time officers.Because of the similarities in training and mission, it is believed that this researchdemonstrates a generalizability of the relationship between transformational leadershipstyles, job satisfaction, and exertion of extra effort.

Discussion

While there is a time and purpose for directive, authoritative behavior for lawenforcement managers, especially in times of crisis or emergency, the traditional,military, top-down approach does not appear to be as effective with knowledge workers.As the demands and expectations of police officers and deputy sheriffs increase, and thequalification requirements consistently are raised, this research emphasizes thetransformational leadership style as having the best potential to improve satisfaction,encourage extra effort, and produce leader effectiveness. There are evident lessons inthe data for law enforcement administrators, and training executives to use leadershiptraits that engender trust and creativity, and that challenge employees to reach a higherlevel of performance and job satisfaction.

Recommendation for Future Research

The results of the investigation point to a number of other opportunities for furtherresearch. There is opportunity to conduct a similar study focused on law enforcementmanagers in specific, individual New England policing agencies or aimed at a group ofsimilar sized agencies. There is also opportunity to conduct a longitudinal study aimed atNew England law enforcement agencies to identify those actions by managers that lead toimproved performance, exertion of extra effort, and job satisfaction.

Conclusion

There are opportunities for leaders to enhance the effectiveness, reputation, andresponsiveness of law enforcement agencies, and allow for more open dialogue betweenthe traditionally cloistered police agency and the community it is charged to serve. Thisleadership approach will be accomplished efficaciously with the introduction oftransformational leadership into the organization.

References

Avolio, B. J., Waldman, D. A. & Yammarino, F. J., (1991) The four I’s ofTransformational leadership, Journal of European Industrial Training.

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Avolio, B. J., (1997) The great leadership migration to a full range leadershipdevelopment system, Kellogg Leadership Studies Project: Transformational Leadership,Working Papers, Academy of Leadership Press, College Park, MD.

Bass, B., (1985, Winter) Leadership: Good, better, best. Organizational Dynamics.

Bass, B. M., (1988) Charismatic leadership: The elusive factor in organizationaleffectiveness-Evolving perspectives on charismatic leadership, Jossey-Bass Publishers.

Bass, B., (1990, Winter) From transactional to transformational leadership: Learning toshare the vision, Organizational Dynamics.

Bass, B., (1990) Handbook of leadership, 3rd edition, New York: The Free Press.

Bass, B. M., & Avolio, B. J. (1990) The implications of transactional andtransformational leadership for individuals, teams and organizational development, JAIPress.

Bass, B. M. & Avolio, B. J. (1990a) Training and development of transformationalleadership: Looking to 1992 & beyond, Journal of European Industrial Training.

Bass, B. M. & Avolio, B. J., (1994) Improving organizational effectiveness throughtransformational leadership, Thousand Oaks, CA: Sage Publications.

Bass, B. M. and Avolio, B. J., (1997) Full range leadership development, Manual forMultifactor Leadership Questionnaire, Mind Garden Inc., San Francisco.

Bass, B. M. & Avolio, B. J., (1995, 2000) Technical report for the multifactor leadershipquestionnaire, Mind Garden Inc., San Francisco.

Bass, B. M. & Avolio, B. J., (2000) Platoon readiness as a function of leadership, platoonand company cultures, Center for Leadership Studies, Binghamton University.

Burns, J. M., (1978) Leadership, Harper and Row, New York.Cohen, S. & Eimicke, W, (1995) The new effective public manager: Achieving successin a changing government, Jossey-Bass Publishers.

Fisher, J. L., (1994) Reflections of transformational leadership, Educational Record.Goldstein, H., (1990) Problem-oriented policing, McGraw Hill Inc., New York.

House, R., (1971, September) A path-goal theory of leadership effectiveness,Administrative Science Quarterly.

House, R. & Baetz, J., (1979) Leadership: Some empirical generalizations and newresearch directions. In P.W. Todor, R., Yammarino, F., Spangler, W. D. & Bass, B. M.

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(1993) Transformational leadership and performance: A longitudinal investigation,Leadership Quarterly.

Pfeffer, Jeffrey & Viega, J.F., (1999) Putting people first for organizational success,Academy of Management Executive.

Yammarino, F. J. & Bass, B. M., (1990) Transformational leadership and multi-levelanalysis, Human Relations.

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Work Teams: Perceptions of a Ready-Made Support System?

Melissa A. Parris,School of Management, College of Law and Business, University of Western Sydney

Abstract

Much research on work teams has been focused at the team-level, consideringsuch issues as effectiveness, productivity and overall interaction. Usingqualitative in-depth interviews, the author has asked the question: what is theexperience of the individual working within a team? This paper discusses onetheme to have emerged, that of perceived emotional support being providedwithin the team. Respondents’ descriptions of emotional support are discussed interms of acceptance and respect, and of caring. The discussion shows how theprovision of this support has implications for how individuals view teams ingeneral, and indicates areas for future research.

Keywords: Individual experience, Perception, Support, Teams.

Introduction: The individual within a work team

The last twenty years have seen an increasing movement towards the use of teamsin organisations (Guzzo 1996; Morgeson et al 1997). This is commonly viewedas being driven by intensified competition, which requires flexibility andresponsiveness within organisations (Buchanan 1994, cited in Lloyd and Newell2000). Teams are seen as a way to gain commitment of organisational membersto this new working environment (Tjosvold 1991).

At the same time, there has been increased research focus on work teams. Building onthe previous research into group behaviour and the potential benefits of groupinvolvement, recent research has focused on the operation of these groups within theworkplace (Jackson and Ruderman, 1995). Much of this research is concentrated on howthe team performs as a unit, looking at various aspects of team functioning such aseffectiveness (eg. Fortune 1999), productivity (eg. Hallam & Campbell 1997) and overallinteraction (eg. Hartley 1996). Consideration of individual team members predominantlyfocuses on such issues as motivation and job satisfaction, both of which have beenextensively researched within organisations (eg. Maslow 1954; Herzberg et al 1959;McGregor 1960; Alderfer 1969). Much of this knowledge is repeated in the literature onteams, suggesting that a “motivated individual” will work to increase team effectiveness(eg. Stott & Walker 1995; Blair & Meadows 1999).

Little research has focused on the individual’s experience within a work team. Beyondthe measurement of motivation and job satisfaction, there is a need to understand howworking within a work team impacts the individual. This limitation in the literature led to

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the author’s current research project, asking the question “what is the experience of theindividual working within a team”? One theme to have emerged, that of perceivedemotional support, will be discussed in this paper.

Methodology & Method: Drawing on Heideggerian phenomenology

The qualitative methodology used for this study was that of Heideggerianphenomenology. This choice of methodology follows from the research question, withphenomenology seeking to ‘illuminate the richness of individual experience’ (Baker et al1992, p.1358). It is ontological, with its concern for the nature and relations of being(Cohen & Omery 1994; Walters 1994), and interpretive, with its emphasis on ‘thesituatedness of human reality in the world’ (Stewart & Mickunas 1990, p. 70).Understanding comes from the descriptions respondents give of their experiences, and in-depth interviews were conducted to ‘listen to what people themselves tell about theirlived world [and] hear them express their views and opinions in their own words’ (Kvale1999, p.1).

Theoretical sampling was used in the selection of respondents, with the focus not beingthe number of ‘cases’ studied, but the potential of each ‘case’ to assist the researcher indeveloping insights into their area of study (Glaser & Strauss 1967, cited in Taylor &Bogdan 1984). In total, eight respondents participated in the research study. Theserespondents have been given pseudonyms in the following discussion.

In selecting potential respondents, the criterion used was that they were currentlyworking, or had worked within the past twelve months, within a team in the workplace.For this research project, the following definition from Hackman (1990) was used,outlining three attributes of organisational work teams:

1) They are real, that is, they are intact social systems complete withboundaries, interdependence among members and differentiated memberroles.

2) They have one or more tasks to perform, that is, there is some outcomefor which members have collective responsibility and whose acceptabilityis potentially assessable.

3) They operate in an organisational context. (p.4, paraphrased)

Discussion – Emotional Support

The construct of social support has been widely researched, investigating the connectionbetween interpersonal relationships and individuals’ health and well-being (Kelly et al1999). This research is ongoing, considering the role and mediating affects of thissupport in many facets of our lives such as aging (eg. Resnick et al, 2002), family life(eg. Graham et al, 2000) and illness recovery (eg. Lugton, 1997), to name but a few.Interest in the impact of social support in the workplace has gained some prominenceover the past decade, mainly in research investigating its potential relationship with

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organisational stress (eg. Jayarante et al 1988; Cummings 1990). It has been argued thatsocial support can provide a moderating effect to how stress is experienced within anorganisation (Ganster et al 1991). However, little investigation has occurred into themeaning of this social support for other areas of individuals’ working lives, althoughrecent research has begun to investigate the role of team support in team effectiveness(Drach-Zahavy & Somech 2002).

Langford et al (1997) identified a typology of four attributes which can be assigned tosocial support, namely, emotional support, instrumental support, informational supportand appraisal support. This paper considers the attribute of emotional support, whichinvolves the provision of caring, empathy, love and trust (Langford et al 1997). Moss(1973) describes this support as a ‘subjective feeling of belonging, of being accepted, ofbeing loved, of being needed all for oneself and not for what one can do’ (p.237). Therespondents’ concerns with emotional support have been grouped by the author into thoseof acceptance and respect, and of caring.

In this discussion, it is also important to consider the difference between perceived andreceived support. Perceived support is described as a belief that support will be availableif it is needed (Sarason et al 1994). In contrast, received support is considered to be anassessment of the social support actually given by others during a particular interaction(Sarason et al 1994). Put simply, perceived support is when we believe we will besupported; received support is when this actually happens.

Acceptance and Respect

Respondents described a concern for treating their other team members well, being niceto others. This behaviour was seen as one of the aspects of team membership.

You need to be nice, you need to be professional. Just simple things . . . Youneed to treat people the way you want to be treated, and treat them with respect.(Michelle, p. 27)

This treatment of other team members carried with it an expectation of reciprocity, whichties in with Cobb’s (1976) argument that the communication of emotional support lets theindividual know they belong to a network of mutual obligation.

Because I would always go and ask people for help, and expect them to be flexibleand nice and pleasant. And support each other. (Michelle, p. 23, my emphasis)

This concern with ‘respecting’ other team members, of wanting to be ‘nice and pleasant’,is of interest in light of the increasing recognition of abusiveness and harassment in theworkplace (Einarsen 1999). Employees’ experiences can range from the extremes ofencountering incivility and rudeness (eg. Johnson & Indvick 2001) to being subjected toacts of assault and violence (eg. Hannabuss 1998). Here, team membership is viewed as

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a buffer to this behaviour with the expectation that team members will not act in such amanner towards each other, that within a team can be found an environment of respect.

However, what is experienced if this reciprocal situation is not observed? Laurendescribed how a number of people in her team felt strongly about respecting the positionsof others in the team, and their right to voice their opinions. However, she didn’t alwaysfeel this was returned, a situation which distressed her:

I’m very much a team player, and that’s why I get so upset when it starts to goastray, because I do believe in helping each other and supporting each other andworking through stuff. (p. 32)

Here, the perceived breakdown in respect being given to others is seen as the team ‘goingastray’, of not supporting each other as they should be.

Caring

Another form of emotional support described is that of caring, of having concern for thefeelings and well-being of other team members. Michelle expressed this as ‘we’realways thinking of the other person, we’re always thinking of the implications for theother person’ (p. 27). This dimension incorporates a sense of empathy for other teammembers, an awareness and acknowledgment of their particular situation. This form ofsupport can provide a safe place for team members, where they can be comfortable.Karen says ‘you’ve got a team to fall back on who’ll support you . . . if you get tired,there’s people there to buoy you up and keep you going’ (p. 11). Here, the team isviewed as providing the moderating affects of social support described above. Whenemployees are experiencing difficulties or pressure in their work, the other team membersare seen as providing assistance to relieve stress and fatigue.

Again, the lack of this element of emotional support is perceived as reducing the sense of‘team’, of removing some of the ‘togetherness’. In the last twelve months, Karen hasmoved within the same organisation from a team which she perceived as providing thiscare and empathy to one in which it is lacking. It was with an air of resignation that shesaid:

Whereas now you’re doing things, and everyone in the team really is doing theirown thing, but nobody really cares what the other people are doing anyway. Sothere isn’t even that team spirit, I guess, or whatever there was before. (p. 5)

Conclusion

These findings are of importance to our understanding of work teams, particularly theexperience of individuals within these teams. For some individuals, team membershipmeans more than a structure in which to work together. Here we see descriptions of aconcern with the social support which can be provided by other team members. Of

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particular interest is the impact that a perceived lack of this support has on individuals’impressions of their team as a whole. Further research is required into the area of socialsupport in relation to work teams, including investigation into any differences betweenperceived and received support.

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Drach-Zahavy, A. & Somech, A. (2002). Team heterogeneity and its relationship withteam support and team effectiveness. Journal of Educational Administration, 40:1, 44-66.

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Maslow, A. (1954). Motivation and Personality. New York: Harper & Row.

McGregor, D. (1960). The Human Side of Enterprise. New York: McGraw-Hill.

Morgeson, F.P., Aiman-Smith, L.D. & Campion, M.A. (1997). Implementing WorkTeams: Recommendations from Organizational Behavior and Development Theories.Advances in Interdisciplinary Studies of Work Teams, 4, 1-44.

Moss, E.G. (1973). Illness, immunity and social interaction. New York: John Wiley &Sons.

Resnick, B., Orwig, D., Magaziner, J. & Wynne, C. (2002). The Effect of Social Supporton Exercise Behavior in Older Adults. Clinical Nursing Research, 11:1, 52-70.

Sarason, I.G., Pierce, G.R., & Sarason, B.R. (1994). General and specific perceptions ofsocial support. In Avison, W.R. & Gottlin, I.H. (Eds.), Stress and Mental Health, 151-157. New York: Plenum.

Stewart, D. & Mickunas, A. (1990). Exploring phenomenology: a guide to the field andits literature (2nd ed.). Ohio: Ohio University Press.

Stott, K. and Walker, S. (1995). Teams, Teamwork and Teambuilding. Singapore:Prentice Hall.

Taylor, S.J. & Bogdan, R. (1984). Introduction to Qualitative Research Methods. NewYork: John Wiley & Sons.

Tjosvold, D. (1991). Team Organisation: An Enduring Competitive Advantage. London:John Wiley & Sons.

Walters, A.J. (1994). Phenomenology as a way of understanding in nursing.Contemporary Nurse, 3: 3, 134-141.

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Religiousness and Perception of Ethics in Other Religious Denominations

Carolyn E. PredmoreManagement and Marketing Department, Manhattan College

Alfred R. ManduleyManagement and Marketing Department, Manhattan College

Ahmad GomaAccounting, Computer Information Systems and Business Law Department, Manhattan

College

Faraj AbdulahadEconomics and Finance Department, Manhattan College

Abstract

Ethics seem to be challenged on a weekly basis in the business environment thisyear. We have experienced the corruption of Enron, WorldCom, and ImClone.WorldCom appears to have been investigating a variety of accounting methods tohide poor earnings and management. Each revelation brings new calls forincreased legislation and a public cry for more ethics in business. This paperextended an interest in the religiousness of a person and his/her perception ofethics using 334 undergraduate students enrolled in business classes at a smallprivate college in New York. It was found that these students had a very highlevel of expectation of daily application of ethics in their future work.Additionally the more often a respondent attended a house of worship the morethat person was unsure of the ethics of a person of another religiousdenomination. This may be an effect of reaction to the terrorist attacks on 9/11.

Introduction

Ethics in business these days almost seems like an oxymoron. Nearly every day thenewspapers carry articles revealing more ethical scandals in business. Last year’selectricity scarcity in California seems not to have been born of absurdly poorgovernmental decisions and a market economy, but was due to a monopolistic-like holdon energy that Enron had controlled prices to its advantage. Those skimming prices werenecessary in order to keep Enron afloat economically, as it was trying to hide thecompany’s spiraling losses by keeping them in creative accounting. Arthur AndersenLLP has had the misfortune to be associated with several firms which had clean auditreports and then followed with bankruptcy proceedings.

Prior to this rash of reports of fraud, insider trading and monopolistic practices, therewere the insider trading scandals of the 1980’s and 90’s with Michael Milken and IvanBoesky. At each juncture, there is general sentiment that students “these days” are not as

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ethical as they have been and there needs to be increased efforts to teach ethics in collegeclasses before graduates or students are released into the business world. Since theMilken junk bond market exploded, there has been a great change in business curricula toinclude ethics in some format. The AACSB requires a serious treatment of ethics in allclasses. And yet with all of this change and focus on ethics, there is a whole new set ofsituations which are certainly ethically tarnished if not criminal in nature. MarthaStewart is about to be investigated involving insider trading and ImClone stocks. Whilemost of what Martha does is a “good thing”, insider trading is definitely not.

Since there has been an increased emphasis on teaching ethics in the classroom in mostUS schools of business since the late 1980’s, there is a question of what is the students’perceptions of the application of ethics in business. This school has a mission ofproviding a values-based education and we wanted to know what the students valueswere in regard to religion and ethics.

This research project is part of a line of research begun with a look at the effect ofreligion on ethical practices in accounting. It was held that Islam did not believe in (orapprove of) fraudulent accounting procedures or reports so that a religious Moslemaccountant would be unable to create or sign off on bad accounting procedures orfraudulent practices. The implication was that religiousness was synonymous withethical behavior.

This paper examined the beliefs of undergraduate students enrolled in business classes ata small metropolitan college in the New York Metropolitan area. With the preeminentfocus on a values-centered education at the school and the emphasis on ethics fromwithin education, we wanted to uncover students’ perceptions and beliefs aboutreligiousness and ethics.

Literature Review

Ethics is part of the required curriculum in many majors including business due to aperceived need to reinforce ideals of morality and to forestall participation in criminaland unethical behaviors that have been discovered periodically in the business world.Equally important are the research findings that indicate that ethics education, not justaging or business experience significantly raises the moral development of individuals(Dordrecht, Kracher, Chatterjee and Lundquist, 2002). In fact, business experience, inthe absence of additional education, appears to have a negative relationship with thedevelopment of a higher moral code of ethical behavior.

Thomas Baker (2002) calls the relationship between business experience and faith orgood works, “a great divorce.” Traditionally, houses of worship have paid little attentionto the type of business someone is in except to try to elicit additional funds. This may bea result of trying to demonstrate that all people can reach God, not just the rich and/orpowerful. Instead, references to business are often mentioned as examples of sinfulbehavior or misdirected energies that could be put to better use. Baker (2002) cites one

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sermon that found that “all advertising was exploitation and all media was manipulative.”While some advertising and media certainly fit this description, blanket condemnationencourages many in the congregation to think that their religious leaders do notunderstand the business world well.

However, this past year has been a momentous year filled with incredibly difficultadversity. Since the attacks on New York City and Washington D.C. in September 2001,and the collapse of Enron due to fraudulent business practices, there has been a notedincrease in spirituality (Walker, 2002; Astor, 2002) or a longing to see a higher powerinvolved in people’s lives. People have quit careers in high-powered jobs to find careerswhere they feel they are bringing all of their capabilities to bear to do good work andgood works (Walker, 2002). One question is how has this increased national focus onethics and spirituality affected the perceptions of the importance of ethics inundergraduate students taking business classes?

Hypotheses1. It was thought that students believe that religiousness as measured by

participation in a religion would indicate ownership of higher ethicalstandards for behavior.

2. It was also thought that the increasing focus on ethics in business, the rescueand recovery and other good works by corporations and businesses that was aconstant in their lives 24 hours a day, that ethical behavior in business wouldhave a high priority.

Method

The study sample included 324 undergraduate students enrolled in business classes in thelatter part of the spring semester. Not all were business majors. There were 14 majorsrepresented which included a majority from the School of Business, however, there wererepresentatives from the schools of Arts, Engineering, and Science. There were 170 menand 145 women with nine people abstaining from identifying their gender. While therewere only 2 freshmen, there were 97 sophomores, 128 juniors and 97 seniorsincorporating diversity of length of college experience. The required ethics and religionclasses are usually taken at the freshman and sophomore levels so all of the studentsshould have had the benefit of that common body of knowledge.

Survey questions were developed by the authors based on the hypotheses and thenrevised based on a small pilot sample. The questions were constructed using a Likertscale for item responses except for demographic information questions. The surveyswere distributed in class and participation was voluntary (see Appendix A).

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Data Analysis

Since the surveys were distributed in classes, there was a 90% response rate. Somestudents said that they had completed the survey in another class. Since the survey wascompletely anonymous, it was impossible to corroborate those statements. The surveyswere scored and analyzed using SPSS.

Results

We found that a significant number of students strongly agreed or agreed that ethicsshould be applied in general in business (_2 = 58.550, p=.000). There were also asignificant number of respondents who believed that one did not have to be unethical tosucceed in business (Pearson’s r = 20.122, p=.000). Indeed, a significant majority ofstudents strongly agreed or agreed that ethics should be considered in each businessinteraction (Spearman’s rho= .221, p=.000). This relationship was significantly relatedto how often a respondent went to a house of worship (Spearman’s rho = -.127, p=.05 orless.

The less often a respondent attended worship services, the less likely that person was tobelieve that unethical behavior was necessary to succeed in business. Students as a groupbelieved that people who follow their religion to the letter are not more ethical in theiractions than people who may be more casual in their religious observance (Spearman’srho = 18.023, p=.001). A wide majority significantly believed that business peopleshould be ethical and a smaller, but still significant number believed that ethics do not getin the way of doing business.

In looking at religiousness as measured by the frequency of visiting one’s house ofworship, an interesting relationship was discovered. There was a significant positiverelationship between higher levels of religiousness and the belief that a person’s religiousdenomination made a difference in that person’s application of ethics (Spearman’s rho =.127, p=.013). In other words, the students who identified themselves as more religiousbelieved that a person’s religious denomination had an important effect on their use ofethical behavior.

Discussion

The hypothesis that the increasing focus on ethics in business and experiencing the rescueand recovery, that ethical behavior in business would have a high priority was supportedby all the measures asking about the use or application of ethics in business situations.While this is heartening, these people are full-time students and have yet to have many oftheir precepts tested by full-time business experience which may serve to tarnish theirfervor over time.

We did not find specific support for the hypothesis that states that students believe thatreligiousness, as measured by participation in a religion, would indicate ownership of

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higher ethical standards for behavior. In fact, the result that even causal religiousobservers believed that ethics should be considered in every business transaction gave anindication of the scope of the belief in ethical behavior as a standard in business. Thefinding that a student’s greater religious participation was related to a belief that aperson’s religious denomination was instrumental in that person’s ethical behavior wassurprising to us. It may be linked to an underlying suspiciousness of people involved inreligions, which were very different from that of the students.

This group of students experienced the September 11th attacks while not more than 10 to15 miles away from the Twin Towers with their parents, friends, relatives andacquaintances who worked in the World Trade Towers or nearby. Some of these studentslost family, friends, co-workers, neighbors and acquaintances or they know someone whodid. They were all affected to some degree. There may be some underlying tensionbetween Judeo-Christian ethic and Islamic tenets in the minds of these students.

One of our measures of religiousness was how frequently someone attended his/her houseof worship. Houses of worship have reported significantly increased participation inservices since 9/11. The respondents in this study may be influenced by the attack and itsaftermath to experience changes in their religious observance. It may have made somemore cognizant of their religious faith and to cause others to doubt or cast aside theirfaith. We did not inquire into those aspects of the effects of the terrorist attacks, but thatmay have a confounding effect on our results.

Further research is needed to determine what effects, the belief that religiousdenomination matters in ethical behavior, has on people’s ability to work well in businesswith people from a wider range of religions than they have already been exposed. Whatwill be the ramifications for group or team work with a number of people who are notlikely to be similar to the students? This research did support the teaching ethics asmanifest by the high levels of professed belief in the importance of ethics. However, theresearch raised more questions that may be troublesome for business in the future onpossible profiling based on religion.

ReferencesAstor, Dave, (2002) “Spiritual Content Has Higher Power,” Editor & Publisher, 115(11)p. 16

Baker, Thomas, (2002) “ The Odd Couple,” Commonweal, 129(11) pp. 24-25.

Dordrecht, Beverly Kracher, Abha Chatterjee and Arlene R. Lundquist, (2002) “FactorsRelated to the Cognitive Moral Development of Business Students and BusinessProfessionals in India and the United States: Nationality, Education, Sex, and Gender,”Journal of Business Ethics, 35(4), February, pp. 255-268

Walker, Ruth (2002) “Post-Enron, Spirituality Gains,” Christian Science Monitor, April29, p20

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Appendix 1Ethics Survey

Ethics has been an important topic in business for many years since Michael Milligancreated the junk bond market and prosecuted for his manipulation of that market.However, society’s view of ethics may change. This survey is a look at college students’perception of ethics and behaviors today. Please answer the questions to the best of yourknowledge. All answers are anonymous.

SA – Strongly Agree A - Agree D – Disagree SD – Strongly Disagree

1. I believe that ethics should be applied in general in business SA A DSD

2. I believe that ethics should be considered in each business interaction SA AD SD

3. I believe that ethics are considered every day in business SA A DSD

4. I believe that some professions are more ethical than others SA A DSDIf so, what profession? ________________________

5. I believe that business people do not have to be ethical to succeed SA AD SD

6. I believe that business people should be ethical SA A DSD

7. I believe that ethics gets in the way of doing business SA A DSD

8. I believe that people who follow their religion to the SA A DSDletter are more ethical than people who do not.

9. I believe that fundamentalists in a religion are more ethical thanthose who are liberal SA A DSD

10. I believe that the religious denomination makes a difference in aperson’s application of ethics. SA A DSD

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Please answer the following questions about yourself. They will not be used to identify.Please circle or fill-in the answer.

I am a ___Freshman _____ Sophomore _____ Junior _____ SeniorI am ___ Male,____ Female.My marital status is __Single ___In a Relationship ___ married ___ separated ___divorcedMy major is ________________________My work experience is: _____ yrs fulltime _______yrs part time ____noneI go to my house of worship: 1 or more a week, 1 x month, 4 x year, 1 x year, do not go.

My family income is: __0 – 25,000 __25,001 – 50,000 __50,001-75,000 __75,001 –100,000

___ over 100,000 a year.

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Managing Store Personnel to Effectively Reduce the Wasted ResourcesWithin the Transition Area

Carolyn E. Predmore*Management and Marketing Department, Manhattan College

Mary MichelAccounting, CIS and Business Law Department, Manhattan College

Alfred R. ManduleyManagement and Marketing Department, Manhattan College

Abstract

The recovery of New York will require the recovery of large corporations and thesmall entrepreneurial business person. The small department stores that servicedthe working population both in the World Trade Towers and in the rest of thebusiness district need to reopen for business to the public and need to effectivelyuse all of the space. Not all of the space in a retail store, however, can be used togive information to the public if the public does not habitually look forinformation in that area. The entry into a store is known as the transition area andinformation, advertisements, carts, baskets, almost anything there will not benoticed by the shopping public. It is wasted space unless management canstrategically place personnel to interrupt the inner dialog of the shopper and alertthat shopper to the information which the store can give. Wal-Mart’s greeters oruse of electronic kiosk/monitors may be the way to utilize the space efficiently.

Key Words: Facilities Management, Competitive Advantage, Strategic Advantage,Electronic Kiosk

Introduction

Facilities management, once relegated to a back office function, has become enormouslyimportant as the cost of floor space increases. Store space allocation has become part ofconsiderations of customer profiles, consumer psychology, asset optimization, personneloptimization and retail strategy (Fox, 2001). The store layout must encourage shoppersto look, consider, and buy if the store is to remain in business. This economic scenario isparticularly important in the face of the rebuilding of Lower Manhattan’s shopping areas.Rental space is expensive ($120 psq; Murray Hill, 2002) and the foot traffic in theFinancial District is not yet back to pre-9/11 levels. Larry Silverstein anticipates theoccupation of the rebuilt office and retail outlets at the World Trade Center to be fullyfunctional by 2005, if he is able to obtain his double insurance payment for two terroristattacks on his buildings (Morrissey, 2002).

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Lower Manhattan was involved in an economic revitalization plan before the attacksoccurred that was “designed to increase investment in the area’s economy by spurringimmediate activity in the commercial, retail and residential sectors,” (New York CityDept of Finance, 2002). The plan included tax abatements, tax reductions, as well asenergy cost reductions for small companies that have at least 3 to 5 year leases or 10 yearleases for companies with more than 125 employees. The main reason for this effort wasto increase the viability of work, retail and living space to build an area that had vitality24 hours a day, not just during business hours.

Economic Retail Reaction after 9/11

From a survey conducted of over 400 businesses in October 2001, it was found that only6% of the businesses reported increased sales activities, 4% reported having a normallevel of sales and 84% of the businesses were experiencing reductions between 20 and 80percent. The businesses “were closed for an average of 8 days … with an average saleloss figure of $3,075 per day and a total loss of $25,123 for the closure period”(Downtown Alliance Survey, 2001). Over half of the respondents reported significantinventory losses with an average loss of $11,160 (Ibid, 2001). The economic picture hasimproved with the relocation of several businesses back into Lower Manhattan such asAmerican Express and others returning some of the customer base back to the area.Continued improvement on the part of New York City on increased access to theDowntown area for both shoppers and retailers includes the removal of the ban on singleoccupant cars in the area. The local business district is asking for increased promotion ofthe area and, as a result, in June 2002, there was the first Tribeca Film Festival whichbrought many stage, screen and television actors to the area with the attendant fan base.This gave a needed outlet and approval for people to enjoy themselves after the cleanupof the Towers had been completed.

Additional help will be required to finish the cleanup of the area as expeditiously andrespectfully as possible. As businesses clear the hurdles for proving loss claims toinsurance companies, the payments will be targeted to rebuilding and improving the retailenvironment that was there. There was a need for increased retail stores at sidewalk levelwhich is in the plans for the new World Trade Center (Morrissey, 2002) and for the restof Lower Manhattan.

Retail Space Allocation

The proper planning for space allocation is a strategic decision designed to enhanceprofits through the efficient use of store personnel, placement of merchandise andstrategic use of open space. While unused space still costs at least $120 psq, every inch ofstore space cannot be taken by items for sale. Shoppers need walkway space.Merchandise needs to be displayed in an attractive manner in order to catch the attentionof the shopping public. Additionally, stores that previously relied on price competition ortraditional low prices and little store atmosphere have found that sales increase when the

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store is brought back to more traditional settings, rather than warehouse height and openspace.

Retail Transition Area

The trick is to balance the placement of merchandise with the needs for aisle room andpersonal space for shoppers. In conjunction with personal space, shoppers also haveshared behaviors in stores. Paco Underhill (1999) found that shoppers tend to disregardany information or display that is in the first 20 to 25 feet of a department store. Thatwas termed the area of transition where the shopper moved mentally from being outsideand arriving at the store to being in the information acquisition mode of shopping. Theshopper may be going over the mental shopping list or still involved in the act of gettingto the store. Whatever the mental state of the shopper, the transition area is a dead zonefor merchandise. It is also a dead zone for profits and the question becomes how tomanage that area so that it can be more profitable for the retailer.

Most retail outlets in Lower Manhattan are not the size of Saks Fifth Avenue, Lord &Taylor or Bloomingdale’s. The store size can range from 300 square feet to severalthousand square feet. In a store that small, the transition area is smaller than 20 to 25feet, but it still an area in which the shopper does not notice much information. Whatshould the small retailer do to increase sales? Several traditional retailers in the U.S. andEngland have been mulling over retail space allocation, facilities management andstrategy. One overriding concern that has been stated by Berry, Carbone, and Haekel(2002) is managing the customer experience. The retailer must understand thateverything in the store emits signals to the customer that “influence the buying process”(Ibid, 2002). The atmosphere of the store, the way the merchandise is displayed, theamount of space allowed for browsing, as well as the impressions given by salespeopleand their speech patterns.

The poor downtown retailer has just experienced the worst year ever in New York.Rental space is costly and needs to efficiently produce revenue. Additionally, there areexpenses from the 9/11 attacks, and Underhill says that there is an area in the store thatcannot be used effectively since the shopper does not even pause to look around the storeuntil inside by several feet. One store which has tried to condense the transition area isWal-Mart, which has instituted the “People Greeter” position (walmart.com, 2002). Theperson is an integral part of the corporation’s customer service network. The greeter isusually a former retired person and has a non-threatening persona. This person welcomesshoppers to Wal-Mart and asks what they are looking for so that the greeter may directthem to a particular area of the store. The shopper is able to start shopping easily and thegreeter has been able to get the shopper mentally into Wal-Mart within the first 6 to 10feet of the store.

The idea of using a greeter to interrupt the mental dialog of the shopper in the transitionarea seems to work for Wal-Mart, but may be seen as intrusive in a different retaillocation and situation. Many shoppers are put off by being approached by a salesperson

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who asks if help is needed. The shopper often wants to look around, to get a feeling ofthe store before focusing on a particular item to buy. Wal-Mart greeters avoid this byasking what item the shopper is looking for, not asking if help is needed. A confidentshopper often does not want to be perceived as needing help. One problem with the useof a Wal-Mart type greeter is that many downtown stores are either too small for a greeter(other than the proprietor) or the cost of sales personnel is so expensive that to use anindividual to give directions to every shopper would be cost prohibitive.

One method for directing store merchandise placement information to shoppers would beto use a computerized kiosk that could post important sales information on a zipperannouncement panel. Shoppers could access the store database and view maps forlocating items are in the store. Kiosks are not new, but zipper information displays areused in many places in New York and are frequently accessed by the passing public.They are a traditional form of information display in the New York area. By combiningzipper panels with an interactive shopper information computer, the shopper could beinduced to look for shopping information in a smaller area than previously needed,thereby strategically using the first ten feet of the store effectively rather than locatingmerchandise displays in an area where shoppers do not usually seek information or wheremerchandise is static.

Conclusion

It is imperative for downtown retailers to realize as much investment return from theirfloor plans as is possible in order to remain in business after the catastrophic effects of9/11. The use of computerized information kiosks with zipper displays may combineenough movement, newness, and interactivity to effectively interrupt the shopper’sreverie and refocus the shopper within a shorter distance inside the store.

References

Berry, Leonard L., Lewis P. Carbone & Stephan H. Haekel, (2002), “Managing the TotalCustomer Experience,” MIT Sloan Management Review, 43(3) Spring, pp. 85-89,

Downtown Alliance Survey of Lower Manhattan Retail Establishments, (2001), Alliancefor Downtown New York, Inc., October 5,

Fox, Bruce, (2001), “Retailers Integrate Space Planning with Key Business Functions,”Stores, 83(12), pp. 59-60, December.

Morrissey, Janet, (2002), “Ambitious Developer Sets A World-Trade Timetable,” DowJones Newswires, April 19.

Murray Hill Properties, (2002) www.murrayhill.com/leasing_retail_spaceofferings.html,June 18, 2002.

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New York City Department of Finance, (2002), “Lower Manhattan EconomicRevitalization Plan,” New York City Economic Development Corporation, www.newyorkbiz.com/ceplookup/Tax_Benefits_d.html, June 18.

Underhill, Paco (1999), Why We Buy: The Science of Shopping. Simon and Schuster.New York.

Wal-Mart , (2002)http://161.165.200.61/wmstore/wmstores/Maincareers.jsp?BV_SessionID=@@@@0142753514.1024454027@@@@&BV_EngineID=cccdadcfgkhlgmicfkfcfkjdgoodglh.0&pagetype=careers&template=Careers.jsp&categoryOID=-8247&catID=-8247&subCatOID=-9355&subtemplate=CareersContent.jsp#greeter

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The Role of Human Resources in Creating andSustaining a Competitive Advantage

Robert C. Preziosi,Wayne Huizenga Graduate School of Business and Entrepreneurship, Nova

Doreen J. Gooden,Wayne Huizenga Graduate School of Business and Entrepreneurship, Nova Southeastern

University

Abstract

The role of Human Resource departments in organizations is changing. HR mustbecome a partner in strategic planning and decision-making. This leads to HRengaging in policies, processes, and procedures that are aligned with strategicgoals. This paper explores how organizations are changing to partner with HR asa collaborate player in gaining a competitive advantage. In particular, the paperfocuses on HR in an international context because many companies have focusedtheir growth for this broad arena.

Key Words: Competitive advantage, Human Resources, international strategy, strategicadvantage.

Introduction

The Human Resource (HR) Manager’s role in assisting and identifying ways of dealingwith these changing factors will be vital to the organization’s success. It is going torequire that Human Resource Managers expand their traditional roles of recruiting,selection and staffing and become more of a business partner in supporting the strategicplans of the organization. Many organizations now believe that integrating and aligningthe HR strategy with the strategic plan of the organization is essential to achievingbusiness success (Briggs and Keogh 1999). The introduction of an effective HR strategyaligned to strategic business planning, is a prerequisite to ensure that “underlying powerstructures, procedures, practices, values and norms are in place to facilitate the necessarypace of change that can be sustained within the psychological capacity of the business”(Briggs and Keogh 1999). The purpose of this paper is to provide a framework forunderstanding the strategic issues.

Changes Impacting HR

This paper will focus on the challenges facing organizations, and the role of humanresource management in transforming the function from a low level expense center to amore visible and responsive investment center (Dyer and Holder, 1998). One keydimension of this transformation which also will be explored is globalization, which

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incorporates the customs and laws of other countries into effective HR policies (Caligiuriand Stroh, 1995; Mishra et. al., 1994).

Technology is increasing at a rapid pace and has created a major change in terms of howinformation is transferred and accessed. The Internet has been a major force intransforming how information is transmitted and how business is conducted today. As aresult there is stronger competition amongst firms because of enterprise extension, greateragility, knowledge transfer, and less barriers to entry (Mische, 2001). According toRowden (1999), as a result of technology, many countries are becoming global producersand are amassing enormous wealth very quickly. This widens the economic gap betweenthe haves and the have-nots and if this situation is left unresolved, the inequity may bethe fuel for unrest and civil disturbances. So while technology enables the informationgathering and storage needs of HR to be taken care of, it may create economic imbalance.

Learning to deal with changing political scenes will be a new challenge for Western firmsthat try to compete globally (Eichinger and Ulrich 1995). When firms operate globallythere are certain political issues of the host country that will have impact on theirbusinesses and which sometimes create an uncertain operating environment for them. Anunderstanding of the political scenario of the country will be necessary.

Consumers are more informed today than days gone by and are demanding more ofsuppliers. They now have more choices and are ensuring that “they get value for theirmoney” and many are demanding the highest quality for the lowest price. Manyorganizations now believe that the success of the strategic management process largelydepends on the extent to which the HR function is involved (Butler et al 1991). HRmanagers will now need to become more proactive in the decision making process of theorganization as all these changes will have significant impact on the employees – themost valued asset to the organization. HR will be required to identify, attract and selectqualified and suitable persons to function both locally and globally. Hiring talent andretaining it may become HR’s most important issue.

New HR Skill Set Required

HR managers need to have a paradigm shift from their traditional functions and to haveknowledge and understanding of financial and reporting systems, marketing, operations.They must have the business acumen necessary to understand and support the business(Rowden 1999). This will make the HR professionals an indispensable part of a teamassigned the task of charting a business’s future (Hussey, 1995). This will include focuson the organization’s culture and values. If organizations are to be nimble competitorsthen HR must assist CEOs by publicly embracing the values of the company (Byrne,2002). HR will also need to take a more active role developing values congruencebetween organization and individual values.

Some theoreticians think that developing values congruence may lead to “group think”.Kotter and Heskitt (1992) did not find this to be the case. In particular, what they did

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find was that shared values in different industries and different sized companies led toextremely better performance when compared to companies where there was no valuescongruence. “Group think” was never an issue.

HR policies should be aligned with the overall strategic plans of the organization. Assuch HR managers will be required to contribute to the overall strategies and vision of theorganization. When HR managers become a part of the strategic process and include HRpolicies with other organizational strategies, they are in fact having their voices heard,while at the same time, gaining credibility for the HR function. The vision createdshould be a source of energy that will influence organizational members behaviors tocreate an environment that will foster positive interaction and good thinking of itsmembers which ultimately benefits the customer and the stakeholder.

Knowledge of and practical applications of Human Resource theory and practices shouldbe core competencies of the HR manager. The current trend towards an enlarged role ofHR managers in strategic planning suggests that organizations need to ensure that HRpersonnel, in addition to specific technical knowledge of HR functions, also have thebroad knowledge, training and resources necessary to integrate HR functions into theoverall strategic plan (Zellars & Fiorito, 1999). HR managers must be able to diagnoseperformance problems and assist in solving them. They must also be able to distinguishbetween disciplinary issues, involving willful misconduct and gross negligence and thoseinvolving performance (Benham, 1999). Preziosi (1999) suggests that there are 12 issuesthat must be addressed at the intersection of strategy and performance. They are; healthcare costs, workplace violence, gender equity, labor availability, skill retooling,workplace democracy, pay for performance, workplace efficiency, workforce mentalhealth, telecommuting, leadership renewal, and worker diversity.

The dynamic and changing nature of the environment, will result in organizations havingto change the ways in which they conduct business and possibly even some structuralchange. HR managers will have to be receptive to change and be committed to adaptingto these changing demands. Organizations will have to respond faster to change. Thiswill require innovation.

HR in a Global Context as the Ultimate Competitive Arena

Organizations are competing globally. But what does it mean to be global? According toKim (1999) organizations considering to operate globally have to be serious aboutdeveloping and managing people who possess global skills and who “think, lead, and actfrom a global perspective”. It is imperative, therefore, that HR recognizes andunderstands the core competencies of a global manager and selects persons with thenecessary skills and attributes when sending them overseas.

Rhinesmith (1996) suggests that global managers must have a global mindset, which isreally the way they look at the world from a broad perspective and always looking foropportunities and possibly threats that can impact on the organization. He believes these

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managers must have drive, be able to create a balance, must engage in activities, alignprocesses, be able to go with the flow, create value teams, and learn from each other.Hence managers’ attributes must be – analytical, knowledgeable, strategic, flexible,sensitive and open. He further identified six management skills as necessary; (1)Managing competition (2) Managing complexity (3) Managing alignment Managingchange (4) Managing multicultural teams (5) Managing learning.

Dowling (1988) points out that the personnel policies and practices of multinationalenterprises are likely to be more complex and diverse. An understanding of the incometax issues surrounding salary in the domestic country is vital. Also, HR needs to becognizant of union involvement and consumer groups which are pressure groups existinglocally, and which sometimes put more pressure on foreign companies than locals.

Identifying persons with ability to function effectively in a global organization regardlessof geographical location can sometimes be difficult. It can be a challenge in trying tomotivate employees to spend time overseas, as many talented employees do not want tomove overseas. HR can look at other ways of dealing with this issues. Some companiesare moving away from the traditional expatriate assignments and are using “aspatialcareerists”.

Aspatial careerists, according to (Roberts, Kossek & Ozeki 1998), have borderlesscareers, typically working in multiple countries over the course of their work lives. Thechief difference between the aspatial career and the expatriate assignment is that thesecareers exist in an environment where authority and expertise are no longer thought toreside exclusively at the parent company. Aspatial careerists can come from any part ofthe globe and can take many forms. An employee may live and work overseas withfrequent moves; others may have a geographical stationary home base but are required totravel and to have the ability to think about the organization in ways that are spatiallyneutral. If they relocate, their families go with them. (Roberts, Kossek & Ozeki 1998).

Differences can exist with the parent company’s HR policies to those of the countries inwhich they are doing business. It is, therefore, important that HR managers understandthe culture of the countries in which they are operating. Global managers should beknowledgeable in political and economic and regional organizations, foreign exchange,tax and legal considerations, which may affect the organization’s business.

Miscommunication across cultural lines causes problems. Managers should be aware ofthe cross-cultural issues when working with foreign counterparts in order to avoidproblems. Research suggests that cross-cultural training is also an available HRintervention to improve the likelihood of expatriate success. Understanding the principlesbehind cross-cultural interaction helps construct a more accurate picture of interculturalsituations and avoid costly and time-consuming problem situations (Boon & Laroche2000).

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Rhinesmith (1996) addresses the fact that corporate policies sometimes do not considerreentry of expatriates into the organization and identified that a number of problemsincluding cultural adjustments, diminished status in position and others. He suggests thatin order to avoid these that a “carefully developed plan of information sharing, jobplanning and cultural appreciation be put in place”. He further believes that the samementors who were assigned to them while overseas should now represent the careerinterests when managers return.

In terms of developing a career path for expatriates, Rhinesmith suggests that a globalcareer path be developed as a combination of achievement, financial and cultural needswhere “achievement and upward mobility must be blended with financial incentives butmodified by cultural backgrounds and values that may alter what is perceived to be themost attractive package for success in global management”.

Finally, the issue of dealing with the “protected group” status is important for HumanResources Management. Legally protected groups in the United States include thosebased on race, gender, age, disability, color, religion and national origin (Goldman 2001).The HR manager’s role in understanding the laws governing these groups and makingprovision for dealing with these issues in the various countries in which they operate willhave far reaching effects on policies. An understanding of these issues will help HRmanagers develop a code of ethics governing employee actions and also monitor thesocial issues which can arise. Some of these issues are use of child labor, unfairtreatment of women, minorities, and the disabled. Thus, HR managers will be required topromote and enforce activities that perpetuate social justice, locally and globally. Thisactivity is essential for companies that feel moral responsibility.

Conclusion

The task of HR in positioning companies to be competitive in the 21st century is amammoth one. It calls for an effective integration of HR planning and business planningand a redefining of managers’ roles in linking the organization’s competencies andresources in order to create a competitive advantage. Thus, HR must help leaders build anappropriate organizational climate (Stringer, 2002). When the context for HR is globalthere are unique variables to take into account. This will require even further redefiningof roles and competency development.

ReferencesBenham, P. (1999). Challenges and trends in HR/IR programs; Bridging the gap forglobal competitiveness. S.A.M. Advanced Management Journal, 64: 3, 9-14.

Boon, J., and Laroche, L (2000). Cultural Differences. Canadian Mining Journal, 121: 2 ,34-35.

Briggs, S and Keogh, W. (1999) Integrating human resource strategy and strategicplanning to achieve business excellence. Total Quality Management, 10: 4-5, 447-453.

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Butler, J., Ferris, G. and Napier, N. (1991). Strategy and Human Resource Management.Cincinatti, OH: Southwestern Publishing Co.

Byrne, J. (2002). How to fix corporate governance. Business Week (May), New York.

Caliguiri, P. and Stroh, L. (1995). Multinational corporation management strategies andinternational human resource practices: bringing IHRM to the bottom line. TheInternational Journal of Human Resource Management, 6: 3, 191-208.

Dyer, L & Holder, G. (1988). A strategic perspective of human resource management.In L. Dyer (ed.), Human Resource management - evolving roles and responsibilities.Washington, D.C : Bureau of National Affairs.

Dowling, P. (1988). International and Domestic Personnel/Human ResourceManagement: Similarities and Differences. In Schuler, R.S. et al (ed.) Readings inPersonnel and Human Resources Management (3rd. ed.), St. Paul, Minn. : WestPublishing Co.

Eichinger, B., and Ulrich, D. (1995). Are you agile? (drivers of business change andimplications for human resource function). Human Resource Planning, 18: 4, 30-41.

Goldman, B. (2001). Toward an understanding of employment discrimination claiming:An integration of organizational justice and social information processing theories.Personnel Psychology, 54, 361-386.

Hiltrop, J. (1999). The use of HRM practices in international and domestic organizations.New Zealand Journal of Industrial Relations, 24: 1, 47-61.

Kim Suk, P. (1999). Globalization of human resource management: A cross-culturalperspective for the public sector. Public Personnel Management, 28: 2, 227-243.

Kotter, J. and Keskett, J. (1992). Corporate Culture and Performance, Free Press, NewYork.

Mische, M. (2001). Strategic Renewal, Prentice-Hall: Upper Saddle River.

Mocker, R and Dologite, D. (1997). Multinational Cross-Cultural Management, QuoromBooks.

Mistra, J. et. al (1994). Using Human Resource Management to gain internationalcompetitive advantage: A U.S. perspective. International Journal of Management, 11: 1,504-522.

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O’Donnell, S. (1999). Compensation design as a tool for implementing foreign subsidiarystrategy. Management International Review, 39: 2, 149-165.

Preziosi, R. (1999). Management – HR Partnering; Strategic HR Issues. In Biech, E.(ED.), The 1999 Annual volume 1 training, Jossey-Bass/Pfeiffer: San Francisco.

Rhinesmith, R. (1996). A Manager’s guide to globalization, Irwin ProfessionalPublishings: Homewood, IL.

Roberts, K., Kossek, E., and Ozeki, C. (1998). Managing the global workforce;Challenges and strategies. The Academy of Management Executive, 12: 4, 93-106.

Rowden, R. (1999). Potential roles of the human resource management professional inthe planning process S.A.M. Advanced Management Journal, 64: 3, 22-27.

Stringer, R. (2002). Leadership and organizational climate. Prentice-Hall; Upper SaddleRiver, NJ.Zellars, K., and Fioritto, J. (1999). Evaluations of organizational effectiveness amongHR managers: Cues and implications. Journal of Managerial Issues, 11: 1, 37-55.

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Reconsidering Mental Illness: Reinstating the Voice of a Survivor

Margaret H. VickersSchool of Management, College of Law and Business, University of Western Sydney

Abstract

The life story of a woman diagnosed with Schizophrenia is currently beingcollected. So far, eighteen lengthy, poignant and demanding interviews have beencompleted. A "damaged life" continues to emerge, as does the perspective sorarely seen outside a psychiatrist’s office. The interviews have been undertakento share "Ellen’s story", her life experiences with mental illness, in an effort tohelp us all step into her shoes – however briefly. She describes the experience ofmania, delusions, hallucinations, and fear. She shares her story with extraordinaryinsight into her psychoses, depression and fear. It is hoped that the sharing ofportions of Ellen's life story will help acknowledge her chaos narrative (Frank1995). It is only through acceptance of chaos narratives that the horror of herstory can recede.

Keywords: Storytelling, Mental Illness, Voice, Narratives, Schizophrenia.

Introduction

The winds of time swept over my soul.How have you forgotten the sweet smell of victory?Compassion lingers not in this world,The victory was incomplete.It rose and fell like stones from a cliff,Crashing into the swirling sea, sinking and forgotten,while the froth of life played above,swept up in the frivolous nature of the waves.All that was good has gone forever.

- Ellen

Ellen (a pseudonym and the protagonist in this story) felt that all that was good in her lifewas gone the day she wrote that verse. The victory she refers to was her “normal” lifewith all the Western trappings of success: marriage, home, career, money, possessions,and the prospect of raising a family in the future. For Ellen, though, the “victory” wasincomplete; fleeting, slippery and devoid of compassion. Mental illness brought her to aplace where all that was good was gone forever. Frank’s (1995) discussion about chaosnarratives is central in this paper. Chaos, when considered as a form of narrative, is theopposite of the frequently sought modernist stories of restitution. Its plot imagines lifenever getting better – just what Ellen was thinking when she penned her verse. I beganwith Ellen’s poem to set the scene for what follows. Ellen is a woman with mental illness.She is also the quintessential “wounded storyteller” (Frank, 1995, p. xi).

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Life Story as Methodology

Life story is similar to biography in that it is part of the life history – the part told to another– and includes an oral, autobiographical narrative. It involves the telling of a life by oneperson (the subject/narrator/storyteller) to another (the researcher) (Mann 1992, p. 272).Using the life story method allowed me to share her story through her eyes. The intentionwas always to ascertain her individual view of reality as experienced and reported(Sarantakos 1993, p. 209). In this particular manuscript, I have included some of Ellen’spoems, a letter she showed me during one interview, and extracts from several verbatiminterview transcripts.

Ellen’s experiential truth included periods of psychosis. The Oxford Reference ConciseMedical Dictionary (Martin 1990) defines psychosis as a severe mental illness in which thesufferer loses contact with reality. This may include delusions, hallucinations and otheraltered thought processes. Few have reported thought processes and experiences through theeyes of the mentally ill person. Ellen was, by her own admission, doing some “crazythings”. The basic theme of the life story is the presentation of experience from theperspective of the subject. Their world must be penetrated and understood (Tovey 1998, p.178).

Ellen’s Story

Ellen is an Australian woman, 39 years of age. She is highly intelligent, attractive,articulate, educated – and mentally ill. Prior to her “accident”, she was also extremelyathletic. I commence the story with Ellen’s recollections of the time she was firsthospitalised:

MV: And what had happened?Ellen: Um, I screamed. Like, and, sort of, I, [pause] I just wasn’t there. I, I veryquickly became not myself. Um, I [long pause], um, I was quite irrational. Er, Iremember at one stage I was doing a garden design in a neighbouring house andthere was a little whirlwind, and I thought that I had created the whirlwind. So, Ithought I sort of had powers. And then I went into the clinic and, part of themania is being very high and giggly. And super amounts of energy ... (EllenInterview #1, p. 3-4).

We see here the first indicators of what it is to experience psychosis. Her screamsindicate panic, desperation, a call for help. She tells us about not being “there”, not being“herself”, being “irrational”, even having special powers. She speaks, then, of the freneticpace of life as the mania gripped her:

Ellen: ... I applied for a job in a nursery and I got a job with Michele Shenen[up-market Sydney nursery] and I worked for her, and I also did gardening workand landscape design. And I also worked in a dress shop at Mosman, Chez Nous,

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selling ladies fashion and I worked at Crows Nest at Sussan’s selling ladiesfashion and then I babysat at night. So, I was more or less working seven days aweek and that was probably because I was manic and had so much energy andthen at night time I would go out. I would go to dance parties and party all night,have no sleep, and then go straight to work.MV: And were you able to function at work?Ellen: Oh, yes. Oh, yes.MV: So, you weren’t tired?Ellen: No, I wasn’t tired. I was super high. And very bubbly and chatty to all theclients. Very popular at work. Always cracking jokes and giggling. You know, Iwas just, I would, I would giggle inappropriately ... (Ellen Interview #1, p. 5-6).

Ellen talks quickly of her multiple jobs. The sentences run from one activity to another,barely with a pause for breath. The content of what she is telling us is similarly frenetic:four jobs at once and dance parties all night. Her story conveys the endless and fantasticlevels of energy that consumed her. No fatigue, lots of laughter and those around herloving her company.

Ellen’s self concept at this time was also positively reinforced by those around her.Ironically, as an attractive, vivacious, happy person, she was very popular, even as herbehaviour increasingly violated traditional norms of behaviour. Note the absence ofunderstanding of Ellen’s illness by those around her. Not only did they not “see” theproblem of her illness (Vickers 2001), they regarded her unusual behaviour as somethingpositive. However, the self concept can also be vague and disintegrated at times,rendering its influence as a guide to behaviour scattered (Polkinghorne 1988, p. 150).This sense of disconnection and self-contradiction is magnified in the person strugglingwith mental illness. Ellen’s mania and psychosis would undoubtedly have scattered herself concept and provided poor criteria for conduct. She continues:

Ellen: Then I went really cuckoo. Because [pause], I had a lot of friends. I wentgardening with a lot of friends and the business was going quite well. But I wascrazy. Because I would go to a, a, quote and I’d be dressed up in fluro-yellowshorts and little sandshoes with jewels on them, like coloured jewels on them and... I’d say, “I’m power dressing. I’m power dressing” ... But I was a nut case ...I sort of felt drained of a lot of sanity. And I’d sit out trying to balance myself.And I’d, as I walked around the streets, I would see evil symbols everywhere.Like the trees would be evil, or a church steeple with a cross on it would be evil.Or round lights would be evil. And I was just sort of walking everywhere trying toget away from evil.MV: Yes, was that frightening?Ellen: Yes, very frightening ... And I remember I was too afraid to put the lightoff at night and I would sleep with the light on and I’d look out the window and Iwould start hallucinating. I could see fairies in all the trees. And I eventually gottaken to hospital because I felt the evil spirits were attacking me and I was, sortof, I started screaming. And I was, I was just downstairs in the laundry or

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something. I, I was sort of on the ground thrashing around, trying to get awayfrom the evil spirits that were, that I felt were attacking me ... And one of theladies in the block was a nurse and she called the ambulance (Ellen Interview #2,p. 11- 13).

I am starkly reminded of the Chaos Narrative (Frank 1995, p. 97). The teller of the chaosstory is not heard to be living a “proper” life. We can see that Ellen’s talk is not easy.The story is discursive and features the notable syntactic structure of “and then and thenand then”: ‘This staccato pacing of words pecks away at the reader just as [Ellen’s] lifepecks away at her’ (Frank 1995, p. 99). Chaos feeds on the sense that no one is incontrol. The sense of precariousness deepens:

Ellen: So, she called an ambulance, and I didn’t want to get into the ambulance,but I got in and they took me up to Royal North Shore Hospital. And then theytook me into accident and emergency, and a doctor came in and started talking tome, asking me questions. But I was still trying to balance my love energies andget rid of evil ... and they kept asking me questions and I just sat there, notanswering them. And after a while I thought, “I don’t want to have anything moreto do with doctors because I’ve already seen a psychotherapist and I’ve told thispsychotherapist my life story and I don’t want to tell anyone else my life story.”And so, when they weren’t looking, I ducked out of the front doors and ran downtowards the oval. And then a guy in a white coat came running after me and Isaid, “OK. OK. I’ll go back. I’ll go back.” But before I knew it, another guy camealong with an injection. They’d IV’d [injected into the vein] me and when I wokeup I was in a cell, in Macquarie Hospital, in a padded cell in Macquarie Hospital(Ellen Interview #2, p. 13-14).

After her release from hospital, Ellen’s story continues to display a troubled life. Ellenthen reports the increasing centrality of a dysfunctional partner relationship. Ellen foundherself pregnant to a young man she did not love, moving from place to place, withoutregular contact with her family and with an illness that was increasingly wreaking havocon her life. At her boyfriend’s insistence, they moved to Queensland (about 1000 milesfrom her family and friends). The reason for this was the boyfriend’s need to get Ellen’sout-of-wedlock pregnancy away from his mother, so she didn’t find out. Ellen had toldme of her boyfriend’s anger towards her when learning of her pregnancy and of oneoccasion where he had “roughed her up”. Ellen’s family did not know of her whereaboutsor of her pregnancy. Her mental illness was getting worse. She was completely reliant onher partner at the time for social support, money, a place to live and a place to bring upher new baby when it arrived. I was unable to determine how many of Ellen’srecollections were influenced by past (or present) paranoia, hallucinations and delusions.It does not matter. What matters is that this was her story; her recalled experience:

MV: Did you have friends up there [in Queensland] though?Ellen: No. Just him. And, so then, and he wasn’t particularly nice to me ... So,when he went off to work, I was just stuck in the middle of the bush, by myself.

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No furniture, no clothes for the baby, no bassinette, nothing ... And at night, Iwas really scared. I was scared that he was going to just take the car and choof off[take off], and leave me in this place ... And I thought, “Oh, what if he’s going totry and get rid of me, and he’s going to pour petrol around, and start a fire aroundthe house?” So, I got really scared about that. And, after a while, it sort of went onlike this with a lot of tension. And, he, I didn’t know what I was going to do. Heseemed pissed off that I was pregnant. He had a lot of friends that, that I couldn’trelate to. They were very, very rough and, I don’t know, I just didn’t like them atall (Ellen, #3, p. 22-23).

Somehow, Ellen got herself back to Sydney, but could find no-one to take her in. Sheasked her mother and her sister, who still did not know of her pregnancy, but they wouldnot let her stay with them. She spent on night sleeping on the steps of her mother’s house.Then, she slept “anywhere”; on the streets, anywhere she could find shelter. She wasthen picked up by the police and taken to North Shore Hospital, but managed to talk thepsychiatric staff out of admitting her again. That same day she was released from thehospital, the baby came:

Ellen: ... And by about 4.00 pm or something my waters broke. And I wasstanding in a car park. And so then I didn’t know what to do and I just stood therein labour, like, for about 8 hours, just walking around in this car park, you know... and then, finally, I thought I’d better get to a hospital, so I jumped in a taxiand, you know, I was panting away and going ballistic, you know how you do ...(Ellen Interview #3, p. 28-29).

Unfortunately for Ellen, after the baby was born, her illness did not subside. Her mentalhealth problems and the system she was now part of contrived to part her from her newbaby at a critical time. In this instance, I share a letter than Ellen showed me to help meunderstand what had happened. While not her personal narrative, her presentation of thisto me made it part of her story. It was written by an obviously very concerned socialworker:

Ellen was an unbooked admission who arrived by taxi already in labour.Following delivery, Ellen was uncommunicative, obviously distressed andbehaving inappropriately. By the following day, it was felt by medical staff thatEllen required admission to a psychiatric unit and to be assessed by a psychiatrist.Unfortunately, [name of the different hospital with psychiatric unit] was unable toalso care for Ellen’s baby boy, so she was transferred to the Unit without herbaby.

Although a transfer to the psychiatric unit was warranted, such a separation froma newborn baby can be detrimental to the mother’s emotional state and affect anybonding she is trying to establish ... Being separated from [her baby] would onlyhave exacerbated Ellen’s already anxious and agitated emotional state.

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After her transfer to the psychiatric unit she had to rely on the father of the child to bringthe baby in to the psychiatric hospital to see her:

Ellen: And when he brought the baby in, it was really nice. I played with thebaby and I hugged him and patted him, patted his back, and I had the formula andI gave him a feed and stuff like that. And, if I ever got upset about the baby notbeing with me, they would just give me drugs. Like, I would be crying and theywould bring, they would almost, they would force me to have Largactil. Which is,sort of, just numbs your mind. And I would say to them [the medical staff], “Can’tI have a good cry? You know, I’ve lost my baby!” You know. And they wouldsort of stand around me and try and force me to take drugs (Ellen Interview #4, p.3).

While Ellen did eventually get custody of her child again, her illness and lack ofaccommodation necessitated asking the estranged father of the baby to look after himagain. Away from her baby again, her illness deteriorated further. There were numeroussuicide attempts. She tried to gas herself, an overdose of pills, to go without food forweeks. The following verse was written by Ellen during this despairing period in her life:

Come hither little one, child of an unquiet mind.Tossed around like a buoy in a storm, cossetted yet unloved.A possession without feelings.A small arrow sent forth to suffer the loneliness of one without a true connectionto body and soul.An adopted child, a mistake of nature, grinding to an infallible halt.

The poem above depicts Ellen’s essential feelings of disquiet, loneliness, powerlessness,disconnectedness, meaninglessness – even guilt. We see the plot in Ellen’s story comingtogether. Just a few months after writing the poem above, Ellen took what she believedto be the only course of action available to her:

Ellen: It was about 11 o’clock at night. And ... I caught a train to Wynyard andthen I got off at the station. Then I walked along the station and jumped downonto the side of the tracks and walked along until I got a manhole and about 2minutes later a train came along and then I just jumped in front of it …MV: So, do you remember anything?Ellen: No. I just remember the train coming and jumping. I don’t rememberhitting the tracks. I don’t remember the noise. I don’t remember it running overme. I don’t remember being under the second carriage. Apparently, I was trying tostand up – and I had no legs! (Ellen Interview #7, p. 7-8).

The Value of Narrative Knowing

Ellen lost an arm, a leg and a foot. Somehow she survived to tell the tale. We know thatin the chaos narrative, troubles go all the way down to bottomless depths, What can be

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told only begins to suggest all that is wrong (Frank 1995, p. 99). Unfortunately, theanxiety that chaos stories provoke can also inhibit hearing (Frank 1995, p. 98). Ellen’sstory is just too awful to contemplate, too painful – impossible – but it is her story. It isthe story of a troubled life - a chaos story - and a voice that has not been heard. One wayto move forward from these multiple forms of silence is by honouring the chaos story.As Frank (1995, p. 109) reminds us,

Until the chaos narrative can be honoured, the world in all its possibilities is beingdenied. To deny a chaos story is to deny the person telling this story, and the peoplebeing denied cannot be cared for.

The worst thing we can do with someone in the chaos story is to rush that person to moveon. Attempting to push another out of this wreckage only denies what they haveexperienced, compounding the chaos. What is needed is enhanced tolerance for chaos aspart of a life story (Frank 1995, p. 110-111). Modernity has a hard time accepting, evenprovisionally, that sometimes life is horrible. However, the attendant denial of that chaosonly makes it worse for the bearer. The horror is something that can only be faced, neversolved (Frank 1995, p. 112).

References are available upon request.

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Illness, Work and Organisation: Postmodernism and Antenarratives for theReinstatement of Voice

Margaret H. Vickers,School of Management, College of Law and Business, University of Western Sydney

Abstract

Explored here are antenarratives (Boje 2001) – stories without coherence orclosure – from people with unseen chronic illness. These stories are shared tobetter understand the lived experience of those who bear an illness that otherscannot see. I use some of the more positive outcomes of the postmodern turn,such as the recognition of untidiness, disorganisation and fragmentation, toconsider these chaos stories (Frank 1995). The way forward for organizations isthe acceptance of fragmented lives, including the acknowledgement of the horrorpeople have lived, allowing them to move forward with their lives.

Keywords: Storytelling, Phenomenology, Narrative, Chronic Illness, Postmodernism.

Stories and Antenarratives: Postmodernism to Reinstate Voice

The purpose of this paper is to spotlight an organisational problem that is not part of theroutine organisational discourse and to use aspects of the postmodernist sensibility (Parker1992, p. 9) to seek a more sensitive and just view of organisational life. The postmodernistrecognition of disorganisation, untidiness, and fragmentation proves useful for interpretingthe work lives of people with unseen chronic illness.

Stories are important in shaping the course and meaning of human organisation, althoughnot many have recognised the importance of the link between stories and organisation(Boje 1995, p. 1001). Stories also allow us to recognise both the similarities and theunique aspects of life in organisations. Organisations and organisational life are amultiplicity, a plurality of stories and story interpretations in struggle with one another(Boje 1995, p. 1001). Stories are also evidence of 'micro-practices' in organisational lifethat reflect the spontaneous, aggressive and expansive as well as the countervailing,taming and remedial (Boje 1995, p. 1002). As a supporter of Polkinghorne’s (1988)notion of Narrative Knowing, I attempt to reinstate the voices of people with unseenchronic illness by acknowledging their stories. I hope that this will assist in movingorganizations towards being places of greater justice.

I recognise Boje’s (2001, p. 1) important reminder that story tends to be viewed as beingless than narrative, lacking a plot and, often, coherence. The stories included here are whatBoje calls antenarratives: fragmented, non-linear, incoherent and unplotted (Boje 2001, p.1). Antenarrative is never final, never complete, but give attention to what is going on, thesense of the lived experience (Boje 2001, p. 3-4). Postmodern antenarratives encourage thepossibility that there may be no story to tell, only fragments that may never come together

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coherently (Boje 2001, p. 5). Anecdotes provide the power to compel attention, to lead toreflections, to involve the reader personally by searching for meaning, to touch or move usthrough the content of the story, or to measure one's interpretive sense (van Manen 1990, p.121).

This is not the traditional comparative interpretation where the researcher has ultimate andundisputed authority, but a text where the author is very much part of the scene (Boje 2001,p. 776). The text presented here is an interweave of many voices and conventions – a pluraltext – that, hopefully, delivers some temporary agreement, here and there (Boje 2001, p. 77-78).

Illness and Work: Shattered Lives, Fractured Voices – A Postmodern Existence

A chronic illness is an ongoing condition which may be physical, emotional or cognitive. Itmay or may not be treatable or curable (Vickers 1995; 1997a; 1999a; 2001). An unseenchronic illness is one that entails all of the above characteristics but also combines theattributes that Goffman (1963, p. 65) ascribed to invisible stigma: a condition that is notperceptible, not noticeable or evident to others. In short, a condition unseen by others thatmay arise from disease, disability or injury (Vickers 1995; 1997a; 1999a; 2001), and onewhich may result in profound problems for the bearer. Examples may include various formsof cancer, HIV, multiple sclerosis, depression or heart disease. There are many more.

Critical postmodernism (Agger 1992; Boje, Fitzgibbons and Steingard 1996, p. 64) was seenas a useful vantage point to explore these stories. Aspects of the critical postmoderniststandpoint (Boje, Fitzgibbons and Steingard 1996, p. 64), particularly the recognition ofheterogeneity and multi-dimensionality, sparked an interest in one interpreting storiesreplete with ambiguity, conflict and discontinuity. Critical postmodernism begins witheveryday experience and discourse, including its own (Agger 1992, p. 278). As a criticaltheory of modernity and postmodernity it has abundant insights into what is going wrongwith the world (Agger 1992, p. 280). Additionally, critical postmodernism enables theapplication of postmodernism in a useful way, through suggesting the need for organisationsto find new ways of working and thinking in a postmodern age (Boje, Fitzgibbons andSteingard 1996, p. 64; own emphasis). I recognised and shared the need to seek complexity(Tal 1996, p. 22, my emphasis). Postmodernism embraces heterogeneity, while questioningmany of our rationalist, modernist assumptions. One such flawed assumption – under closescrutiny here – was the notion that if you look well, you must be well. Indeed, the centralresearch question is: How do organisation members cope with that which they must bear butwhich others may not see?

The Death of CertaintyThe notion of predictability is, for the postmodernist, a theme to be torn down. For peoplewith chronic illness, a life of predictability may be a distant memory: lives, relationships,bodies that cannot be relied upon are what remain. Life and work for people with invisiblechronic illness is frequently unpredictable, turbulent and poignant (Vickers 1998). Theirresponses are often irrational, unpredictable, contradictory – postmodernist. Paradox,

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ambiguity and uncertainty are major postmodernist themes as are the creation of multiplenarratives, rather than a single infallible narrator. They leave the reader to resolvecontradictions or, as is the case here, to accept that the reader may be left with an enigmaticexperience (Boyne and Rattansi 1990, p. 7). I commence with my own reflections on theunseen nature of many chronic illnesses, including references to “appearances”, theinappropriate judgements of others, and the uncertainty of future lives and abilities in thefuture, central themes that subsequently emerged in my research:

Another excellent bottle of chardonnay is opened. It is about 9.30 pm on Saturdayevening and I sit back contentedly after dinner, enjoying the company of my belovedhusband and dear friends. Whilst the others chat happily, I withdraw within,momentarily, and reflect. A newcomer to this party would never know, judging byappearances alone, that any of us had any health problems. After all, we all lookparticularly well, some would say in the prime of our lives. We are all aged between29 and 41 years.

We are all far from "well"...

I have multiple sclerosis (MS). I live with recurrent periods of overwhelming andinexplicable fatigue; visual problems; bowel and bladder disturbances; balance andco-ordination difficulties; and numerous phantom-like, intermittent, sensorysymptoms. I have, in the past, experienced more acute disease episodes, which haveseriously (and fortunately, temporarily) affected my vision, giving me double visionfor one period and blurred vision during another. I have also had problems with myhearing, balance and co-ordination, even a period of hemiplegia [paralysis to oneside of the body], which I faced at the tender age of twenty one ... (Vickers 2001, p.xii- xiii).

Important here is the issue of the invisibility of these chronic illnesses. So little has beenlearned about what one cannot see. The constancy and primacy of the visual senses remainsthe basis for justification and assumptions of "truth" (Vickers 1997a; 1999b). Thatantiquated claims of external physical appearances corresponding with internalpsychological and moral predispositions (Finkelstein 1991, p. 42) survive is testament to thenaivety and the crudity of our sociological processes (Vickers 1997a; 2001). Beverleycommented that no-one would know she has multiple sclerosis (MS) without her tellingthem. She confirms my own experience that others would not know because they do notnotice the myriad of variable and unseen symptoms experienced:

Beverley: No. Most people would not know. I mean they wouldn't. If I say tothem, "Oh, I've got MS", they say, "Oh. You're kidding. Have you? Oh. Oh." Youknow, because things are never noticed (Beverley #2, p. 2).

Misconceptions also apply when regarding people's state of recovery. Linda confirms acontinuing, simplistic and flawed reliance, on the part of colleagues, on one sense, onedimension as she shares her experiences with life-threatening breast cancer:

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Linda: I haven't even gone twelve months clear yet and I mean they don'tgive the all clear until five years ... I think they all think, "Oh, she's fine now. She'shad her treatment. She's okay. She's back at work. She's moving. She's upright"(Linda #1, p. 10).

Stemming from these distortions is a lack of understanding from colleagues. For Linda,colleagues apparently have little idea of, or concern for, the ongoing worry she experiences,or the pain and the grief she has so far experienced since her initial symptoms of breastcancer. She shares her feelings about being "judged":

MV: You mentioned ... that other people judge you ... Can you explainthat?Linda: I just feel that like --. I felt when I had the seven months off, peoplewere thinking and I know they were thinking, I just know in my own mind that theywere thinking, "Why does she need seven months off? She's having a holiday." Imean even a couple of people said ... "Oh, where have you been for seven months?"and you say, "Oh, I've been really sick you know" and you go into it and they say,"What did you have?" and I say, "Cancer." Then they say, "Oh. Do you need sevenmonths off for that?" and "You must have had a good holiday then." And you think,"Bloody hell, it's not a holiday. I'm trying to get over it!" (Linda #1, p. 7-8).

Heterogeneity, Fragmentation and DifferencePostmodernism holds a self-proclaimed commitment to heterogeneity, fragmentation anddifference (Boyne and Rattansi 1990, p. 9). Postmodernism turns away from homogenisingprinciples: there is an affirmation of difference, of heterogeneity (Siebers 1994, p. 20-21); anacceptance of 'heterotopia' (Connor 1989, p. 9; Siebers 1994, p. 20), the impossiblecatalogue that makes no sense anywhere else (Connor 1989, p. 9); a heterotopia of mixedplaces and themes (Siebers 1994, p. 20). It is a turn towards an undoing of traditionalthinking, a questioning of assumptions and recognition of uncertainty (Farmer 1997, p. 112).For those with unseen illness, life is destabilised, uncertain and fractured. The followingpassage from Linda exemplifies the uncertainty and complexity of her life with breastcancer. The extract was typical of many of Linda's responses – rushed and discursive, butauthentic and sincere, revealing of the differences in her life that others were so unaware of:

MV: How do you feel when people say, "You look really well"? How doyou feel when they say that?Linda: I react. I always say, "Well, yes, that's what cancer is. Like you lookokay but, you know, it's basically eating away at you, inside of you, which is reallyscary." And actually somebody asked me that today. They said, "Oh, you're lookingreally well" and my reaction today was, "Well, I am feeling really good." Like, it'sthe first time in a long while probably, because I've been back at work since earlyJanuary. Because I had seven months off ... so I've been back at work since thesecond of January and like that was really, you know, a big milestone to get over,because having all that time off and just thinking, "Well", you know, "What's going

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to happen now?" sort of thing. It's always, you know, every day you wake up andyou live cancer basically, every day. You think, "Oh dear. Oh, what's today going tobe?" (Linda #1, p. 3).

Ambivalence also featured heavily in the stories. When I asked Shelley, who hadLeukaemia, whether she would disclose her illness at work, she responded initially:

Shelley: I don't tell anybody because I guess they don't have a need to know. Ifeel they don't need to; it doesn't make me any different a person and I've found thatin a lot of ways people tend to treat you differently if they know (Shelley #1, p. 3).

and, yet, moments later she admitted:

Shelley: I guess in a way they had a right to know if one of their staff, I meanwe all work as a team so, in that respect, maybe --. It's probably better that they didknow so that when I came back [from hospital] they were aware, to sort of help mewith things that I couldn't do. The lifting and stuff like that (Shelley #1, p. 4).

This theme of ambivalence, fracture – a heterogenic life – was a regular feature in thestories – mine and theirs. It is no accident that notions of ambivalence and fear resonatedwith me. I recall having to visit my neurologist as my own symptoms worsened.

Finally, last week, I admit defeat. Both of my feet are without feeling; my right handis feeling strange, thick, as if it doesn't belong to me; and my speech is becomingincreasingly tortuous and jumbled. If I continue to ignore this any longer I willshortly not be able to drive the car or sign my own name; reasonably importantfunctions in most people's lives, mine being no exception ....

A brief consultation with the Neurologist confirms that treatment is recommended. A"pulse" of Prednisone will be administered intravenously as an outpatient at thehospital.

Well, the rather euphemistically named "pulse" of prednisone actually had one ortwo short term ramifications as well. Since commencing the treatment at thehospital, I have been extremely nauseous, turned yellow, then grey, felt significantpain all over my body, and had palpitations and hot flushes. My face has swelled uplike a balloon (as, to my dismay, did the rest of my body), and I have been unable todo anything that meant remaining awake or getting out of bed. As the days passed Ialso saw my vision go blurry and my thought processes becoming increasingly fuzzy.Stringing a coherent sentence together has become something of a challenge. I alsonoticed an uncharacteristic aggression for the days following the treatment andwhat I could only describe as general and complete debilitation...

As I write this, however, the first concentrated effort I have managed since enteringthe hospital five days ago, I can feel my toes, intermittently, for the first time in six

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months. I feel an irrepressible and ridiculous sense of optimism (Vickers 2001, p. 72-73)

Chaos NarrativesThe chaos narrative conveys the feeling that no one is in control (Frank 1995, p. 100) – acentral feature in my recollections of my own troubles at the time and in the stories that Iwas collecting. The chaos narrative is always, at some level, lacking in speech; it is beyondspeech. Note what is not said in the passage that follows. I had asked Fred about how he felttalking to colleagues at work who also had cancer:

MV: OK, so there were the three of you that all had this, and you talked.So, dare I ask, how did you feel when the fellow with the bone cancer passed away?Fred: Oh, I feel very sad for Peter, but you could sort of see it. I was lucky.Why, I don't know. The same as Beryl. Beryl, you know, the doctor said the samething with her. She was very, very lucky as well, you know. Poor old Peter, youknow, everything sort of came on him out, sort of, out of nowhere, sort of thing. Youknow what I mean, and he was being treated for, oh God, he was havingchemotherapy actually, which is pretty rough stuff. But nothing seemed to have beenworking. And I had a feeling then, you know, he just kept on saying, "Well, they'vegiven me all this treatment and nothing's happening. And I seem to be getting painsover more parts of my body than where I had it before," and all this and I thought,"Oh jeez." You know, you sort of, when I was in, when I was getting radiotherapy,you go in every day and there's a room. You have about [pause, deep exhale] fifty orsixty people in there every day, doing the same thing. Everyone had cancers.Women, kids, boys, girls, men, young, old. Look honestly, no discrimination, youknow? Little babies. And you saw all these people with these red crosses over them,you know what I mean, and that's where they were getting zapped with theradiotherapy, or whatever, because they all had cancers, whether it was braintumours, or throat, you know, all over the place. And [pause], and you get to tell theones that are not going to be around for, for too long, because you could see it in thecolour of them. You know, they just go a shocking yellowy type of colour. And yougo in there and all of a sudden you don't see them there, and the nurse will say, "Ohlook, so-and-so, blah blah blah, she died, or he died, or whatever". The saddest partwas little kids that never really have the opportunity to live. And that was the hardestpart, you know.MV: Did you dwell on that, when that sort of thing happened? Did youthink about it?Fred: Oh, I always thought, you know, that possibly, "I'm going to be next,or - ", you know. I think everyone felt the same way, because we'd sit around andhave a chat in the hospital as well, and you'd think "Oh, God." You know? (Fred #1,p. 19-20).

Readers should be aware at this point that, whilst Fred did survive, Linda and Shelley didnot.

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Implications for Organisational Analysis: The Way Forward

What I conclude with is an acceptance of Flax's (1990) underscoring of the need to think infragments. Flax (1990) suggests that we should not shy away from difficult questions, butthat in addressing them, they allow us to glimpse troubles lying beneath. To take this a stepfurther requires hearing – really hearing – chaos narratives, such as those presented here.This helps by acknowledging the experiences of others, by transferring what might normallybe viewed as solely a difficult and negative fate into a positive experience, and byreinstating the voice of wounded storytellers. The ill person who turns illness into storytransforms fate into experience (Frank 1995, p. xi). Those that listen to the story face thehorror of the person who has experienced it, and allow them to move forward. An approachto organisational life that reflects the values espoused here – diversity, openness to multiplevoices, inclusion, flexibility, respect (Gillepsie and Meyer 1995, p. 29) – is not always easy.However, remaining with the difficult questions, opening up the discussion, and acceptingand reinstating the voices of those with less than perfect organisational experiences canmove us towards a more just working environment.

References are available upon request.

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Case Analysis Online: A Strategic Management Case Model

Anne M. WalshLa Salle University

Eithne BeardenLa Salle University

Abstract

Integrated digital networks and teleconferencing will enhance strategic analysis inthe health care industry. Despite the plethora of tools available to supportstrategic decisions in the health care sector, the challenge for most executives inthe next decade will relate to their ability to manage technology and interpret datafrom multiple networks. Integration of a virtual case analysis model in a strategicmanagement course in health administration is presented.

Keywords: Technology, Strategic Management, Case Analysis

Internet Applications In The Health Care Industry

A Pew Foundation study of the "Internet and American Life" recently discovered thatover 55 percent of adults used the internet to search for medical information. A similarstudy released by the Kaiser Family Foundation found more adolescents and young adultsuse the web to access health information than to shop for products online (Carey, 2001).While topics related to sexual health, weight control, and mental health were dominanthealth issues for adolescents, many patients increasingly rely upon the internet to managechronic conditions such as diabetes and hypertension(Larkin, 2001). Often these healthrelated sties provide not only medical information, but support groups for patientsconfronting similar medical conditions(Chyna, 2001).

Physicians are also increasingly using internet technology to access patient informationas well as coordinate patient care(Kelly, 2001). Electronic medical records andprescribing systems have already demonstrated the potential to increase the efficiencyand quality of care delivered to patients in both hospitals and ambulatory care facilities.Moreover, teleconferencing and second generation internet systems will allow virtualsurgery to become a common practice in most health care systems while mobile homemonitoring systems supported via wireless applications will enhance the ability tomanage the care of patients with chronic conditions(Colwell, 2001).

Managed care organizations are also embarking on e-business solutions to enhanceprovider relationships as well as market share objectives. New provider interfaces can be

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used to enroll new members online as well as to promote routine interaction between anMCO and network providers(Boyd, 2001).

Pedagogical Approaches In Strategic Management

Case analysis is also extensively used as a pedagogical method in many strategicmanagement courses. Thomas(1998) believes that the case method “captures the impactof complex factors which influence strategic decisions.” Other benefits such as enhancedcommunication, leadership, and decision-making skills are also associated with casemethod analysis(Osigweh, 1989). Case analysis, however, typically provides aretrospective review of an organization, and may not capture an accurate view of thecurrent strategic direction of the organization. .

Despite the plethora of methods and tools available to support case analysis, thechallenge for future managers in the next decade will relate to their ability to interpretdata from multiple and intricate communication networks (Berkeley et al, 1996).Integrated digital networks and satellite systems will expand the scope of sharingtranscontinental information between business divisions, and networked systems andteleconferencing will facilitate the use of “virtual cases” across universities. Raymondand Mc Nabb(1993) believe that universities have an obligation to insure that students areprepared to manage the technology that will enable them to compete within emergingmarkets.

Mc Kinney and Yoss(1998) argue that these pedagogical environments should bestructured as systems that support “learning to learn” objectives. These environments arestudent rather than faculty centered and are based upon interactive class exercises ratherthan traditional class lectures. Opportunities to synthesize information and apply newconcepts are tailored to their unique learning styles of the students in the course.

Case Analysis Online

Cohen and Lippert(1999) argue that technology should be organized as the vehicle toenhance learning and should not be construed as a panacea for integration.Consequently, a key goal in designing the syllabus was to create a virtual case model thatwould expose students to electronic systems while concurrently influencing their researchapproach to strategic analysis in the future.

The Strategic Management course is the introductory graduate course for studentsenrolled in the MBA in Health Administration at La Salle University. Over ninety percentof the students in the Health Administration program are employed on a full time basis,and all of the students in the course had access to the internet via their employer.

Prior to designing the course, the reference librarian, responsible for electronic andnetwork systems at the university, and the faculty member met to review the strategicmanagement topics and electronic databases that would be included in the course. Forthe past several years, a standard strategic management text " Strategic Management of

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Health Organizations" by Peter Ginter, Linda Swayne, and W. Jack Duncan has beenused as the graduate text for the course. Power point modules have been designed for theentire course and are used to illustrate key strategic management concepts such asindustry analysis and strategy formulation. These power points modules integrateconcepts in the text, and are designed to augment cases from the text which are focusedon discrete industry sectors such as acute care, ambulatory care, or long term care.

The Virtual Case Model

Universities have implemented a variety of methods to facilitate technology integration inthe strategic management course. Brace & Koenig(1989) describe the use of an electivecourse to augment research skills in a course in a business school while Prince, Helmsand Haynes(1993) describe the integration of library instruction in their business strategycourse. While there are various pedagogical methods to use in case analysis, the virtualcase model was designed to enable students to access technology to enhance strategyanalysis in the future.

During the initial review of the strategic management syllabus, several electronicresources were selected for the course. Since case analysis initially involved an analysisof current and historical information on a specific organization, Proquest and First Searchwere selected as the standard electronic resources for the course. These databases includecurrent newspaper articles, industry trade publications, as well as referred articles relatedto strategic management.

Next, specialized electronic databases such as Nexis-Lexis that have a direct link toDisclosure were identified to support case analysis for public firms. Since Disclosure iscomplied from SEC documents and contains financial information on virtually all publiccompanies in the United States, company data on pharmaceutical firms such as Merck orhealth systems such as Health Corporation of America, can easily be obtained from thisdatabase. Other electronic resources such as Hoover's(www.hoovers.com),Wall StreetResearch(www.wsrn.com), and Morningstar(www.morningstar) were also used ascomplementary industry and competitive resources.

Since the majority of organizations in the health care industry are non-profitorganizations, a key challenge in developing a virtual case model is to select electronicresources that are comparable to those in the public sector. Since comparable electronicSEC documents were not available, several standard printed references includingPlunkett's Health Care Industry Almanac and the Encyclopedia of American Industrieswere selected to augment electronic industry references. These references not onlyprovide solid industry data but they also capture external trends and key competitorswithin the health care industry. Trade references such as Hospital Statistics as well as theAHA Guide to United States Health Systems, Alliances and Providers were also selectedas supplementary print resources for the course.

In contrast, comprehensive data on financing, disease management, and quality initiativeswere available through federal agencies such as the Centers for Medicare and

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Medicaid(www.hcfa.gov), the National Institute for Health(www.nih.gov), and theAgency for Health Services Research and Quality(www.ahcpr.gov). The Department ofHealth and Human Resources(www.dhhs.gov) also provided a pivotal electronic resourcewith links to other federal agencies such as the Centers for Disease Control and the Foodand Drug Administration Agency.

Trade web sites from the Health Insurance Association(www.hiaa.org) and thePharmaceutical Industry(www.pharma.org) also detailed emerging industry trends,expenditures and key competitors in their respective sectors. Other web sites such as www.intellihealth.com. a partnership between the Harvard Medical School and Aetna,were also selected due to range of disease management and consumer health informationprovided via their web page. Although internal data on public firms was more readilyaccessible via company homepages, comparable data on regional firms was augmentedvia regional newspaper links or through the Financial Times(www.ft.com) whichprovides links to most regional newspapers in the United States.

Since all of the students enrolled in the course were employed on a full time basis, amodularized approach was used in designing the virtual case model. Power pointmodules and case questions were developed for all of the strategic management conceptsdelineated on the course syllabus. Students were able to download these modules via theuniversity server or through their personal e-mail prior to the class in order to review theconcepts prior to the class discussion.

The introductory class session was scheduled in the computer lab, which was adjacent tothe student classroom. This session was designed to review learning objectives for thecourse, and to expose students to the electronic resources that would be used for thevirtual case model. Since case analysis is often a sequential process, opportunities toreinforce concepts developed in previous modules occurred on a routine basis. Althoughconcepts related to competitive analysis were analyzed in third class session, for example,questions on this topic were included in subsequent cases discussions to encourage theuse of previous online resources to develop solutions. The bi-weekly seminars offered anopportunity to reinforce concepts from the previous case discussion while concurrentlyintroducing new concepts via the related power point modules and electronic resources.The university homepage(www.lasalle.edu) also provided a link to electronic resourcesthat were tailored to the strategic management syllabus.

Technology And Case Analysis In The Future

Although virtual case models can be easily integrated into most class environments, therewere several infrastructure supports that facilitated the implementation of this model.Recent renovations within the School of Business created "smart classrooms" that wereequipped with internet access and software that supported power point instruction in theclass. An adjacent computer lab also provided ample space for students to work on theirteam projects and case analysis. Technological support for this system was also availabledirectly through the information technology department that was located in the same

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building. Although few technology problems emerged during the course, access to thestaff was instrumental in resolving minor system problems.

Collaboration with reference faculty of the university library also ensured that printedmaterials were available to support electronic resources. Since the online referencelibrarian collaborated with faculty on the development of electronic resources prior to theintroduction of the virtual case model, there was ample time available to identifyadditional refereed and trade journals to support cases analysis. Students also consultedwith the reference librarian on a routine basis on references related to case analysis, andfrequently used printed references to supplement their online research.

Although many strategic management publishers are in the process of developing webbased resources, most have not incorporated a virtual case model for case analysis.Ventures with academic and professional organizations can also be formed to expand therange of electronic resources for case analysis. Publishers can develop interactive sitesthat link students directly with an organizational homepage and provide a list ofassociated links to explore related strategic management concepts.

University consortiums can also be developed to examine strategic management issues inthe health care industry. Tele-conferencing as well as "chat rooms" can be used to linkstudents at various universities as well as to invite industry experts to participate in thecase discussion. These consortiums can also provide an incubator for developing futurecases and examining current issues in a dynamic industry.

References

Brace W. & Koenig, M (1989). Providing Information for and to Business Students.Education for Information, 7, 343-354.

Carey, B.(2001). Internet: Many Young People Surf Net for Health Data. The LosAngeles Times, 3.

Cohen, D & Lippert, S.(1999). The Lure of Technology: Panacea or Pariah? Journal ofManagement Education, 23(6), 743-746.

Collwell, V. J.(2001). Healthcare's Fast Future. Health Management Technology,22(10):67-68.

Kelly, J.(2001). What Area of Internet Holds the Most Promise. Hospitals and HealthNetworks

Kolb, D. A.(1985). The Learning Style Inventory: Technical Specifications. Boston:McBer and Company.

Larkin, M.(2001). E-Health Continues to Make Headway. The Lancet, 358: 517-520.

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Osigweh, C. A.(1989). Casing the Case Approach in Management Development. Journalof Management Development, 2, 41-57.

Prince, W. W., Helms, M. M., Haynes, P.L.(1993). Project Focused Library Instruction inBusiness Strategy Courses. Journal of Education for Business, 68(3), 179-183.

Raymond, M. A & Mc Nabb, D. E.(1993). Preparing Graduates for the Workforce: TheRole of Business Education. Journal of Education for Business, 68(4), 202-205.

Shrivastava, P. (1999). Management Classes as Online Learning Communities. Journal ofManagement Education, 23, 6, 691-702.

Thomas, A (1998). The Business Policy Course: Multiple Methods for Multiple Goals.Journal of Management Education, 22(4), 484-497

WEB REFERENCES:

HEALTH CARE ON THE WEB

AGENCY FOR HEALTH CARERESEARCH AND QUALITYwww.ahcpr.gov

Online summary of recent research findngsfunded via AHCPR, quality assessment,and government grants.

AMERICAN PUBLIC HEALTHASSOCIATIONwww.apha.org

Public Health links to state and localpublic health departments in the nation,advocacy groups, and pending legislation.Go to Research Link to find additional websites for childrens health, mental health,and prevention.

DEPARTMENT OF HEALTH ANDHUMAN SERVICESwww.dhhs.gov

Excellent resource with links to other keyagencies such as Centers for DiseaseControl, Food and Drug Administration,etc.

HARVARD/AETNA: INTELIHEALTHwww.intelihealth.com

Partnership between Aetna and HarvardMedical School includes Consumer HealthInformation,Diseases and Medical Conditions, andDrug Resource Center which providesdescription of brand and generic drugs.

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HEALTH CARE FINANCINGADMINISTRATIONwww.hcfa.gov

Centers for Medicaid and Medicare.Information on government plans andproviders, medicare managed care, andpayment systems for governmentalprograms.

HEALTH INSURANCEORGANIZATIONwww.hiaa.org

Research link on this web site providesdata on health care expenditures, privateinsurance coverage, and federal statistics.

MEDSCAPEwww.medscape.com

Includes consumer health topics,professional speciality information, as wellas the NCQA Health Plan Report Card.

NATIONAL INSTITUTES OFHEALTHwww.nih.gov

Related links to Institutes and Centersincluding asthma, cancer, etc. Consumerhealth Publications and Fact Sheets areavailable online for specific diseases andmedical conditions.

NATIONAL LIBRARY OF MEDICINEwww.nlm.nih.gov

Comprehensive medical research resourcewhich includes medline(health and medicalresearch), dirline(directory of healthorganizations), as well as researchprograms.

PHARMACEUTICAL INDUSTRYwww.phrma.org

Includes the Industry Profile for 2001,global health information, new drugs andemerging trends, and financial data on theindustry.

UNITED STATES CENSUS BUREAU:HEALTH INSURANCE DATAwww.census/gov/hhes.

Includes statistics from the CurrentPopulation Survey and from the Survey ofIncome and ProgramPartcipation.

FINANCE ON THE WEB

EDGARwww.sec.gov

Provides annual reports filed by publiccompanies. Free links to all filings and hasproposed and final SEC rulings.

FINANCIAL TIMESwww.ft.com

Search by industries, companies, globalmarkets, and news. Current health carenews includes information on new drugs,

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acquisitions and mergers, and trends.

FINANCIAL TIMESHOOVER'Swww.hoovers.com

Subscribe for information. Information onover 2, 600 public and private companiesincluding company history, competitors,and links to company homepage.

MORNINGSTAR FINANCIAL NEWSwww.morningstar.com

Provides financial news, company financialdata, as well as market analysis.

PRARSwww.prars.com

Public Registers Annual Report Servicewhich provides online ordering service forannual reports for companies.

WALL STREET RESEARCHwww.wsrn.com

Company information includes earningsinformation, competitor data, and currentcompany news as well as current nationaland international news.

GENERAL REFERENCES

LEXIS-NEXISwww.lexis-nexis.comLIBRARY HOME PAGE

Links to health, law, and business availablein text or abstracted format. Business linksinclude Disclosure, SEC filings, andindustry and market news.

PROQUESTwww.proquest.comLIBRARY HOME PAGE

Search company name, product name, aswell as by publication for industry,company, and recent trends.

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STANDARD REFERENCES

HEALTH CARE REFERENCES

AHA GUIDE TO UNITED STATESHEALTH SYSTEMS, ALLIANCESAND PROVIDERS

Statistical information with data onsystems, beds, admission, outpatient visits,births.

BEST OF HEALTH:DEMOGRAPHICS OF HEALTHCONSUMERS

Trends in consumer behavior, purchasepatterns, as well as statistical information

DUN AND BRADSTREET/GALEINDUSTRY REFERENCE BOOKS:HEALTH &MEDICAL

Information on companies, associations,trade groups in the health care industry.

HEALTH CARE FINANCINGREVIEW: MEDICARE ANDMEDICAID SUPPLEMENT

Annual overview of Medicare andMedicaid statistics including glossary ofterms.

HEALTH OF NATIONS:INTERNATIONAL HEALTHREFERENCE

Comparative Analysis of Health Systemsincluding global organization andfinancing.

HOSPITAL STATISTICS: ANNUALREFERENCES

Comprehensive source for analysis andcomparison of hospital trends. Providesstatistical information for the United States,state information, and census data.

PORTRAIT OF HEALTH IN THEUNITED STATES: STATISTICALTRENDS

Includes charts, maps, and text describingthe health care systems well as a guide toweb resources.

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PLUNKETT'S HEALTH CAREINDUSTRY ALAMANC

Specific focus on the health care industry.Includes trends on medical industrygrowth, hospital utilization, andtechnology.

GENERAL BUSINESS REFERENCES

ENCYCLOPEDIA OF AMERICANINDUSTRIES

Major business reference tool that providesdetailed information on a wide range ofindustries. Includes industry snapshots,industry organization and structure, andindustry leaders.

ENCYLOPEDIA OF GLOBALINDUSTRIES

Reference source that chronicles thehistory, development and current status of115 industries. Includes industry snapshots,and work force trends.

MOODY INDUSTRY REVIEW Resource provides comprehensivestatistical operating data and ratios forapproximately 3,500 companies.Information includes comparativeinformation on industry groups.

STANDARD & POOR'S INDUSTRYSURVEYS

Surveys provides extensive information onhow to analyze an industry, industryprofiles, and industry buzzwords.

COMPETITOR DATA &COMPARATIVE COMPANY DATA

BUSINESS RANKING ANNUAL Data are complied from a variety ofdirectories and periodicals. Includes dataon companies, services, and products.

ENCYLOPEDIA OF CONSUMERBRANDS

Provides information on products that aremarket leaders in their brand categories.Products are broken down into threecategories including durable, consumable,and personal.

MARKET SHARE REPORTER Market Share Reporter provides an annual

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compilation of reported market share data.Include institutional, brand and productcategories.

WORLD MARKET SHAREREPORTER

Data on private and public sector globalfirms includes brand, product, and marketshare for various companies.

COMPANY DATA

DISCLOSURE: CD/ONLINE Provides balance sheet, income statement,key ratios on public companies.

INTERNATIONAL DIRECTORY OFCOMPANY HISTORIES

Detailed information on the developmentof most influential companies withdirectory data on each company.

HOOVER'S HANDBOOK OFAMERICAN BUSINESESSHOOVER'S HANDBOOK OF WORLDBUSINESS

Hoovers's is also available online as well asthe standard reference editions. Profiles ofnational and internatinal firms that includecompany profiles, competitor data, andfinancial data.

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INFUSION PLUS!A Synergistic Approach to E-Business Education

Frederick D. Greene*Management/Marketing Department, Manhattan College School of Business

James G. WhelanManagement/Marketing Department, Manhattan College School of Business

Abstract

The fact that E-business has arrived is well accepted as we see it all around us.While one might debate whether the change to E-business is evolutionary orrevolutionary, there is agreement that it does have sufficient significantimplications to warrant inclusion in the business school curriculum. But is therean adequate body of knowledge to justify offering a degree program with majorsand/or minors with appropriate research requirements and faculty coverage, orshould a certificate program be offered which does not have such rigorousstandards yet does recognize pragmatic trends? While such questions raiseimportant issues and each approach can be justified, an alternative, synergisticapproach is developed that we call “Infusion Plus!”

Keywords: E-business education, business school curriculum, business technologyinnovations and applications, curriculum development

Introduction

As we consider the conference theme of “Recovery, Renewal, and Reconsideration,”major attention has to be given to the fact that the electronic age is upon us. Morespecifically, that E-business has arrived is well recognized. We see it all around us: whenyou purchase a book from Amazon.com (Business to Consumer or B2C); whentransactions occur online between companies (Business to Business or B2B); when onesells a used car to someone else via Internet (Consumer to Consumer or C2C); whenutilizing the computer to sell your consulting services to a company for a fee (Consumerto Business or C2B); when registering for courses using a college website with the latestcourse information (Nonbusiness EC); and monthly sales data is electronically posted foremployees’ information (Intrabusiness (Intraorganizational) EC) (Turban et al 2000,p.11). What is not well recognized is the degree of impact this relatively newphenomenon will have on society. Many have argued that E-business represents asignificant change that will impact every aspect of society. On the other hand, theargument is made that E-business is not a radical change but rather an evolutionarydevelopment from bricks and mortar to an Internet strategy (Porter 1999).

While this debate continues, there is one area of agreement. E-business does havesufficient significant implications to warrant inclusion in the business school curriculum.

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But this inclusion raises a series of other considerations as to how such a concept shouldbe addressed in the classroom. For example, is there an adequate body of knowledge tojustify offering a degree program with majors and/or minors with appropriate researchrequirements and faculty coverage, or should a certificate program be offered which doesnot have such rigorous standards but yet does recognize pragmatic trends? While suchquestions raise important issues and each approach can be justified, we suggest analternative approach that addresses the same inquiries and yields a more compatibleseries of responses. We call this alternative approach “Infusion Plus!”

Before continuing further, it will be advantageous to clarify our terms. First, E-commerceand E-business are often used interchangeably (Turban et al, p. 5). E-commerce tends tofocus on electronic exchanges of goods and services. Technically, E-business is a morecomprehensive term as it incorporates all the elements of E-commerce and then expandsits parameters to include such areas as e-franchising, e-mailing, and e-marketing. IBMdefines E-business as “a secure, flexible and integrated approach to deliveringdifferentiated business value by combining the systems and processes that run corebusiness operations with the simplicity and reach made possible by internal technology”(Amor 2000, p. 7). According to Lou Gerstner, former IBM CEO, “E-business is allabout cycle time, speed, globalization, enhanced productivity, reaching new customersand sharing knowledge across institutions for competitive advantage.” (Turban et al2000, p. 5) Consequently, we will be using the more comprehensive term E-business.

Educational Considerations

In introducing new pedagogical material, consideration must be given to some standardof academic appropriateness. An E-business program that meets the standards foraccreditation by AACSB International – The Association to Advance Collegiate Schoolsof Business (AACSB) - must: a) be interdisciplinary, offering a broad-based managementeducation, including information systems, telecommunications, marketing andeconomics; b) offer specialized coursework in areas specifically related to concepts inelectronic business or electronic commerce; and, c) have a connection to the business unitand AACSB affiliation, meaning that it must be taught in the academic unit responsiblefor management education. (AACSB (n.d.) 1)

Under the guidelines of the AACSB the basic requirements for a bachelor’s degree majorin E-business are that the curriculum will “combine general education and the basicstudy of business.” Additional knowledge is expected in accounting, behavioral science,economics, mathematics, and statistics. The courses more specifically designed for thestudy of E-business are to be taken in the last two years of the college program, with onlya limited amount of work prior to the junior year. (AACSB (n.d.) 2)

There seem to be two courses of action that have been taken by undergraduate schools.(Predmore & Khelfaoui 2000) Either an E-business focus is offered in a degree program(as a major, part of a double major, or a minor), or a certificate program. A certificateprogram is more applied in nature than a degree program. The outcome of the certificate

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is to certify that a person has a specific knowledge about that topic, whereas the degree isconcerned with a more comprehensive, multi-disciplinary course of study. In keepingwith its applied orientation, instructors in certificate programs tend to be practitionersrather than academics. Usually there are no prerequisite courses or admissions tests forstudents other than their desire to take the classes and their motivation to do theclasswork as indicated by registering for the course. Degree programs, on the other hand,have courses that must have theoretical underpinnings; have academically qualifiedinstructors who have taken courses and/or do research in the areas of business that theyteach; student prerequisites; and the added value of a well-rounded education. (Predmore& Khelfaoui 2000)

The “Infusion Plus!” Approach

The discussion so far has focused primarily on degree or certificate programs introducingE-business concepts into higher education curricula. Some plans have represented wellthought out proposals, although at times very narrowly focused and self-serving whileother proposals represented more of a “flavor of the month” or “jumping on the bandwagon” faddish approach. On the other hand, given the rapidity, Internet time versus realtime, with which events are happening in regard to E-business, there might be somerationale to spur-of-the-moment thinking as opposed to the detailed proposals debated byacademics. We propose an alternative approach that “accents the positive and minimizesthe negative” aspects of the previous approaches. We call this synergistic approach the“Infusion Plus!” approach.

As developed in this paper, an alternative approach for schools of business to meet thechallenge of E-business is to follow an “Infusion Plus!” strategy. Building upon amethodology that was frequently pursued in the initial introduction of InternationalBusiness curricula, the “Infusion Plus!” approach integrates E-business concepts into allfunctional courses as needed. The “plus” allows for the development and implementationof one or more courses in each functional discipline as desired. If the need and demandwarrant, these specialized courses could be linked together for a major, a double major,or a minor.

Table 1 identifies the basic stages involved in implementing an “Infusion Plus!” strategyfor introducing E-business concepts into the curricula.

Table 1 Stages of The “Infusion Plus!” Approach for E-businessStage I – Introduce E-business concepts into functional coursesStage II – Establish required E-business courses for all business studentsStage III – Develop E-business courses within each function or major as appropriateStage IV – Identify courses for an E-business minor or second majorStage V – Recognize E-business majorStage VI (optional) – Create E-business Center or Institute

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Stage I – Introduce E-business Concepts Into Functional CoursesThe concept of E-business has become so pervasive today that any knowledgeableindividual should be familiar with at least the basic concepts of E-business. For example,consumers can purchase books, airline tickets, gifts, or groceries, comparison shop whenbuying a car, perform financial transactions such as pay bills and trade stocks, on line.Also, students can improve their research capabilities by giving them access toinformation from around the world, 24/7. If such capabilities were not achieved, atremendous disservice would be done to both the well-rounded student and potentialemployers who expect to be joining the E-business evolution.

Stage II – Establish Required E-business Courses For All Business StudentsAs concepts and practices evolve, splintered functional bits and pieces that may resultfrom Stage I could warrant an introductory core E-business course required of allbusiness students. Some of the topics that may be addressed are: foundations of Internetbusiness; marketing and the Web; electronic payment systems; E-business legal issues;economic, global and other issues in E-business.

Stage III – Develop E-business Courses Within Each Function As AppropriateContinuing with the development of E-business concepts and practices, it is very likelythat within each functional or major discipline, specialized courses may be developed,such as “Accounting for E-businesses”, “The Economics of E-business”, “Financing theNew E-business”, and “Applications of E-business to the Global Economy”. Adepartment and/or school curriculum committee should evaluate the appropriateness ofsuch courses.

Stage IV – Identify Courses For An E-business Minor Or Second MajorAs courses on E-business develop within functional majors, it will become possible toidentify a sequence or combination of courses to warrant a minor in E-business. A minorconcentration can consist of between three and five courses in the specific area of study,as deemed necessary by the curriculum committee. A second major is possible after therequirements for the primary major are fulfilled, and it may be comprised of specifiedcourses from various disciplines. Generally, a second major would require at least fivecourses in the E-business field of study.

Stage V – Recognize The E-business MajorUltimately, the field of E-business will expand to the point where it will have developed,both in theory and practice, a body of knowledge that will warrant a major field of studyin its own right. Recognition of an E-business major both institutionalizes and legitimizesthis area of study. Faculty scholarly research and intellectual contributions are fostered,and student exposure and experience with “cutting edge” changes are enhanced.

Stage VI (optional) – Create E-business Centers And InstitutesWhile Stages I through V have been developed sequentially in our model, there is anotheraspect or dimension to the introduction of E-business education that may occur initially,simultaneously, or as a final step in the sequence: the creation of an E-business Center or

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Institute. Centers/Institutes are university-based entities that have a “research,instructional and/or outreach mission in the area of electronic business or electroniccommerce.” (AACSB, 2000 Web site). The Center/Institute can be simple (narrow scope)or complex (multi-faceted) consistent with its existing or anticipated expertise. In someinstances, schools have sought external funding for these activities through corporatesponsorship. In other instances, government or other non-profit grants have provided theseed money needed to start initial activities in E-business, and in some cases havereceived further money to broaden their existing operations or expand into other areas ofE-business.

The Centers/Institutes can also provide a mechanism for generating a spirit ofcooperation between the various schools of a college. For example, a situation could existwhere the electrical engineering department could be called upon for their technicalexpertise. The idea of one department drawing on the resources of another part of thecollege tends to maximize resources. Besides joint research opportunities, theCenters/Institutes also can provide opportunities for students to obtain “real world”experience through laboratories in which simulations can be conducted and/or smallbusiness/entrepreneurship projects in which students and faculty work with a businessowner.

Summary And Conclusions

The forgoing model provides a logical and systematic procedure by which the E-businessphenomenon and its concepts could be incorporated into business school curricula. Thesequential stages presented represent a conceptual framework that allows fordevelopment of the field. The particular order of steps need not be followed exactly in allinstances as a standard operating procedure, but the essence of each preceding step mustbe considered before introducing a subsequent step. What is being proposed is anevolutionary pattern of development for what some consider to be a revolutionarychange. The “Infusion Plus!” model is intended to achieve synergistic outcomes ratherthan chaotic changes.

References

AACSB (2000) Web site, http://www.aacsb.edu/E-usiness/ctr_inst.html RetrievedSummer 2001.

AACSB (n.d.)1, E-Business Education, http://.aacsb.edu/e-business/index.html RetrievedSummer 2001.

AACSB (n.d.)2, E-Business Education, http://.aacsb.edu/e-business/Bachelors degreemajors Retrieved Summer 2001.

Amor, Daniel. The E-business (R)Evolution by Hewlett-Packard Co., 2000 (UpperSaddle River, NJ – Prentice-Hall).

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Porter, Michael E., “The Net Won’t Transform Everything”, Inter@ctiveWeek, October25,1999, http://ecommerce.ncsu.edu/tpoics/netcentrism/net.html Retrieved July 2,2001.

Predmore, Carolyn E. and Khelfaoui, S.E., (2000) “e-Commerce – Certificate versusDegree Programs; Which Should A College Choose?”, unpublished manuscript,Manhattan College.

Turban et al, (2000) Electronic Commerce; A Managerial Perspective, 2000 (UpperSaddle River, NJ – Prentice-Hall).

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Retention Strategies And Worker Values

Jean GordonSt. Thomas University

A funny thing happens when you take the time to educate your employees, paythem well and treat them as equals. You end up with extremely motivated andenthusiastic people.

- Kip Tindell, CEOThe Container Store

Organizations increasingly encounter difficulties in recruiting and retaining top talentbecause they have yet to deal with today’s most critical human resource issues. Toremain competitive, it is necessary to create a talent-powered company consisting ofhighly motivated, skilled and loyal employees. Talent-powered companies not onlyrecruit the best, they also retain the best through several employee-centered strategies.

Retention is a serious issue for many companies as HR experts say that probably thosesame managers/companies are to blame for their own worries. Forget money and stockoptions, or the lavish perks that so much of corporate America has enjoyed in recentyears. One way to retain prized employees at a time of skilled labor shortages is to getmanagers to take responsibility for retaining their best people.

John Sullivan, San Francisco State University’s head of the Human ResourcesDepartment, and adviser to corporate giants such as Microsoft, Nike and Schwab, suggestthat HR take an active rose in facilitating solutions to company managers. Among hissuggestions are that managers meet with their employees to discuss workplace concernsand possible solutions.

A talent exodus can also be crippling to a troubled company. Retailers, for example,have been plagued by the problem for years. When Federated Department Stored, thethen-present of Bloomingdale’s and other store chains, found itself in financial trouble inthe early 1990s, it lost 25 percent of its workforce. When a company’s financial fortunessuffer, management used to keep the best employees and lay everyone else off.Nowadays, they no longer get to do that. Instead, when things get rough, managementhas to worry about losing the best people. Sometimes what is a short-term financial crisiscan evolve into a long-term downturn, hence having an exodus of best employees.

In July 2000, Izzo Consulting, a San Diego, California based consulting company,reviewed numerous retention large studies, including those by Gartner Group, Fortune,Wyatt International, and identified the key reasons for employee departure. Those are (1)lack of recognition; (2) inequities of salary; (3) long-term sense of purpose and missionare missing; (4) insufficient opportunities for professional and career development(promises may not match reality)

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Based on the above, it is valid to say if you are able to identify what employees value,then you have the key to building a retention strategy that does not rely solely onfinancial benefits. Pam Withers, on her article “Retention Strategies that Respond toWorker Values” claims that the shortage of skilled labor will reach crisis points by 2005,whether the economy slows down or not. Withers offers six strategies for increasingemployee retention, including self-assessment tools for measuring an organization’sability to meet employee needs, developing employees and partnering with them.

Be proactive in offering employees a better work/life balance

Workers today are willing to sacrifice twice as much pay to achieve work/life balance.Employees 18-34 years of age say the option of taking extended leaves or sabbaticals is akey workplace benefit.

Promote a sense of a deeper cause

Today’s workers need to be more motivated that a company’s bottom line. Firms with asense of social responsibility clearly manifested in their mission statements are moreattractive to employees. A good loyalty-builder is allowing employees to volunteer in thecommunity on company time.

Offer opportunities for professional growth and development

Employees seek both personal and professional nourishment. Successful companiesspend 7 to 10 percent of their payroll on training, compared to the standard 2 to 3 percent.

Treat employees more like partners

Workers today are no longer satisfied with empowerment. They want a sense ofownership. They expect to make suggestions regardless of age or rank, and work in anenvironment free of rigid hierarchy. But most importantly, they want regular feedback.Workers want to know that their opinions count.

Help workers find community in the workplace

Workplaces that proactively accept the mantle of community building by creating moreopportunity for interaction will experience higher retention. Companies are changinginto community centers, with recreational facilities and programs aimed at buildingcommunity spirit.

Start rebuilding trust

This is a more intangible and harder to accomplish of all these six strategies. Workerssay that entrenched hierarchy is one of the key barriers to rebuilding trust. One way to

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address the trust issue is by cross-training employees to ensure that people can keepworking during slowdowns.Trust can come crashing down in an instant, but it takes years to rebuild it. Key factorsas leadership, consistency and fairness, open talk about ethics can help rebuild this trust.

Employers are going to continue to experience tight labor markets and rising employeeexpectations in what they want in their employer-employee relationship.

The good news for employers is that even if employees now expect to change workplacesseveral times during their working careers, they still are prepared to give their all tocompanies they consider deserving. And management can do something about that!Strategies such as the ones mentioned before can provide the greatest return on humanresource and workplace-practice investment.

References

Dobbs, Kevin. (2001) Managers Matter Most. Workforce, April 2001, page 58. http://www.workforce.com/archive/articles

Koch Laabs, Jennifer (2001) Thinking Outside the Box at The Container Store. Workforce, March 2001, pp. 34-38. http://www.workforce.com/archive/articles

Withers, Pam (2001) Retention Strategies that Respond to Worker Values. Workforce,July 2001, pp 37-41. http://workforce.com/archive/feature/00/07/74/

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Management Development or Managing Illusion?Perceptions of Management Development Programs in influencing how Managers

take up their roles taking into account the contextual factor of politics inorganisations

Heather Russell-GaleSchool of Business, Swinburne University of Technology

Bill GaleW.D. Gale & Associates

Barbara LaskySchool of Business, Swinburne University of Technology

Abstract

Management development programs raise critical issues of context for managersin today’s rapidly changing world. Although organizations encourageparticipation in such programs as a matter of policy, the significant contextualfactors of organizational culture and politics are rarely addressed, either inpractice or the theory, within these programs. This paper reports on anexploratory study of a particular management development program, andconcludes that to design such a program, and to emphasize political contextualissues within it, is both challenging and problematic.

Introduction

Management training programs raise critical issues of context for managers who aredealing with the chaos generated by the increasing intensity of the continuous “waves” ofchange which have become the norm. In particular, the contextual factors oforganizational culture and politics have a significant impact upon a manager’s capacity todeal with that chaos. For several years now the focus in organizations has been onenhancing performance and increasing efficiency and effectiveness in order to compete atan international level, particularly in the Asia-Pacific region. Also in recent times, theAustralian Government has consistently attempted to encourage business enterprises tobecome more competitive at the international level, through a number of national agendaand policy reforms. Management academics, business leaders, unions and managementpractitioners alike have promulgated new ideas, systems, processes and procedures inareas such as customer service, quality assurance, continuous improvement, multi-skilling, semi-autonomous work groups, industry best practice standards, and balancedscorecard to name some (Ivanoff & Prentice, 1994: 8; Kaplan & Norton, 1996, 2001).Even with all these initiatives, there is, however, increasing acknowledgment that theenhancement of performance, and increases in efficiency and effectiveness will onlyoccur at an enterprise level if the managerial quality and capacity is available, and

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workplace learning promoted (Boud & Garrick, 1999). This is a vital factor in the“success” equation.

The Australian Government acknowledged this critical element through the establishmentof the Industry Task Force on Leadership and Management Skills. The main purpose ofthe Task Force was to make recommendations to the Government on the means by whichmanagerial and leadership skills of Australian managers might be developed, with theview to increasing capacity at the enterprise and national level, to enhancecompetitiveness within the Australian context generally but of more national andstrategic importance, at the international level (Ivanoff & Prentice, 1994: 8). Known asthe Karpin Task Force, the case was made for management skills to be recognized as acritical factor in economic growth and workplace reform, and internationalcompetitiveness. One of the major conclusions from the Karpin Task Force is that“managers learn best and fastest through being exposed to a variety of managementdevelopment strategies. But in particular, managers learn best at work” (Training &Development in Australia, 1995: 12). This view continues to be supported by currentauthors (Boud & Garrick, 1999; Seibert & Daudelin, 1999; Burgoyne & Reynolds,1997). Whilst these ideas provide conceptual frameworks from which managementdevelopment programs can be established, there has been little focus on consideration oforganisational contextual factors as important parts of any program. The authors herehold a strong belief that a manager must have certain innate abilities, as well as skills thatcan be learned through training and management development, and these skills shouldinclude political skills. It would be fair to say that in order to be able to manage oneselfin role, a manager must be able to “read” organizational culture and political systems, andhave a good understanding of “self” and what he/she brings to the role. Finding literaturewhich draws together how management development programs assist managers to takeup their roles more effectively, and gives due consideration to the contextual factors ofchange, organizational culture and politics, has proven to be challenging, however.

Management Development Programs - Contextual Factors

In some instances, it may be the case that management development is used as a vehicleto deal with the tensions between individual and organizational needs, and therefore toavoid critically examining organizational contextual factors and the individual’s capacityto take up a managerial role effectively within the organisational context.

Managerial RolesBailey, Schermerhorn, Hunt & Osborn (1986: 405) describe a role as ‘a set of activitiesexpected of a person holding a particular office or position in a group or organisation’.Stacey (1993) suggests that managers take up roles within the context of the formalhierarchy as well as in informal networks in organizations, the usual expectation beingthat she/he comes to the position with the requisite skills, experience, knowledge andpersonal style to be able to carry out the requirements of the managerial role. There isoften little mention of the capacity to manage within the organization’s culture andpolitical system. There is also a sense that the managerial role incorporates a willingness

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to promote and protect the organization’s culture, using the political system asappropriate, in achieving the organization’s mission and goals. It is assumed that themanager will have the predisposition to cope with these internal contextual factorsoperating in the organization (Stacey, 1993). Hirschhorn says “to take a role is to becreative. In taking a role we enact it.” (Hirschhorn in Colman & Geller, 1985: 350). Forthose in positions of management, this enactment has both conscious and unconsciousaspects that are determined by many factors including political personality, beliefs andvalues, and capacity to cope with change. Stacey (1993:333) refers to a ‘paradox ofmission’. The pull in one direction is focussed on ‘conformity and consensus’ in accordwith the organization’s mission. A contradictory force, however, directs the individual’senergies into retaining their ‘individuality and difference’. These conflicting motivationsin the manager lead to a tension that inevitably contributes to organizational dynamicsand impacts on performance. So why not consider them as important components of anymanagement development program?

An additional and complicating view is presented by Lawrence (in Colman & Geller,1985). Firstly, he says, that the primary objective of management development programsis to ensure that the organisation survives. Secondly managers ought to developthemselves. However, there is potential that this development might be at odds with theorganization’s survival strategies. There is some sense that the process of managementdevelopment is ‘neutral and civilising’. In actual fact, it could be seen as a highlypolitical act, although possibly unconscious on the part of the organization, whichpromotes particular types of role enactment and serves to promote the maintenance of theorganization’s culture. Perhaps the management development process has more to dowith developing compliance?

Organisational cultureAny discussion of management development must take into account the impact of theorganization’s culture. Firstly, the purpose, content and design of any program proposedto facilitate management learning must be given attention. Secondly, there must beconsideration of how individuals respond to the culture and the degree of match betweenindividual and organizational values and beliefs in meeting organizational goals. Justexactly what culture is has been the subject of discussion for a long time, with researchersand authors in the field not entirely agreeing on a definition. Differences in approachderive from differences in basic assumptions that are made not only about ‘culture’, butalso about ‘organizations’ per se. Thus, culture is variously understood as an instrumentserving human needs; an adaptive-regulatory mechanism uniting people within socialstructures; a system of shared cognitions; a system of shared meanings and symbols;and a projection of the unconscious; organization may be though of as social instrumentsdesigned to accomplish tasks; adaptive organisms in a process of exchange with theenvironment; systems of knowledge; patterns of symbolic discourse, or forms andpractices that express unconscious processes (Smircich, 1983).

Arguably, when we talk about culture we are referring to ‘the pattern of developmentreflected in society’s system of knowledge, ideology, values, laws, and day-to-day ritual’

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(Morgan, 1986: 112). When culture is viewed as an organizational variable, it is seen asone of many malleable components, such as the organizational structure, rewards system,training and development program, or technological system for example. As such it canbe moulded by management to suit current purposes. In other words, culture is seen asone tool among many to be ‘cultivated by management for the purpose of control andlegitimation of activity’ (Smircich, 1983: 346). Whereas this ‘culture as variable’ ideaviews culture as something an organization has, there is another view that favours thenotion that culture is something an organization is (Smircich, 1983; Morgan, 1986;Hatch, 1997). That is, culture is not held to have an objective existence apart fromhuman beings, but is instead ‘a socially constructed reality (made up of) artefacts,symbols, norms, values, beliefs, … assumptions … and physical, behavioural, andlinguistic symbols … interrelated in a web of interwoven meanings … accessible to allmembers of the culture’ (Hatch, 1997: 236). Although within this view the nature ofculture can be understood as cognitive, symbolic, structured, or psychodynamic, all theseunderstandings depend on the context in which the artefacts, symbols, behaviours and soon are to be found (Hatch, 1997). The authors here take the view that culture is not justone simple variable among many, but is rather, an active, living phenomenon throughwhich people create the worlds in which they live. As such it should be given dueconsideration.

Organizational PoliticsDavies (1973) puts the view that individuals are political types and that these typesdevelop in our first organization, the family, and carry through into organizational life inparticular ways. Kotter (1985) proposes that where there are conditions of high diversityand interdependence, this generates organizational dynamics including the culture of howmanagers exercise power, the degree and intensity of political behaviour, and the level ofconflict. Arguably, a manager's capacity to manage these dynamics is central to the roleof managing and that requires some skill and intuition.

Power is a potential force and politics is the exercise of or use of power (Pfeffer in Steers,Porter and Bigley, 1996). Managers must have intuition and understanding about theorganizational political context and some personal awareness about responses to theexercise of power in the organizational context both where they exercise power, and aresubject to the exercise of power by others. Bolman and Deal (1991: 205-6) put the viewthat wherever there are 'enduring differences, scarce resources and interdependence' therewill always be politics. They go on to describe the skills a manager must develop inorder to transcend political processes. These are interesting views about the developmentof political skills but they do not discuss the political personality that the individualmanager brings to the role, nor how these skills can be developed in terms ofmanagement development programs. The authors contend that the challenges formanagers in the 'new organization' are at the political boundary. What role domanagement development programs play in developing this aspect of managerialcompetence?

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The significance of the individual manager's capacity to operate in this way and thenature of political relationships are central to the achievement of organizational goals.Miller (in Colman & Geller, 1985) argues further that when engaging in relationship withothers in the role of managing, the political dimension to role taking is influenced by thepersonal values held by the individual. Further, the style of work adopted, says Davies(1973) has two aspects, that is, the personal pattern of approaching tasks and therelationships or particular roles adopted within the political system. The ideas of Davies(1973) and Baum (1993) suggest that there is some real significance in assistingmanagers to develop appropriate means of managing the political context in theirorganizations and developing some awareness of their responses to power and politicalbehaviour. Learning and management development is usually about change on apersonal level. The challenge for organizations is to provide management developmentprograms which address opportunities for managers to initiate and implement changefrom a strategic perspective but at the same time develop some awareness andunderstanding of their individual capacity for coping with change in the managerial role.

The Study: XYZ's Management Development Program

It was considered useful to test some of these ideas through an examination of anapproach adopted in a particular management development program, one of whoseobjectives was to assist managers 'in the continuing development of their leadership roleand management capacities'; and to explore the experiences of some of the participantsin that program. For the purposes of this study, a medium-sized public sectororganization, which designed and delivered an in-house management developmentprogram, was selected. The organization is part of the public education sector and is amedium-size organization. Twenty senior employees were nominated to participate inthe program. Participation was not mandatory. The Chief Executive Officer of theorganization had given the program his support, however, and a high priority in terms offunding and the allocation of resources. This was not a program that participants couldeasily refuse to attend. The subjects in this study were selected on the basis of a numberof factors: willingness to participate (only 3 did so); ease of access; and gender, as theresearchers believed it was important to represent the views and experiences of both maleand female participants to ensure balance. Two females and one male subject agreed toparticipate in the study. All participants had been employees in the organization in excessof seven years, they were located in different management units, and were of similarages. A set of six basic questions was devised in this instance which sought to helpparticipants relate their experiences of taking up their roles in the organizational contextin which they were managing, following participation in the management developmentprogram described above. Due to the sensitive nature of some of the questions it wasagreed that participants' identities would be concealed in the description and discussionof the data.

Given the specific nature of the program studies, results may not be able to be generalisedto other management development programs of a similar nature, or even beyond theexperience of the three interviewees to that of the other 17 participants (Hussey &

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Hussey, 1997; Judd, Smith & Kidder, 1991). Nonetheless, it was felt that the experienceof these three managers might provide rich insights, indicating where wider explorationwould be fruitful, and provide some direction as to future desirable design and contentmatters in management development programs. In the event, there was little evidence inthis small sample that the program provided any strong input into the way in whichinformants saw themselves in their roles as managers and their level of connectedness tothe political environment.

Discussion And Conclusions

Although this study was small and exploratory in nature, and little consistency of datawas revealed through the impressions of the informants about the effectiveness of themanagement development programs, and its ability to assist them in their development asmanagers, there has also been no organisational systematic evaluation of the program’seffectiveness in relation to the transfer of learning to the workplace over time. No auditwas taken, either before, during, or after the program, little account was taken of howparticipants experienced the program or how they felt about their own management skillsincluding political skills. Informants couldn’t provide detailed information about thedevelopment of political skills as part of the program, nonetheless, the data providedshows that they were challenged by particular aspects of the political system. Theauthors hypothesise that is probably in part an outcome of ‘political type’. Themanagement development program, however, provided little opportunity forconsideration of political type and its influence on how managers take up their roleswithin the organization’s political system. The study indicated quite clearly that therewas very little direct focus in this program on the organizational contextual issues and onthe impact that these issues can have on the manner in which a manager takes up his/herrole. The program also paid little attention to the development of awareness,understanding, and the skills required to assist managers to develop their capacity toengage with the political aspects of their roles. The design of management developmentprograms with an emphasis on the political contextual issues is challenging to say theleast. The ‘political personality and beliefs of managers influence action and behavioursignificantly. This statement is itself based on a belief and value system, and is in itselfpolitically motivated. Future research into these areas will probably raise more questionsrather than resolve issues. Perhaps it is ‘undiscussable’ in some situations. Nonetheless,it is an area requiring further exploration. The evaluation of the effectiveness ofmanagement development programs is the ultimate challenge. Systematic and strategicevaluation of training and development programs is problematic. This has been welldocumented. Evaluation of management development is even more problematic.Investigation of different approaches is needed but is highly political and perhapsillusory.

A full list of references is available from the authors.

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Decisions To Collude In Maladaptive Behaviour Ultimately ThreatenOrganisational Survival : A Culture In Conflict – A Case Study

Heather Russel-GaleSchool of Business, Swinburne University of Technology

Barbara LaskySchool of Business, Swinburne University of Technology

Mia Le FeveSchool of Business, Swinburne University of Technology

Abstract

Organizational theorists have, for some time now, perceived the intricateconnection between leadership behavior, cultural change, and management.Although leaders play a critical role in managing the existing culture of theirorganizations, it is the organizational founders who develop and institute thecultural values at the base of the organization upon which the decisions for actionare made. When a very dominant, unpredictable founder inappropriately acts toenforce his, or her, values on organizational members, the result is likely toproduce a counter-culture(s) that colludes with the founder to stifleentrepreneurial decision-making and healthy growth. This paper explores justsuch a culture-in-conflict, and concludes that in times of rapid change andincreasing competition, continued complicity in maladaptive behavior willultimately threaten organizational survival.

Introduction

Organizational theorists have, for some time now, perceived the intricate connectionbetween leadership behavior, cultural change, and management. Schein (1992) suggestscultural analysis is critical to modern management of organizations because it reveals thesubcultural dynamics within organizations that influence patterns of communication andconflict, amongst other things, including the cultural elements that may be operating asresistors to organizational learning and change. Whereas organizational leaders play acritical role in fostering group learning of organizational values, it is the organizationalfounder who provides the assumptions underlying the organizational values-in-use. Tounderstand an organization’s culture, it is therefore important to analyze the values andassumptions of both the founder and the leaders of an organization. This paper exploresthe culture and leadership style within an Australian manufacturing company with a viewto understanding how the latter influences the former and with what effect.

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What is Culture?

Few researchers and organizational theorists agree on a definition of culture. Each theoryvalues different elements of organization. For the purposes of this paper, culture isdefined as the ‘pattern of basic assumptions invented, discovered, or developed by agiven group, as it learns to cope with its problems of external adaptation and internalintegration, that has worked well enough to be considered valid and, therefore is taught tonew members as the correct way to perceive, think, and feel in relation to thoseproblems’ (Schein, 1992, p.12).

Not necessarily readily accessible or identifiable at a cognitive level to ‘insiders’ and‘outsiders’ alike, these basic assumptions define for organizational members what isimportant for them to pay attention to, what things mean, how to react both intellectuallyand emotionally to situations that occur, and what action to take in various circumstances.These assumptions are taken for granted, and are treated as non-negotiable (Schein,1992). Any perceived challenge to, or questioning of, a basic assumption may induceanxiety and defensiveness in both individuals or groups.

The Role of Leadership

Leadership, like culture, has been the subject of intense research with little resultingconsensus as to its definition or role within the organization. One perspective, and the oneof interest to this paper, views leadership as symbolic action, or the ‘embodiment oforganisational values and purpose’(Smircich and Morgan, 1982, p.260). Leadership isinextricably linked to culture because the leader’s actions and words frame and shapeorganization experience by influencing the relationship between the founder’s, orleader’s, action and the context within which the action occurs (Smircich and Morgan,1982).

The most significant cultural shaping occurs during the embryonic period of theorganization’s life, as the founder imports his, or her, personal beliefs, values andassumptions into the fabric of the organization, selecting the organization’s purpose, theenvironment in which the organization will operate, and the people who will work tomake the vision a reality (Schein, 1991). The initial experiences of an organization arealso heavily influenced by the leaders, or managers, as they exert significant effort inensuring the organization is developed in such a way as to realize the founder’s vision.This early involvement of leaders and founder has a corresponding influence on thecreation of espoused values and values-in-action within the organization’s culture. As theorganization evolves, succeeding generations of leaders will use language, ritual, stories,myths, and symbols to communicate and embed their own beliefs, values andassumptions in the thinking, feeling and behavior of the organization (Smircich andMorgan, 1982; Conger, 1989; Schein, 1992). Thus, the beliefs, values and assumptions ofthe founder, plus the learning of organizational members and the imported beliefs andassumptions of new organizational leaders and members, leads to a unique cultureidentifiable through a specific pattern of manifestations.

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The Unique Culture of Paradox

Paradox was founded in Australia in the mid nineteen-sixties by a charismaticentrepreneur with a flair for sales and marketing. The founder of Paradox, Jones(all names have been changed to maintain confidentiality), has been variouslydescribed by organizational members as ‘intensely creative’, ‘dominating’,‘intimidating’, ‘interfering’, ‘frequently generous to a fault’, ‘unpredictable’,‘inconsistent’, and ‘typical of a entrepreneur’. Central to Jones’ thinking was thatthe company’s main purpose for existence was the creation of a close team andthe provision of secure, long term employment for employees who demonstratedtheir commitment and loyalty to Jones. Jones built a group of companies around avery tight core of family members, these being the most senior managementgroup. Jones himself is semi-retired from the operational aspects, yet he remainsan extremely influential member of the organization’s culture. His dominance andunpredictability have resulted in one culture dominated by him and his seniormanagement team, and a counter culture of professionals that is highly critical ofthe way the company is being run.

It was the aim of the study to arrive at an understanding of the culture from an insider’sperspective (Evered and Louis, 1981), as one of the author’s was employed by thecompany as Human Resources Manager, and acted as participant observer. A number ofsenior managers and staff were also interviewed.

The Dominant Culture

Dominant cultures have a very high relative ‘stability or consistency across time’ (Louis,1985, p.131), and at Paradox the average tenure of this senior group is 22 years. Thegroup shares a common language that allows communication in a meaningful way andreflects Jones’ values of family, loyalty and trust. There appears to be little consensusabout the mission of the company outside of the founder’s assumption that it must protectand provide for the long term security of the family members and their families. The keymanagement group appears unable to define clear organizational goals. Members tend totake a short term approach to problem solving. Their approach is inherently simplistic asthey ‘do whatever it takes to get the product to the customer’.

Commitment and loyalty are rewarded at the expense of performance. Although aformally articulated structure is vociferously denied, a clear hierarchical structure doesexist, and it is based on the allocation or withdrawal of titles, as reward or punishment byJones. Judgment of performance on external standards is viewed with trepidation. Thisleads to inaction quite often because the group fears criticism by Jones that might lead toexclusion from the family. Members appear compelled to make only the ‘right’ decision,as determined of course by the father, Jones, but his inconsistency makes it difficult toknow which choice is correct. When an organization ‘is ambiguous, it is difficult to knowif action is called for, which actions would be appropriate, and what their consequencesmight be. The frequent result is inaction’ (Martin, 1992, p.143). The group emphasizes

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politeness and agreement with Jones. Displays of aggression are strictly forbidden for all,except Jones. This results in ‘behind-the-scenes’ complaining, bad-mouthing, politickingand other destructive behaviors that are the result of suppressing emotion, and silence inmeetings is interpreted as agreement.

In summary, this culture avoids planning or setting of clear measurable strategic goals;values loyalty and commitment above performance; rigidly defines its boundaries aroundissues of intimacy and trust as the products of long tenure, and subverts emotion in orderto sustain a happy equilibrium at the superficial level of the group. It is a paradigm,however, that has become increasingly irrelevant to the challenges of rapid, continuouschange and increasing competition.

The Counterculture of Professionals

Paradox appears to have reached a critical stage in its culture development. Over time theexternal environment has changed and many of the dominant culture’s basic underlyingassumptions are no longer valid and do not provide adequate solutions to the group’sproblems of external adaptation. New members have been hired who have values andassumptions very different to those of the dominant culture. This group considersthemselves to be professionals. The average tenure of the professionals group is onlythree years, compared to the 22 years in the dominant group, and the average age is 39,compared to 50 in the dominant culture. Created largely out of frustration with theabsence of direction and focus of the senior management group, it has a clearlyarticulated sense of purpose and understanding of organizational mission. This sense ofpurpose has stimulated a high degree of commitment and passion that is channelled intoidentification of clear and achievable goals. They assume that clearly defined structuresand roles are essential to the efficient functioning of the group. They appear lessparochial about their territory, but still aggressively defend their turf, particularly whensenior management steps in to change their objectives and plans. Professional groupmembers also welcome contributions from other team members, but still feel resentful iftheir team leader ‘interferes’ with their plans. This group also clearly differentiatesthemselves from the dominant culture in their approach to measurement of performanceand to feedback. They operate from the assumption that to value an individual requireshonest performance measurement and feedback, even though this might result in peoplefeeling hurt.

Unlike the dominant culture the ‘professionals’ initiate change. They communicatefrequently and consider each other to be team members. Combined with the vividnessand potency of the leadership of the group, this has contributed to a high degree ofcohesion between members, and to a common language and meaning system. Loyaltyand commitment are highly valued, as in the dominant group, but are rewarded verballyinstead of with promotion. Performance is assessed on an objective basis and discussedwith individuals and rewards are allocated appropriately. Members appear empowered tomake decisions and to act, and as a consequence have a high degree of independence. Atthe same time they appear comfortable with trusting other members. The high levels of

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trust seem to flow from the objective measurement program that values performanceequally with loyalty; the distribution of rewards based on shared understandings, and thereduction in nepotism and inequitable reward allocation that are characteristic of thedominant culture. Nevertheless, when interacting with the dominant group, they refrainfrom open criticism and confrontation, suppress their emotions, and engage in variousdestructive behaviours that promote conflict and undermine teamwork in the twocultures.

Summary and Conclusion

Inconsistent leadership behavior and action has resulted from the leadership of Jones. Hisstyle of leadership has engendered a climate of fear, compliance and the subversion ofindividual thought and willpower in all organizational members, including, a good deal ofthe time, those in the professionals group. At Paradox there is a facade of politeagreement and compliance. Feelings and their expression are subverted and repressedbehind a veneer of calm and tolerance. Problems are not dealt with openly or effectively.Both the dominant and the counterculture therefore simmer with repressed emotion,particularly anger, leading to a continual undercurrent of ‘mute rage’.

On the one hand the professional counterculture is highly critical of the incompetencethey perceive, which is based on the compliance and obedience to the founder. On theother hand the dominant culture are repelled by the perceived aggression andheartlessness of the professional culture. Resolution of the conflict will only occur ifassumptions change, and as assumptions are relatively constant, largely unconscious, andgenerally impervious to suggestion, the conflict may only be resolved by a dramaticchange in staff at the senior level or an effective full retirement of the founder.Paradoxically, the family may need to split if the family is to be saved. This paperconcludes that in the rapidly changing, volatile business world of today, continuedcomplicity in maladaptive behaviors will ultimately threaten an organization’s survival.

References

Chell, E. (2001) Entrepreneurship: Globalization, Innovation and Development,Thomson Learning, UK

Conger, J.A. (1989) The Charismatic Leader, Jossey-Bass, San Fransisco

Evered, R and Louis, M.R. (1981) ‘Alternative Perspectives in the OrganizationalSciences: Inquiry from the Inside and Inquiry from the Outside’ Academy of ManagementReview, 6 (3) pp.385-395

Louis, M.R. (1985) ‘An Investigator’s Guide to Workplace Culture’ in Frost, P,J, Moore,L.F, Louis, M.R, Lundberg,C and Martin, J (eds). Organizational Culture, BeverleyHills, Sage, California, pp.73-94

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Martin, J. (1992) Cultures in Organizations: Three Perspectives, Oxford UniversityPress, New York

Schein, E.H. (1991) ‘The Role of the Founder in the Creation of Organizational Culture’in Frost, P.J, Moore, L.F, Louis, M.R, Lundberg, C.C and Martin, J. (eds). ReframingOrganizational Culture, Sage, Newbury Park, California, pp.14-25

Schein, E.H. (1992) Organizational Culture and Leadership, 2nd ed. Jossey-Bass, SanFrancisco

Smircich, L and Morgan, G. (1982) ‘Leadership: The Management of Meaning’ TheJournal of Applied Behavioural Science, 18 (3) pp.257-273

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Pay Equity Bills in the 107th Congress: Sheep in Wolves' Clothing

Joel P. Rudin*Rowan University

Kimble ByrdRowan University

Abstract

Since the passage of the Equal Pay Act and the Civil Rights Act, women in theUnited States have made tremendous changes to their labor market behavior.What hasn’t changed very much over this time period is the relative economicstatus of women compared to men. Another constant has been a high level of jobsegregation by gender, such that few organizations employ both men and womento do a particular job. These facts have led many scholars to conclude thatemployers systematically undervalue female-dominated jobs, and that legislativeinitiatives are needed to rectify this problem. This paper reviews four bills thathave been introduced in the 107th Congress. Each of these bills contains loopholesthat would allow most employers to maintain their current pay rates. TheCongressional initiatives are contrasted with a much more stringent bill that hasbeen passed by the New York State Assembly.

Keywords: pay equity, comparable worth, U.S. Congress, New York State Assembly

Introduction

Since the passage of the Equal Pay Act and the Civil Rights Act, women in the UnitedStates have made tremendous changes to their labor market behavior. What hasn’tchanged very much over this time period is the relative economic status of womencompared to men. Over the period from 1978 to 1998, the average number of annualhours of women’s paid employment rose by 38%, with the biggest increase coming frommarried women with children under age 6 (Cohen & Bianchi 1999), and the percentageof working women holding college degrees nearly doubled until it became equal to thatof men (Bowler 1999). What didn’t change much over this time period was the relativeearnings of women compared to men. The median income of women compared to menrose from 63% to 76% over this time period (less than one percentage point per year onaverage), and this ratio actually declined from 1993 to 1997 (Bowler 1999). At this rateof average annual progress, full-time working women will not catch up to men until theyear 2030.

Occupational segregation by gender is hardly a uniquely American phenomenon. Therelevant literature has been summarized as follows: “Occupational segregation by sex isextensive in every region, at all economic development levels, under all political systems,and in diverse religious, social, and cultural environments. It is one of the most important

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and enduring aspects of labour markets around the world” (Anker 1997, p. 315). Yetstudies of occupational segregation may underestimate the extent of job segregation bygender. Even if a job is not segregated on a national basis, it is still possible thatindividual establishments practice job segregation. For example, the job of“waiter/waitress” is integrated on a national basis, but individual restaurants tend to hireemployees of only one gender to perform this job (Neumark 1996). Other studies havealso found that job segregation by gender is the norm (Bielby & Baron 1986; Groshen1991; Carrington & Troske 1995).

The perpetuation of job segregation by gender, coupled with the insensitivity of women’searnings to changes in their labor market behavior, have led many scholars to concludethat employers systematically undervalue female-dominated jobs, and that legislative“pay equity” initiatives are needed to rectify this problem (Treiman & Hartman 1981;Steinberg & Haignere 1984). This paper explains why the Equal Pay Act and the CivilRights Act fail to address this issue. Then, we review four pay equity bills that have beenintroduced in the 107th Congress. Each of these bills contains loopholes that would allowmost employers to maintain their current pay rates. The Congressional initiatives arecontrasted with a much more stringent bill that has been passed by the New York StateAssembly.

The Equal Pay Act, The Civil Rights Act, and Pay Equity

In 1963, Congress amended the Fair Labor Standards Act to prohibit discriminationbased on gender in payment of wages within a facility for equal work. Pay differentialsbased on seniority, merit, incentives, or “any factor other than sex” are expresslypermitted under the Equal Pay Act (29 U.S.C. 206(d)(1)). Some employers tried tocircumvent this law by assigning different job titles to male and female employees, butthe Equal Pay Act applies when male and female employees perform “substantiallyequal” work even if they have different job titles (Shultz v. Wheaton Glass, 421 F. 2d 259(3rd Cir. 1970)). However, this law cannot be used to challenge relative pay rates of male-and female-dominated jobs that are not substantially equal, such as nurse and truckdriver.

Title VII of the Civil Rights Act, passed the following year, forbade discrimination incompensation based on gender and certain other protected categories (42 U.S.C. 2000e-2(a)(1)). The most famous application of this law with respect to relative pay rates ofunequal male-dominated and female-dominated jobs was County of Washington, Oregonv. Gunther (452 U.S. 161 (1981)), which appeared to allow such claims under this law.However, subsequent court decisions made it clear that Title VII could not be used toforce employers to justify such differences in pay (Arnold & Ballman 1986).

Yet employers routinely compare substantially unequal jobs for the purpose ofdetermining their relative pay rates. This process is known as job evaluation. Anunderstanding of job evaluation is crucial to appreciating the flaws in the pay equity billsthat are discussed in the following section of this paper.

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The most common method of job evaluation in the private sector is the “point method”,in which each job is assigned a total number of points, and a greater number of pointsimplies a job of greater value to the organization. There are many steps in the pointmethod of job analysis, but the ones that are relevant for this discussion are as follows: 1)Choose compensable factors. These are aspects of jobs that are of value to theorganization. 2) Scale each compensable factor. This step involves describing each levelof each factor. For instance, the compensable factor of “required education” couldcontain the following levels: high school/GED, associate’s degree, bachelor’s degree,master’s/doctoral degree. 3) Weight each factor. In this step, a point value is assigned toeach level of each factor. An employer could for example assign the following number ofpoints to each level of “required education”: high school/GED – 5 points, associate’sdegree – 10 points, bachelor’s degree – 15 points, master’s/doctoral degree – 25 points(Milkovich & Newman 1999).

Once these steps have been completed, the factor weights are tested against theorganization’s “benchmark jobs”. A benchmark job exists in many organizations and isstaffed externally rather than through internal promotions. Higher-paying benchmark jobsshould receive higher point totals. If not, the preceding steps are repeated until there is acorrespondence between salaries and point totals for the benchmark jobs. If so, thesystem is applied to the remaining jobs in the organization. Jobs with similar point totalsare grouped together into the same “pay grade” to receive the same average salary.Finally, the procedure is repeated from start to finish for different groups of jobs withinthe organization. Organizations rarely use the same set of compensable factors for alljobs, because they feel that a single job evaluation plan cannot adequately capture thediversity of jobs throughout the organization (Milkovich & Newman 1999).

When an organization applies the point method of job evaluation, it commonly finds thatfemale-dominated jobs receive lower pay than male-dominated jobs with the same pointtotals. Advocates of pay equity believe that these disparities should be eliminated(Steinberg & Haignere 1984). In the following section of this paper, we assess four payequity bills that have been introduced to the 107th Congress. The bills are rank-orderedfrom most lenient to strictest. Each bill contains loopholes that would allow employers toevade an obligation to significantly raise salaries of female employees.

Pay Equity Bills in the 107th Congress

The House and Senate Paycheck Fairness Acts

The House version of the Paycheck Fairness Act (H.R. 781) was introduced byCongresswoman Rosa DeLauro and 193 cosponsors. The Senate version of the PaycheckFairness Act (S. 77), which has virtually identical language, was introduced by SenatorTom Daschle and 32 cosponsors. These Bills consist of a series of amendments to theEqual Pay Act. Section 3(a) weakens the “any factor other than sex” defense of paydifferences between men and women performing the same job. Employers must justify

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the cause of pay differentials, and employees may propose alternatives that “would servethe same business purpose without producing such differential”. Section 3(c) changes theframe of reference from each establishment within the organization to the entireorganization, by striking the word “establishment” from the Equal Pay Act. Section 3(e)increases the penalties for violation of the Equal Pay Act to include compensatory andpunitive damages (exempting the Federal government from punitive damages) as well asexpert fees. Section 7 establishes the “Alexis Herman National Award for Pay Equity inthe Workplace” for a business that “has made a substantial effort to eliminate paydisparities between men and women.”

The most notable feature of these Bills is that they do not require employers to implementpay equity policies. They allow employers to do so, with the promise of technicalassistance from the Secretary of Labor, as well as the chance to win the Alexis HermanNational Award for Pay Equity in the Workplace. Employers that resist the lure of theaward and the technical assistance are free to continue their current pay practices. Whilethese Bills strengthen the penalties for violation of the Equal Pay Act, they do notsubstantially increase the likelihood that an employer will violate this law. Were theseBills to be enacted, it is hard to see how a major change in extant compensation practiceswould result.

The House and Senate Fair Pay Acts

The House version of the Fair Pay Act was introduced by Congresswoman EleanorHolmes Norton and 17 cosponsors. The Senate version of the Fair Pay Act (S. 684),which has identical language, was introduced by Senator Tom Harkin and 13 cosponsors.Section 3 (a) of these Bills require employers to compare, within each of theirestablishments, pay rates between different jobs which are “dominated by employees of aparticular sex, race, or national origin.” They defer to the EEOC the task of defining thecriteria for identification of a “dominated” job. This section prohibits pay differencesbetween equivalent jobs that are “dominated” by different protected group members,except on the basis of the defenses to alleged violations of the Equal Pay Act as specifiedin the House and Senate Paycheck Fairness Acts. Job equivalence is determined as “acomposite of skills, effort, responsibility, and working conditions.” Section 7 invites theEEOC to “conduct studies and provide technical assistance” to facilitate compliance withSection 3 (a). Section 8 extends the protections of this Bill to Congressional andExecutive Branch employees.

These Bills appear to require employers to implement pay equity plans. However, theycontain two important loopholes which employers could exploit in order to minimize anyrequired pay raises. First, employers could move dominated jobs to differentestablishments. For example, the female-dominated jobs could be located in oneestablishment while the male-dominated jobs could be located in another establishment.If an employer maintained sex and race segregation within each of its establishments,then there would be no equivalent jobs dominated by different protected group members,and therefore no need for employers to establish the equivalence of different jobs.

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Second, recall that equivalence is defined in the Bills as “a composite of skills, effort,responsibility, and working conditions.” This definition implicitly recognizes the infinitenumber of possible combinations of these four compensable factors, and the Bills letemployers choose their optimal combination. If employers devalue those factors onwhich female-dominated jobs score higher, and emphasize those factors on which male-dominated jobs score higher, the difference in pay between “equivalent” jobs dominatedby different genders can be greatly reduced.

Consider for example the following pairs of jobs, from a study conducted by the State ofWashington which formed the basis of the landmark AFSCME vs. State of Washingtoncase (770 F. 2d 1401 (9th Cir. 1985)): registered nurse and electrician, statistical reportscompiler and caretaker, research librarian and revenue compliance officer. Each pairconsists of a male-dominated and female-dominated job. Each pair of jobs has the sameaverage pay, though within each pair the female-dominated job is assessed as being morevaluable to the organization. Within each pair, the male-dominated jobs would scorehigher on the “working conditions” compensable factor because they require outdoorwork, while the female-dominated jobs would score higher on the “skills” compensablefactor because they require more education. The State of Washington could make muchof the pay equity gap disappear simply by increasing the weight assigned to workingconditions and decreasing the weight assigned to skills.

An Alternative With Teeth: The New York State Fair Pay Act

The New York State Fair Pay Act (A.B. 6691) was passed by the State Assembly in April2002 but faces a grim future in the Republican-dominated Senate. This Act definesequivalency of jobs and requires implementation of pay equity policies in the same wayas the Congressional Fair Pay Acts. Several important differences exist between this Actand its Congressional kin.

This Act specifies that “wage differentials based on varying market rates for equivalentjobs or the differing economic benefits to the employer of equivalent jobs shall not beconsidered differentials based on bona fide factors” as an employer defense. Such anexplicit rejection of the market wage defense of pay differences in equivalent jobs isabsent in the Congressional Fair Pay Acts.

Furthermore, the equivalence of jobs “will be established through the application of asingle job comparison system that does not systematically ignore or undervalue the jobcontent of traditionally female and minority jobs.” This appears to close the loophole inthe Congressional Fair Pay Acts that would allow employers to place an excess weight onthose compensable factors that are at higher levels in male-dominated jobs. This lawappears to force employers to apply job evaluation to jobs that are dominated by whitemales until a correspondence exists between point totals and market wages. Then the jobevaluation system would be applied to the remaining jobs, with pay raises likely forfemale- and minority-dominated jobs.

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Conclusion

There are no realistic prospects that pay equity legislation will be enacted in the nearfuture, as both major political parties compete to occupy the political center. As long asBills pertaining to this subject are going to be introduced into Congress, they should atleast have the prospect of closing the male-female wage gap. Otherwise, they’re arguablya waste of time and resources.

In our opinion, the House and Senate Paycheck Fairness Acts fail this test. Neither Billrequires employers to change their compensation practices, so neither Bill is likely tohave an impact on reducing pay inequity. The House and Senate Fair Pay Acts, on theother hand, would require major changes in employer compensation practices. Unlessthey are modified along the lines of the New York State Fair Pay Act, it is possible thatlawyers and compensation consultants would receive more money from employersseeking to evade the law’s consequences than would women and minorities.

References

Anker, R. (1997). Theories of occupational segregation by sex: An overview.International Labour Review, 136: 315-339.Arnold, R.J., & Ballman, D.M. (1986). AFSCME v. Washington: The death ofcomparable worth? University of Miami Law Review, 40: 1039-1074.Bielby, W.T., & Baron, J.N. (1986). Sex segregation within occupations. The AmericanEconomic Review, 76: 2, 43-47.Bowler, M. (1999). Women’s earnings: An overview. Monthly Labor Review, 122:12,13-21.Carrington, W. J., & Troske, K.R. (1995). Gender segregation in small firms. The Journalof Human Resources, 30: 503-533.Cohen, P.N., & Bianchi, S.M. (1999). Marriage, children, and women’s employment:What do we know? Monthly Labor Review, 122: 12, 22-31.Groshen, E.L. (1991). The structure of the female/male wage differential: Is it who youare, what you do, or where you work? The Journal of Human Resources, 26: 457-472.Milkovich, G.T., & Newman, J.M. (1999). Compensation (6th ed.). Boston: Irwin-McGraw Hill.Neumark, D. (1996). Sex discrimination in hiring in the restaurant industry: An auditstudy. Quarterly Journal of Economics, 111: 915-942.Steinberg, R., & Haignere, L. (1984). Separate but equivalent: Equal pay for work ofcomparable worth. In Gender at Work: Perspectives on Occupational Segregation andComparable Worth, 13-26. Washington: Women’s Research and Education Institute.Treiman, D.J., & Hartmann, H.I. (1981). Women, Work, and Wages: Equal Pay for Jobsof Equal Value. Washington: National Academy.

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HRM in the Australian Luxury Hotel Industry: Signs of Innovation ?

Angela KnoxDepartment of Management, University of Melbourne

Abtract

The Australian luxury hotel industry has experienced substantial growth in recentyears. Subsequently, this sector has become an increasingly important andinfluential dimension of the hospitality industry, as well as the service sector.Despite this, a paucity of empirical research exists, focusing on the humanresource strategies and outcomes within luxury hotels. Little is known of theemployment systems operating in these firms. Moreover, within the extantliterature, which focuses more broadly on the hotel industry, contradictions havebegun to emerge regarding the nature of hotels’ management practices. Whileresearch has traditionally characterised hotels’ employment strategies asadversarial and largely ad hoc, a small number of studies have documented morestrategic and quality focused systems, reflecting more sophisticated humanresource management (HRM). Consequently, this study analyses employmentpractices within luxury hotels in Australia in order to characterise HRM systemsin these firms. The results provide an indication that luxury hotels are deployinga relatively more sophisticated approach to HRM than depicted by the traditionalresearch literature.

Keywords: HRM, luxury hotels, employment systems, strategic

Introduction

The aim of this paper is to generate new empirical data regarding HRM strategies in theAustralian luxury hotel industry. These findings will shed light upon this importantsegment of the service sector, which has been experiencing substantial growth anddemonstrating increasing significance in recent years. Despite this, relatively littleresearch has been conducted in this influential employment sector. Furthermore, withinthe limited extant literature, contradictions have emerged recently regarding the degree ofsophistication inherent in hotels’ HR strategies, on the basis of British and Europeanfindings. This dilemma will be examined in the context of contemporary data for theAustralian luxury hotel industry (the data were gathered by the Australian WorkplaceIndustrial Relations Survey for 1995, AWIRS95).

Luxury hotels include those properties that have been assigned four or five stars (IndustryCommission 1996, RACV 1999). These hotels typically consist of several hundred guestrooms and an equivalent number of employees (World Tourism Organisation 1996).Although these large hotels account for a mere two per cent of all hotels surveyed, theyexert the greatest influence with respect to employment. Their employees’ account foraround 49 per cent of all hotel employees, and are paid 59 per cent of gross wages for the

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hotel industry (ABS Cat. No. 8635.0, 8674.0). These hotels also represent 50 per cent ofgross hotel income (ABS Cat. No. 8635.0, 8674.0). Moreover, the number of guestrooms provided by luxury hotels have increased continuously from 1990 to 1999 (ABSCat. No. 8635.0). Thus, large luxury hotels exert considerable influence and form animportant component of the hotel industry. Consequently, the employment systemsadopted by luxury hotels have wide ranging effects across the entire hotel industry.

Rationale

Traditionally, the hotel industry has been portrayed as demonstrating relativelyhomogeneous employment strategies and labour management practices. The hotelindustry has become renowned for its provision of poor pay and conditions, heavyreliance on casual and part time employees, high labour turnover and a habit of recruitingfrom groups which are particularly easy to exploit, including young female workers andmigrants (Byrne 1986, cited in Guerrier and Lockwood 1989a, Whitehouse et al. 1997).Another study by Guerrier and Lockwood (1989b) demonstrated that managers were theonly employees who could be described as core staff, possessing career prospects.Generally, the industry has been described in terms of its adversarial and ad hoc approachto HRM.

A general consensus in the academic literature has indicated that the hotel industry isdeficient with respect to the existence of consultative and harmonious employee relationspractices and human resource outcomes (e.g. Hales 1987, Haynes and Fryer 1999, Lucas1996). Lucas’ (1996) study suggested that management alone made the decisionsregarding pay determination in over 90 per cent of cases, thus indicating littleconsultation with employees. Hotel and catering managers rarely mentioned practicessuch as autonomous work groups, and quality circles, and joint consultative committeeswere also less common when compared to other firms. Furthermore, consultativearrangements regarding health and safety were much less common in hotels and catering(Lucas 1996).

Typically, the industry has been conceptualised as displaying a reliance upon highlydeveloped numerical and temporal flexibility strategies, based on the high incidence ofcasual labour and non standard working hours, and under-developed functional flexibilitystrategies associated with low levels of training provision and skill utilisation (Borehamet al. 1996, Timo 1995a). Regarding numerical and temporal flexibility, a centralchallenge for hotel managers has been to align labour supply precisely with irregular andunpredictable guest arrivals (Industry Commission 1996, Timo 1995b, Walsh 1990,1991). Consequently, work is increasingly fragmented by time and demand fluctuations(Walsh 1990, 1991). Overwhelming, casual and part time workers have been deployed inorder to generate this flexibility.

The dominant employer strategy regarding functional flexibility in the hotel industry hasentailed low levels of training provision and the deployment of semi-skilled employeesworking within a tightly controlled environment (e.g. Boreham et al. 1996, Industry

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Commission 1996). Research has indicated that training provision among the workforcehas been below desired levels (Industry Commission 1996). Timo (1995b) argues:

….it appears that hotels have traded off developing the skills of employeesthrough functional flexibility in favour of numerically flexible workers.Consequently, hotels have adopted labour utilisation strategies which combineboth numerically flexible working practices as well as working time flexibilities(p. 441).

While employers’ minimal investment in training and functional flexibility strategies areapparent in the majority of hotel research, evidence to the contrary has begun to emergefrom the UK and Europe. In a study of skill creation and career development within 47three and four star hotels in Britain, Finegold et al. (2000) revealed that employers hadincreased their commitment to training and introduced a more systematic approach toskill development and qualifications during the 1990s. Finegold et al. (2000) reportedthat approximately 95 per cent of employees received at least one form of training,whether it be on-the-job training or more formalised off-site training programs.Furthermore, several hotels had increased and formalised their training efforts. Thisincluded offering cross training programs that involved different tasks in the samedepartment or brief rotations to other departments. These ongoing cross trainingprograms were said to increase staffing flexibility by enabling employees to shift betweentasks as necessary. The programs were also said to provide better customer service,reduce turnover by creating opportunities for internal promotions, and improvecommunication between departments (Finegold et al. 2000).

Harrington and Akehurst (1996) conducted another study in the UK, which illustrated theexistence of more diverse and systematic employment systems within the hotel industry.The authors reported that approximately 90 per cent of hotels within their sampleregarded quality as a strategic concern and around 80 per cent invested resources to trainemployees in quality related endeavours. Furthermore, Anastassova and Purcell (1995)revealed that Bulgarian hotel managers had moved away from directive and autocraticstyles towards a consultative approach, especially among larger hotels. This was asystematic attempt on the part of managers to improve organisational outcomes such asservice standards. In a survey of Scottish hotels, Buick and Muthu (1997) revealed thatthe development of internal labour markets and career development initiatives hadassumed increased importance in order to maintain high quality service provision andretain staff. In a separate study of two large hotels the introduction of appraisal systems,training and development, communication systems, and extensive consultation to supporta culture of service quality was found to exist (Watson and D’Annunzio-Green 1996).

In a comparative study of UK hotel and manufacturing firms, Hoque (1999) found thatpractices related to training, communication and consultation, and terms and conditionsof employment were more widely evident in hotels than in manufacturing establishments.Moreover, the findings led Hoque (1999, 2000) to conclude that hotels were increasinglyrecognising the importance of strategic HRM compared to manufacturing firms. More

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specifically, large hotels appeared to recognise the need to improve and develop HRpolicy and practice. According to Hoque (1999), these results ‘must therefore be viewedas positive from this point of view, given that they suggest considerable experimentationand innovation in terms of HRM within a service sector context’ (p. 74).

In marked contrast to the traditional research findings focusing on hotels, these studiesreveal that some hotels are characterised by increasingly sophisticated employerstrategies, which include a greater commitment to human resources and service quality.Employers appear to have developed high commitment approaches, marked bysystematic approaches to training and career development programs and an emphasis onstrategic HRM. Studies have neglected to examine in detail however, the nature andcharacter of employers’ human resource and employment strategies in the Australianluxury hotel industry. Thus, the aim of this paper is to analyse data from the AWIRS95in order to generate new empirical evidence regarding the employment characteristicsand strategies of the luxury hotel sector relative to other workplaces (the All Industriesaverage) in Australia. This will enable us to specify the distinctive features of theAustralian industry, including an understanding of the degree of sophistication inemployers’ HRM strategies.

Results & Discussion

The results reveal that luxury hotel workplaces are heavily dependent on female, casualand part time employees (see Table 1). This supports the findings of Haynes and Fryer(1999), Price (1994) and Whitehouse et al. (1997), who also reported this trend within thehospitality industry. The high degree of consistency across research studies appears tosupport the traditional characterisation of the hotel industry, as dependent on casual, parttime and female employment. Moreover, Boreham et al.’s (1996) results whichhighlighted the high level of non standard employment utilised within large workplacesin the accommodation sector is also supported by the findings presented here.

The traditional employment stereotype of the hotel industry was reinforced further byresults indicating that luxury hotel workplaces are associated with higher turnover anddismissal rates, and lower wages compared to other workplaces. Prior research hasfrequently associated poor wages and high turnover and dismissals with this industry(Byrne 1986, Industry Commission 1996, Lucas 1996, Price 1994). For instance, Lucas(1996) revealed that low pay and a high incidence of formal disciplinary sanctions werecommon among hotels. Luxury hotel workplaces also appear to reflect this trend.

Luxury hotels also emphasised numerical and temporal flexibility strategies morefrequently than other industries (see Table 1). Strategies which emphasise numerical andtemporal flexibility enable employers to utilise employees during peak business hoursand then reduce their working hours during troughs in demand. The IndustryCommission (1996) argued that this strategy produced a closer alignment of laboursupply and customer demand. Similarly, Timo (1995b) suggested that labour within thehotel industry was being utilised on an ‘as needed’ basis, leading to increased control

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over labour costs (Robinson and Wallace 1983). This finding is consistent with the HRpractices portrayed by the more traditional empirical research in hotels.

In contrast, functional flexibility strategies were present among luxury hotel workplaces(see Table 1). The high incidence of formal training within luxury hotel workplaces wasconsistent with Hoque (1999, 2000) and Boreham et al.’s (1996) findings, whichindicated widespread training within the hotel industry. Within luxury hotel workplaces,training schemes existed and formal training was conducted at a higher rate than for allother workplaces. Hence, there is evidence to suggest that the luxury hotel sector deploysmore sophisticated HR strategies than portrayed by the traditional hotel industryliterature. The existence of such strategies among luxury hotels seems reminiscent ofthose depicted in recent British and European research (e.g. Finegold et al. 2000,Harrington and Akehurst 1996, Hoque 2000). Furthermore, this training may exist incombination with initiatives such as cross training and multiskilling, it is unfortunatehowever that the AWIRS instrument was not designed to detect such developments.Thus, luxury hotels may be displaying signs of greater innovation than is evident.

The foregoing analyses also revealed that luxury hotels are more inclined to have formalHR policies (see Table 2). A wide range of HR issues are encoded in formal policiesamong luxury hotel workplaces. Written policies and managerial training on EEO/AAand sexual harassment occur more frequently among luxury hotels than other workplaces.There is also a high frequency of written policies and committees for occupational healthand safety, and formal grievance procedures among luxury hotel workplaces. Thus,luxury hotels place on average a greater emphasis on HR policy issues than otherindustries. These findings suggest that luxury hotels in Australia are demonstratingsystems of HRM that are more innovative than one would expect on the basis oftraditional research findings. This provides additional support for the findings ofEuropean and British researchers indicating that some segments of the hotel industry aredisplaying more sophisticated approaches to HRM than previously reported.

Conclusion

The results of this research have generated new data characterising HR strategies andoutcomes in Australian luxury hotel workplaces. While luxury hotels did demonstrate anumber of managerial practices in common with the broader hotel industry literature, theluxury hotels also possess some distinctive HR practices indicative of innovation. Forinstance, luxury hotels display a strong commitment to certain aspects of functionalflexibility including formalised training programs and team building initiatives.Furthermore, luxury hotels frequently formalise their HR policies, including EEO/AA,sexual harassment and grievance procedures. These findings provide some support forthe recent British and European literature suggesting that the hotel industry practicesstrategic HRM. Nevertheless, the luxury hotels simultaneously rely upon non standardand female employment, and pay lower wages than other industries. In addition, a strongdependence on numerical and temporal flexibility is evident.

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References

ABS. (1994). Hospitality Industries Australia, 1991-1992. Cat. No. 8674.0. Canberra:AGPS.

ABS. (1995). Tourist Accommodation, Victoria. Cat. No. 8635.0. Canberra: AGPS.Anastassova, L. and Purcell, K. (1995). Human Resource Management in the BulgarianHotel Industry: from Command to Empowerment. International Journal of HospitalityManagement, 14:2, 171-185.

Boreham, P. et al. (1996). Training, Careers and Numerical Flexibility: EquityImplications in Hospitality and Retailing. Journal of Industrial Relations, 38:1, 3-21.

Buick, L. and Muthu, G. (1997). An Investigation of the Current Practices of In-HouseEmployee Training and Development within Hotels in Scotland. Service IndustriesJournal, 17:4, 652-668.

Finegold, D.et al. (2000). National Skill-Creation Systems and Career Paths for ServiceWorkers: Hotels in the United States, Germany and the United Kingdom. InternationalJournal of Human Resource Management, 11:3, 497-516.

Guerrier, Y. and Lockwood, A. (1989a). Developing Hotel Managers: a Reappraisal.International Journal of Hospitality Management, 8:2, 82-88.

Guerrier, Y. and Lockwood, A. (1989b). Core and Peripheral Employees in HotelOperations. Personnel Review, 18:1, 9-15.

Hales, C. (1987). Quality of Working life, Job Redesign and Participation in a ServiceIndustry: a Rose by any other Name ? Service Industries Journal, 7:3, 253-273.

Harrington, D. and Akehurst, G. (1996). Service Quality and Business Performance inthe UK Hotel Industry. International Journal of Hospitality Management, 15:3, 283-298.

Haynes, P. and Fryer, G. (1999). Changing Patterns of HRM and Employment Relationsin New Zealand: the Large Hotel Industry. Asia Pacific Journal of Human Resources,37:2, 33-43.

Hoque, K. (1999). New Approaches to HRM in the UK Hotel Industry. HumanResource Management Journal, 9:2, 64-76.

Hoque, K. (2000). Human Resource Management in the Hotel Industry: Strategy,Innovation and Performance. London: Routledge.

Industry Commission. (1996). Tourism Accommodation and Training. Melbourne:AGPS.

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Lucas, R. (1996). Industrial Relations in Hotels and Catering: Neglect and Paradox ?British Journal of Industrial Relations, 34:2, 267-286.

Price, L. (1994). Poor Personnel Practice in the Hotel and Catering Industry: Does itMatter ? Human Resource Management Journal, 4:4, 44-62.

RACV. (1999). Accommodation Guide: 1999-2000 Edition. Victoria: RACV.

Robinson, O. and Wallace, T. (1983). Employment Trends in the Hotel and CateringIndustry in Great Britain. Service Industries Journal, 3:3, 260-278.

Timo, N. (1995a). Managing Under Pressure: Trade Unions, Restructuring andEnterprise Bargaining in the Hospitality Industry. In, Faulkner, B., Fagence, M. and

Davidson, N. (eds), Tourism Research and Education in Australia. Canberra: Bureau ofTourism Research.

Timo, N. (1995b). The Structure and Organisation of Work and Management inTourism. In, Sonder, L. (ed), Current Research in Industrial Relations: Proceedings ofthe 9th AIRAANZ Conference. Australia: AIRAANZ.

Walsh, T. (1990). Flexible Labour Utilisation in the Private Service Sector. Work,Employment and Society, 4:4, 517-530.

Walsh, T. (1991). ‘Flexible’ Employment in the Retail and Hotel Trades. In, Pollert, A.(ed), Farewell to Flexibility. Oxford: Blackwell.

Watson, S. and D’Annunzio-Green, N. (1996). Implementing Cultural Change throughHuman Resources: the Elusive Organisational Alchemy ? International Journal ofContemporary Hospitality Management, 8:2, 25-30.

Whitehouse, G. et al. (1997). From Casual to Permanent Part Time ? Non StandardEmployment in Retail and Hospitality. Labour and Industry, 8:2, 33-48.

World Tourism Organisation. (1996). WTO’s 1995 International Tourism Overview.Madrid: WTO.

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Table 1: Employment Characteristics and Flexibility Strategies in Luxury Hotel and AllIndustries Workplaces

Variable Luxury HotelIndustry(N=12)

All Industries

(N=1079)Employment Characteristics (Mean) (Mean)Number of Employees at Workplace 193.9 101.7Percentage Casual, Agency, Contractors and Outworkers 54.7 19.5***Percentage Part Time Workers (permanent and casual) 54.5 24.8***Percentage Female Workers 57.5 45.2***Average Workplace Weekly Earnings 551.1 656.8Full time Average Workplace Weekly Earnings 573.7 674.3Union Density (percentage) 49.8 43.4

Numerical Flexibility Strategies (% respondingaffirmatively)

(% respondingaffirmatively)

Increased use of casuals compared to last year 41.7 28.5Increase number of part time or casual employees inresponse to increased demand

58.3 25.9*

Reduce number of part time or casual employees inresponse to decreased demand

54.5 28.8

Temporal Flexibility StrategiesIncrease amount of overtime in response to increaseddemand

0 17.9

Decrease amount of hours worked in response todecreased demand

27.3 18.7

Employees do shift or on call work 100 59.7*Rotating shifts are used 66.7 37.8*Regular night shifts are used 54.5 34.7Split shifts used 75.0 11.8***Irregular shifts used 41.7 23.9

Functional Flexibility StrategiesSemi autonomous groups in place 9.1 30.1Quality circles in place 8.3 14.2Team building in place 63.6 46.9Total quality management in place 33.3 37.4Skills audit in place 8.3 28.6Staff appraisal/evaluation in place 91.7 60.5*Training scheme in place 83.3 61.1Formal training for employees 100 70.0*

* p < 0.05; ** p < 0.01; *** p < 0.001

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Table 2: HR Policies and Outcomes in Luxury Hotel and All Industries Workplaces

Variable Luxury HotelIndustry(N=12)

All Industries

(N=1079)HR Policy (% responding

affirmatively)(% respondingaffirmatively)

Written policies on EEO/AA 75.0 69.1Written policies on sexual harassment 75.0 58.5Carers/family leave 33.3 41.3Paid maternity leave 25.0 34.7Paid paternity leave 0 18.8Written grievance procedures 90.0 72.5*Written policies on OH&S 83.3 80.6

HR Outcomes (Mean) (Mean)Voluntary labour turnover 35.7 17.3Dismissals 3.3 1.8Absenteeism 1.6 2.6

* p < 0.05; ** p < 0.01; *** p < 0.001

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Anomalies in the Pricing of Insurance for Long Term Care for the Aged

David N. RepsLubin School of Business, Pace University

Abstract

By the year 2050 there will be a dramatic change in the number of agedAmericans. Age groups in the long-term care market will experience the fastestgrowth by far, e.g., the 82+ age group will grow from 4 to 20 million, and at aprojected 5 percent annual cost escalation, the annual cost for nursing home carefor that cohort will be $15 trillion at 2050 prices should that entire cohort requireinstitutionlization. Apart from this alarming projection, the current premiumstructure of the LTC insurance industry is in serious disarray, which can lead tothe need for a draconian eventual restructuring of relative premiums across agecohorts, as well as an overall increase in premiums to maintain a balance betweenpremium and benefit cash flows.

A financial model, comparing committed benefit payments and premium annuities,shows that the pricing for the 27 year-old cohort can either be ten-times too high or onefifth required, depending on the rate of return the carriers can achieve on their annuitypremium cash flows, while for today's 72 year-old cohort, the current premium is one-fourth to one sixth too low, over the same range of rate-of-return possibilities.

Thus the prospects for an adequate solution to the coming societal obligation to a long-term solution to long-term care for the aged is in need, first, of a recognition of thelooming problems, and second, a realistic approach to an optimal solution. To leave theproblems solely in the hands of an unregulated industry subjected to the uncertainty offuture financial market conditions can result in economic chaos.

By the year 2050 there will be a dramatic change in the number of aged Americans.

POPULATION PROJECTIONS - Millions (1)

25 35 45 55 65 75Age Group: to 34 to 44 to 54 to 64 to 74 to 84 85+

--- --- --- --- --- --- ---1998 39 44 35 23 18 12 42050 49 47 44 42 35 26 18

Percent Increase:(1998-2050) 26 7 26 83 94 117 350

(1) U.S. Census Bureau, the Official Statistics

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Age groups in the long-term care market will experience the fastest growth by far, e.g.,the 82+ age group will grow from 4 to 18 million, and at a projected 5 percent annualcost escalation, the annual cost for nursing home care for that cohort could be $15 trillionat 2050 prices if that entire cohort were to require such care, based on a conservative 5percent compounded escalation in nursing home care. Apart from this alarmingprojection, the current premium structure of the LTC insurance industry is in seriousdisarray, which can lead to the need for a draconian eventual restructuring of relativepremiums across age cohorts, as well as an overall increase in premiums to maintain aprofitable balance of premium and benefit cash flows for the insurance companies. Also,the 35 to 44 cohort - the prime source of benefits in a welfare model for LTC willexperience the least growth by far.

The purpose of this paper is a limited one, exploring a small set of variables based ondata that are typical of current LTC insurance offerings by major suppliers. A modelcalculates, using traditional financial arithmetic, the financial effect of the selectedvariables on the buyer and seller. The literature dealing with this approach to theeconomics of care for the aged is surprisingly scarce. Cadette (2000) has correctlyprojected the costs of long term care, and has correctly analyzed the pitfalls in any modelbased on a welfare policy, advocating, instead, a model based at least in part on insurancefinancing. But the LTC insurance carriers are in the financial services industry. They are(putative) profit making entities, and hence subject to the risks in performance of theinvestments they will make with the premiums they will collect.

Background

Virtually all of the information in the public domain on the economics of extended carefor the aged deals with the impact on a macro scale at the Federal, State, and local levels.But very little financial data useful to the consumer are available at a public level. In theprivate domain, the insurance industry deals in LTC policies, i.e., "product offerings"which, in varying degrees, conform to the competitive market. But in that market, thelargest carrier (GE) will not even provide a price schedule to an interested potential buyer- he or she is told that requirements and costs must be individualized. (TIAA, however,does publish a model price list in its brochure.)

Even current projections for the financial health of the industry, anticipated by its majorparticipants, already may be under concerned scrutiny. The second-largest supplierrecently was sold to the industry's largest supplier. Consolidation, however, may not offerany surcease, given the simple financial model presented here, even if a 5-percent "CPU"cost escalation factor, compounded annually is used, rather than the 8-percent recent costescalation experienced by the industry, as reported in the most recent "Shopper's Guide"published by the NAIC (1999), the organization of all the chiefs of the U.S. stateinsurance commissioners.

Two questions this paper explores are: (1) What is the financial exposure of the LTCbuyer to the expected ongoing escalation of care costs, assuming costs will have to be

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reimbursed by adequate premiums; (2) for the LTC care sellers, what is their futureexposure based on the inadequate returns from the contracted present premium rates?

The Set Of The Variables Considered

To evaluate the financial exposures, for the buyer and seller, a typical set of productofferings, and range of buyer cohorts, are considered here by the financial model:

Customer's age at start of premiums 27 42 57 72

Annual fixed premium with benefit increment 1060 1540 2160 4000 of 5 and 8 percent compounded annually

Age at start of covered benefits:Premium payments stop at the beginning age 82 87 92

of benefits; (only age 82 is reported in this paper)

Daily covered benefit maximum (Year 2000) 180Years of benefits at maximum daily rate 3Annual covered benefit maximum (Year 2000) 65,000Total three-year "Money Bundle" (Year 2000) 195,000(The "Money Bundle" can be spread over more years)

CPI growth applied to "Money Bundle" 0.05 Compounded annually

Carrier's present value annual discount rate 0.05 0.10 0.15

The Model

The model employed is a simple spreadsheet that allows for a change in the value of anyone or more of the above variables.

tFuture Committed Money Bundle = Money Bundle in yr 2000 ( 1 + .05)

tCarrier's accumulated earnings = Yr 2000 premium (1 + annual earnings rate)

where t = number of years for a cohort to reach age 82

In a previous paper, Reps (1999) reported on buyer and seller financial "efficiency" butthe earnings rate of the insurance carrier was held constant at 10 percent, and the presentvalue discount rate of the customer held at 6 percent. This paper focuses on the effect of arange in insurance carrier earning rates on its premium cash flow of 5 percent to 15percent, and 5 and 8 percent compounded escalation for costs, the latter cost percentage

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being the recent experience cited above by the NAIC. Results from the application of themodel described above are as follows in Tables 1 and 2:

TABLE 1

Required Annual Premium for Carrier to Accumulate the Committed Money Bundle atAge 82, with 5 percent and 8 percent(compound) Escalation per Year in LTC Costs for arange of 5 to 15 percent Annual Rate of Return on Premium Cash Flows

---------------Carrier's Percent Return on Premium Cash Flows (Percent)

Age Premiums 5 10 15-- ---- ---- ----- -----27 Quoted: yr 2000 $ 1060 $ 1060 $ 1060

Required: 5 % 10500 1460 189Required: 8 % 45000 6650 865

42 Quoted: yr 2000 1540 1540 1540Required: 5 % 11400 2970 740Required: 8 % 33000 9000 2200



3TABLE 2

Carrier's Required Annual Rate of Return on Premium Cash Flowto Accumulate the Committed Money Bundle at Cohort's Age 82

------------------Start age 27 42 57 72

----- ----- ----- -----Year 2000Premium $ 1060 1540 2160 4000

Required Rate of Return: 5 percent (compound) LTC cost EscalationPercent 10.8 12.4 17.0 41.8

Required Rate of Return: 8 percent (compound) LTC cost EscalationPercent 14.5 16.3 21.3 47.0

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The calculated results enumerated above in Tables 1 and 2 beggar any understanding.What emerges is that year 2000 quoted premium rates bear no connection to reality, ifreality must encompass a reasonable escalation rate in LTC cost, and also a reasonablerate of return from the premium cash flow paid to the insurance provider. For example, inyear 2000 a 72-year old's "level" (i.e., ""guaranteed"") annual premium is $4000, basedon a product with 5 percent cost inflation protection. Assuming a 5 percent return to theinsurance seller, the proper premium for the premiums to accumulate the required"Money Bundle" when the buyer reaches age 82 would have to be $25,300, and for an 8percent cost escalation, the "level" premium would have to be $31,300. The reason, ofcourse, is that in year 2010 the required "Money Bundles" would have to be $318,449based on a year 2000 "Money Bundle" of $195,500 for this product. Moreover, even at a15 percent return the premiums would have to be $15,035 and $19,400, respectively.

In short, and in the vernacular, "what's going on here?" "To cite another anomaly, in year2000 a 27 year old's "level" annual premium of $1060 would have to be $45,000 a year,for 55 years, to cover the required "Money Bundle" in year 2055 at his attainment of age82 if costs escalate 8 percent per year, whereas if the insurance company could earn 15percent on that product, and costs escalated a mere 5 percent per year, an annual premiumof $189 would suffice.

Possible Mitigating Factors

Several factors can contribute to a mitigation of the disparity between the required"Money Bundle" and the accumulated earnings from premiums (Table 1), or where thecarrier's required earnings rate on premiums appear too optimistic (Table 2) in order toaccumulate the committed Money Bundle. Possible factors are:

(1) A stretchout in benefit payments from the money bundle due to the needfor beneficiaries to justify claims tied to the qualifications to meet severalincapacity criteria which they might not always satisfy.

(2) A stretchout in benefit payments from the money bundle due to the choiceof beneficiaries for home care at costs one-third or less compared to carewithin a nursing home.

During the stretchout period the carrier can continue to earn a return on premiumaccumulation prior to either the initiation of benefit payments, or to a slower payout ofbenefits. Also it should be noted that the Money Bundle may become frozen at theinitiation of benefit payments in some contracts, mitigating the onerous effect on thecarrier of cost escalation.

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(3) An increase in intensity and quality of outpatient and inpatient hospital care,delaying the starting age for contracted Money Bundle benefits, benefiting thecarrier if its earnings rate were to be greater than cost escalation.

This mitigating factor relies on the much publicized and likely overall improvement inthe health of the aged, which, however, can benefit the carrier only if its earnings rateexceeds the cost-escalation rate by a sufficient percentage.

(4) Future public policy program implementations which will transfer a part of thecost of institutionalized care to taxpayers, as is the case now, where withexhaustion of a beneficiary's assets, Medicaid then assumes cost coverage. Butthe "welfare" model suffers from the demographic impact of a paucity of wageearners in the 35 to 44-year age cohort, as already noted.

(5) Premium escalation. Virtually every policy written incorporates (not in too visiblea location or typeface) a disclosure that premiums, while "level" can increasewhen and if the "class" (my term) of insureds are all then subjected to a likeincrease. This assures a war dwarfing the Social Security problem.

Conclusion

Clearly, the pricing of LTC insurance is structured without a sufficient appreciation forthe arithmetic of compounding. Combined with this unwillingness to face reality in thepricing is the seeming obliviousness of both sides of the commercial transaction, as wellas that of public policy analysts and policy makers, to what lies ahead.

ReferencesCadette, Walter M. Financing Long Term Health Care. Replacing a Welfare Mode withan Insurance Model. Public Policy Brief No. 59, 2000. The Jerome Levy EconomicsInstitute of Bard College, Annendale on the Hudson.Estes, Carroll L., and James H. Swan and Associates, 1993. The Long Term Care Crisis;Elders Trapped in the No-Care Zone. Sage PublicationsPetersen, Marilyn D. and Diana L. White. Health Care of the Elderly; an InformationSourcebook. Sage Publications"Promise Them Anything." The Selling of Long Term Care Insurance for the Elderly."City of New York; Dep't of Consumer Affairs. Mark Green, Commissioner.April, 1993Reps, David N. (1999) Care Insurance for the Aged; Financial Effects on the Buyer andSeller. Proceedings of the Association on Employment Principles and Practices (AEPP).Annual National Conference, San Francisco A Shopper's Guide to Long-Term Care Insurance. National Association of Insurance Commissioners. Kansas City, Mo. 1999"Stahl, Sidney M. (Ed), 1990. The Legacy of Longevity. Sage PublicationsU.S. General Accounting Office. December, 1991. Long Term Care Insurance: Risksto Consumers Should be Reduced. Report to the Chairman, Subcommittee on Health,Committee on Ways and Means, U.S. House of Representatives

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Re-examining The Responsibility of Auditors/Accountants to Non-Clients

Frederick D. GreeneManhattan College, School of Business

Alfonse R. PetrocineManhattan College, School of Business

Abstract

This paper discusses the responsibility of the auditor/accountant to non-clients,third parties who are not in privity with the auditor/accountant. The doctrine ofprivity or near privity applies to establish liability to such third parties. There issufficient nexus if the auditor/accountant knows that its work product will beused and relied upon by an identified non-client and there is some conduct on thepart of the auditor/accountant linking it to such party.

Keywords: Auditor/Accountant liability; non-client/third party responsibility; ethicalbehavior

An interesting question that is currently in vogue is to ask what liability does anaccountant have to a third party who relies on deficient financial statements that he/sheprepared? In responding to this question, a distinction must be made between criminallaw and common law. Criminal law involves intent or knowingly preparing falsestatements. This usually involves federal statutes or guidelines, such as Securities andExchange Commission (SEC) standards, and leads to a fine and/or imprisonment if foundguilty. This is the issue being litigated or investigated now in cases involving Enron,World Com, Global Crossing and Arthur Andersen & Co. Common Law, on the otherhand, involves civil remedies and damages for negligent performance or malpractice.There is little question that if one does an unprofessional job of preparing financialstatements for a client, he/she is responsible to that client for any negative consequencesthat may have resulted from reliance by the client on such statements. But what is theaccountant’s liability to third parties who may have relied on such statements? And whatimplications does this have?

In an extensive study by three professors at Georgia Southern University concerning theinterface of law and accounting, there was a finding of a trend toward a reduction of thescope of auditor liability to third parties in common law jurisdictions. They note that

From the 1960’s through the mid-1980’s, the expansion of accountant liability tothird parties for negligent misstatements was evident in the court decisions…During the last ten years, however, a trend has emerged … toward a morenarrower scope of auditor liability to third parties for negligent misstatements.(Pacini et al 2000)

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As we move into a new century, it is appropriate to reexamine this issue in light ofcurrent events. The factors that underlied the trend towards a limited concept of liabilitycould very well be those that give rise to an expanded concept of liability. But, beforereexamining the specific factors and trends, it would be useful to review the legal theoriesthat are involved – privity/near privity rule, restatement rule, and reasonable forseeabilityrule.

Legal Theories

A. Privity/Near Privity RuleThe public accountant concludes the audit of his client’s records with an opinion letter inwhich he sets forth, among other things, the scope of the audit and his professionalopinion concerning the financial representations depicted therein. Although third partiesmay foreseeably refer to and possibly rely upon the accountant’s opinion, nevertheless,the accountant is only contractually bound to his client and owes no legal duty to thirdparties for his negligence. The Doctrine of “Privity of Contract” has been applied in suchcases with the resultant finding that such persons are not third party beneficiaries, butincidential beneficiaries of the contractual relationship of accountant and client. As such,they can neither enforce the contract nor complain, in the legal sense, if the accountant’snegligent performance under the contract causes them financial loss.

The leading case of ULTRAMARES CORP. V. TOUCHE, NIVEN & CO. (255 N.Y.170 (1931) established the principle of law that the liability of accountants for theirnegligence in conducting audits is limited to those persons in privity with them at thetime of such wrongdoing. This decision by the Court of Appeals was written by therenowned Justice Benjamin Cardozo in 1931. In ULTRAMARES the accountants hadaudited a client’s balance sheet and expressed a favorable opinion thereon. Subsequently,they furnished the client with thirty-two copies of the balance sheet, knowing that itwould be distributed to obtain credit, but not knowing the amount or the identity of thepotential creditors.

In an action instituted by one such creditor, the trial court determined that theaccountants had indeed been negligent in the performance of their audit and that thebalance sheet improperly overstated the client’s net worth. Nevertheless, the highestcourt in the State of New York held that such negligence did not result in liability to thirdparty creditors. The Court of Appeals was unwilling to subject accountants to such apotentially broad range of exposure and stated:

If liability for negligence exists, a thoughtless slip or blunder, the failure to detecta theft or forgery beneath the cover of deceptive entries may expose accountantsto a liability in an indeterminate amount for an indeterminate time to anindeterminate class. The hazards of a busines conducted on these terms are soextreme as to enkindle doubt whether a flaw may not exist in the implication of aduty that exposes to these consequences.

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Through the years, Justice Cardozo’s words proved to be an impenetrable shield forlegions of accountants. ULTRAMARES has been cited in imnumerable cases as thelandmark decision protecting auditors from third party suits.

The doctrine set forth in ULTRAMARES supports the finding that accountants are notliable to an indeterminate class of individuals who may refer to or rely upon theaccountant’s negligent audit. However, in WHITE V. GUARENTE (43 NY 2d 356(1977), the Court of Appeals distinguished ULTRAMARES in finding that accountantsare liable in negligence to those persons who rely upon the audit opinion, although theyare not in “privity”, providing they comprise a group of specifically foreseeableindividuals who would sustain direct damage by a negligent and incorrect audit.

WHITE involved the fiscal year-end audit by Arthur Andersen & Co. of Guarantee-Harrington Associates (“Associates”) a limited partnership. Associates had been formedin 1968 for the purpose of serving “as a hedge fund through which the funds of itspartners were utilized in investing and trading in marketable securities and rights andoptions relating thereto.”

White, a limited partner, commenced an action against Arthur Andersen & Co., amongothers, based upon professional malpractice (negligence). The gravamen of his claimagainst the accounting firm was that Associates’ audited financial statements did notdisclose the improper withdrawal of $2,000,000 by the two general partners.

Arthur Andersen & Co., confident in its reliance upon ULTRAMARES, applied to thecourt to dismiss the action as against it, alleging that it did not state a claim which couldbe recognized. Predictably, the lower courts did so. But the Court of Appeals reversedthis order, holding that accountants may be held liable in negligence to third parties. TheCourt distinguished ULTRAMARES from the case before it on the basis that in Whitethe potential group of plaintiffs could be defined.

Here, the services of the accountant were not extended to a faceless or unresolved class ofpersons, but rather to a known group possessed of vested rights, marked by a definablelimit and made up of certain components (see ULTRAMARES CORP. V. TOUCHE, 255N.Y. 170, 182-185, supra). The instant situation did not involve prospective limitedpartners unknown at the time and who might be induced to join, but rather actual limitedpartners, fixed and determined. Here, accountant, Andersen was retained to perform anaudit and prepare the tax returns of Associates, known to be a limited partnership, and theaccountant must have been aware that a limited partner would necesrily rely on or makeuse of the audit and tax returns of the partnership, or at least constituents of them, inorder to properly prepare his or her own tax returns. The plaintiff was one of thoselimited partners, “ a member of a limited class” said the Court, “whose reliance on theaudit and returns was or at least should have been specifically foreseen.”

Of course, a literal reading of the WHITE decision might suggest that ULTRAMAREScontinues to be a weighty shield against third-party liability in all but the most limited of

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cases, i.e. where plaintiffs are “a known group possessed of vested rights, marked by adefinable limit and made up of certain components.” Moreover, WHITE could be limitedto its facts as applicable only to limited partnerships. But, in so doing, a significantnumber of questions arise. Does WHITE apply when there are 150 limited partners?Such a situation, although rare, may exist and seems to satisfy the above criteria. DoesWHITE afford protection to the individual who becomes a limited partner in relianceupon the audited statements? If such potential plaintiffs are protected pursuant toWHITE, is it conceivable that ten shareholders in a close corporation are not protected?In short, although the Court of Appeals took pains in WHITE not to overruleULTRAMARES, its decision certainly detracts from the sense of invincibility formerlyattached to ULTRAMARES. Undoubtedly, in future years there will be an abundance ofplaintiffs willing to undertake the costs of litigation, in suits against allegedly negligentauditors, hoping to stretch the WHITE criteria to fit their particular situations. In most,if not all, of these actions, the accountants will move to dismiss the case for failure tostate a claim, citing ULTRAMARES for the proposition that accountants are notnormally liable to third parties for negligence and distinguishing WHITE as limited to itsfacts. Only as decisions are reached in these cases will the extent of the expansion ofaccountants’ liability under WHITE become clear.

It is most important to note that the ULTRAMARES case pointed out that it wasestablished New York law that where an accountant renders an opinion for his client oremployer with knowledge that it will be exhibited to prospective creditors and investors,the accountant certifying such report owes a duty to such third parties to do so withoutfraud. Therefore, accountants owe a duty to third parties to conduct their audit withoutfraud even though the accountants reports are primarily for their clients and onlyincidentially for the benefit of third parties. The citadel of privity does not apply tofraudulent audits.

However, with respect to negligence, not amounting to fraud, the accountant is notgenerally responsible to third parties, unless the accountant is aware of a specialrelationship in that the third parties are the intended and special beneficiaries of theaccountant’s work product . It now appears that the doctrine of ULTRAMARES is verymuch alive and healthy. Although assaults have been made upon the “citadel of privityof contract”, the doctrine of third party beneficiary is as valid today as at the time ofJudge Cardozo’s decision. Unless the third party can establish a special relationship oran audit for his specific benefit with an undertaking that runs to him directly and notmerely incidentally, the third party would be devoid of a cause of action against theaccountant for the latter’s careless and negligent audit. As was mentioned by JudgeCardozo, in dicta, over seventy years ago, to effectuate a change in this doctrine, so aptlydecreed by ULTRAMARES and reaffirmed repeatedly over the years since, wouldrequire legislative enactment.

Accountants are liable to their clients, in negligence, for failing to perform theiraccounting services in a reasonable manner. They are also liable to those third partieswho, although not in privity of contract, are nevertheless specific and intended

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beneficiaries of the contract for accounting services and thereby occupy a specialrelationship with the accountants. Generally, accountants have no common law liabilitywith respect to remote third parties-those not in privity- such as corporate creditors andinvestors due to the fact that the potential liability would be catastrophic and by reason ofpublic policy considerations which dictate a finding of no liability.

However, there are courts throughout this country that are divided as to the continuedvalidity of the ULTRAMARES decision. Some courts continue to require that a strictapplication of the privity requirement govern the law of accountants’ liability exceptwhere special circumstances existed between the plaintiff and the accountant “linking”both parties and the accountants’ knowledge of the reliance of the plaintiff upon theaccountants'’financial statements. On the other hand, an increasing number of courtshave adopted a more flexible approach where special circumstances existed between theplaintiff and accountant, i.e. Iowa, Texas, Pennsylvania, Nebraska and Rhode Island.

In sum, it appears that the seminal decision of Credit Alliance Corp. V. Andersen & Co.,(65NY2nd 536) is still the law, at least in New York, as stated by the Court of Appeals atpage 551 therein:

“Before accountants may be held liable in negligence to noncontractual partieswho rely to their detriment on inaccurate financial reports, certain prerequisitesmust be satisfied: 1) the accountant must have been aware that the financialreports were to be used for a particular purpose or purposes: 2) in the furtheranceof which a known party or parties was intended to rely; and (3) there must havebeen some conduct on the part of the accountants linking them to that party orparties, which evinces the accountants’ understanding of that party or parties’reliance.”

B. Restatement RuleAn expanded notion of accountant liability to third parties was incorporated into theRestatement (second) of Torts (552, 1977). Under this standard, an accountant whoaudits or prepares financial information for a client:

(1) Owes a duty not only to the client but to any other person or a limited group ofpersons, whom the accountant or client intends the information to benefit; (2) ifthat person justifiably relies on the information in a transaction or onesubstantially similar to it that the accountant or his client intends the informationto influence; and (3) that person suffers a pecuniary loss as a result of hisreliance. (Pacini et al 2000 p. 177).

“The major difference between the primary benefit rule of ULTRAMARES and theRestatement standard is that the latter does not require that the identity of specific partiesbe known to the auditor, only that they be members of a limited group known to theauditor.” Essentially the Restatement Rule enlarges the class of persons to whom the

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accountant owes a duty to identifiable beneficiaries and to any unidentifiable members ofthe intended class of beneficiaries. (Pacini et al 2000 p. 178).”

C. Reasonable Foreseeability RuleThe Reasonable Foreseeability Rule further extended an auditor’s liability to all thosewhom the auditor should reasonably foresee as receiving and relying on the auditedstatement In Rosenblum v. Adler 461A 2nd 138 (NJ 1983) the court established the rulethat the “auditor owes a duty of care to all who obtain a firm’s financial statementsdirectly from the audited entity but owes no such duty of care to those who obtain it froman annual report in a library or from a government file.”

While at the time, this case greatly extended the accountant’s duty of care to reasonablyforeseeable third parties under certain circumstances, subsequent passage in March of1995 of an accountant privity statute, has rendered the holding in Rosenblum essentiallyineffective. (Pacini et al p. 179) Though currently, only two jurisdictions, Mississippiand Wisconsin, follow the reasonable forseeabiltiy standard, it is important to recognizethe potential of such a rule.

Liable to Whom?

Review of the differing legal standards of accountant liability to third parties goes from anarrow scope of duty to non-clients to an all inclusive concept. The privity or nearprivity rule is considered the most restrictive and the reasonable foreseeability standard isconsidered to be the most general. The judicial interpretations tend to balance theaccountant’s right not to be exposed to unlimited liability against the right of a claimantwho relied on negligently prepared financial statements prepared by that accountant.

According to Pacini et al (p. 180) the trend toward a narrower scope of liability began in1986:

“Since that time, twenty-nine states have either: (1) enacted an accountantliability statute; (2) judicially adopted or reaffirmed restatement, Credit Alliance,Ultrameres, or privity rules; or (3) judicially rejected the reasonable foreseeabilityrule.”

Generally, the reasonable foreseeability rule, although attempting to rectify innocentreliance on negligently prepared financial documents, was not acceptable as it exposedthe accountant to unlimited liability to unknown third parties. On the other hand, closerexamination of the privity or near privity standard reveals not a strict restriction but amore flexible standard. For example, in Credit Alliance v. Arthur Andersen & Co., aspreviously noted, a three prong test was established that a non-client must meet in orderto have a valid cause of action.

The Restatement Standard also represents a balance between the rights of the accountantand the rights of individuals who relied on negligently prepared financial statements.

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Therefore the liability owed by an accountant to a third party is neither unlimited nortotally restricted.

Swinging Pendulum

The pendulum of justice in attempting to achieve equality, may swing from one extremeto another. The area of accountant liability to third parties who are not privy to a contractis illustrative of this fluctuation.. It began with an initial restrictive interpretation at a timewhen public policy tended to favor corporate entities. However, as this standard waspursued, in the court of public opinion, this was viewed as allowing accountants freereign. This in turn gave rise to a broader concept of liability that included increasedlitigation, policy factors in judicial decisions, benefits encouraging optimal levels of care,and reform efforts by the accounting profession. Then in 1986, the pendulum returnedtoward a reduction in the scope of auditor liability to third parties in common lawjurisdictions.

However, as we enter the new millennium,based on current events, we may see anotherswing of the pendulum. The news is continually reporting incidents of major companiesalong with their accountants/auditors having misrepresented financial statements. Enron,World Com, Global Crossing, Xerox are just a few of the names in the news.

A number of factors can be identified as influencing the movement of the pendulum.These include increased risk of litigation, policy factors considered in judicial decisions,and the tort reform efforts of the accounting profession.

Increased Risk of Litigation

One concern about expanding the size of the class to which an accountant or auditorowes a duty of responsibility is related to the “expectations gap” This gap “refers to adifference between auditors understanding of their function and investor, creditor andother users’ expectations of the accountant’s role. Financial statement users believeindependent auditors have a greater responsibility for detecting and reporting fraudand/or financial misinformation than was being met. Another aspect of increased risk oflitigation reflects a concept that can be referred to as the insurance hypothesis. “Theaccountant is deemed to be a “deep pocket” because the auditing firm carries malpracticeinsurance or in many cases, is the only solvent defendant in a lawsuit”. (Pacini et al p.217) .

Policy Factors Considered in Judicial Decision

Expansions of auditor’s liability to third parties moved the scope of duty away from blindadherence to a privity or near-privity standard to a version of the reasonableforeseeabiltiy rule. The expansion of accountant liability to third parties was part of alarger movement in tort law toward encouraging risk creators to employ optimal levels ofcare or allocating accident costs to parties able to bear the losses. Courts predicted

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numerous benefits from the expansion of accountant liability to third parties: (1) morethorough audits; (2) compensation to the innocent third party who had relied on adefective audit ; and (3) would promote more equitible sharing of losses. However,these benefits failed to materialize and the stage was set for judicial consideration.

“In sum, the consequences of the expansion of accountant liability to third partieslabeled by courts as “policy factors”, when distilled to their essence, providestrong justification for auditors owing a legal duty to a reduced number of thirdparties”. (Pacini et al p. 221)

Reform Efforts of the Accounting Profession

A reaction of the accounting profession to the litigation crisis has been to mount acampaign aimed at leveling the playing field upon which liability claims are resolved. In1986, the American Institute of Certified Public Accountants (AICPA) proposed a modelaccountants privity statute. The model statute is now incorporated as section 20 of theUniform Accountancy Act (UAA) a comprehensive hill to regulate the practice of publicaccountancy released by the AICPA and the National Association of State Boards ofAccountancy. (Pacini et al p. 222). The trend toward a narrower scope of accountantliability has been accompanied by strenuous efforts mounted by the accountingprofession with the goal of legislative reform . Section 20 of the UAA would beclassified as a near privity doctrine that follows the Credit Alliance decision.

Discussion

The foregoing has demonstrated how accountant liability to a third party has evolvedover time. Throughout history there has always been a balancing of accountants beingfaced with unlimited liability and the right of individuals to be compensated forinnocently relying on a negligently prepared financial statement. The pendulum of justiceattempts to maintain a balance with continuing adjustments being made as needed.

While the doctrine of privity or near-privity has a strong foundation, it has been subject tochallenge. Defining who is a beneficiary of a contract between an organization (client)and an accountant (auditor) takes on new meaning in today’s environment. Arestockholders (investors, pensioners, etc) intended beneficiaries? Is an auditor whofollows a corporate executive’s order to “cook the books” negligent?

As such doctrines are examined, consideration should be given to the following groups:non-clients; lenders/investors; and accountants.

Non-client – the near privity concept should prevail as defined in Credit Alliance. The“linking requirement” will probably be further extended by court interpretation.

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Lenders/Investors - this group will be more inclusive but will also require due diligenceon their own part. The accountant will not be the deep pockets source for all loans andinvestments which fail. Just as accountants will be held to a higher standard ofprofessionalism, so will the lender/investor be held to a higher level of sophistication.

Accountants - the professional code of conduct will include standards to be adhered toand define what level of liability will be owed to third parties.

During this current transition, three general thoughts should be noted. First, it wouldbehoove a client, such as a small business person, to let the accountant know that thefinancial statements will be used for obtaining a loan and/or raising capital. Ideally therewill be some contact (probably in writing) between the accountant and the capital source.Secondly, it is recognized that most accountants do act professionally and do notperform negligently in preparing financial statements. Thirdly while our focus has beenon auditors/accountants generally, the principles or ideas discussed, have similarimplications for other professionals, especially in the consulting area.

References

ULTRAMARES CORP. V. TOUCHE, NIVEN & CO.(255 N. Y. 170, 1931.)

WHITE V. GUARENTE(43 N Y 2nd 356, 1977.)

CREDIT ALLIANCE CORP. V. ANDERSEN & CO.(65NY 2ND 536, 1985)

ROSENBLUM V. ADLER(461 A.2d 138 (N.J. 1983.)

RESTATEMENT 2d OF TORTSUNIFORM ACCOUNTING ACT, SECTION 20,SPONSORED BY THE AICPA AND THE NATIONAL ASSOCIATION OF STATEBOARDS OF ACCOUNTING (NASBA)

PACINI, C. MARTIN, M.J. AND HAMILTON. LI (2000) AT THE INTERFACE OFLAW AND ACCOUNTING: AN EXAMINATION OF A TREND TOWARD AREDUCTION IN THE SCOPE OF AUDITOR LIABILITY TO THIRD PARTIES INTHE COMMON LAW COUNTRIES. American Business Law Journal 37:2 171-235

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Global Employment Practices: Learning From Levi Strauss

Tara J. RadinHofstra University

Abstract

While, in the United States, employment discussions often focus on issues such asdiscrimination, termination procedures, and employment-at-will, basic rights are injeopardy in many areas of the world. The right of free association is virtually unheard ofin countries like China, and child labor remains an ongoing concern in countries such asBrazil. Many companies do take advantage of relaxed enforcement of internationalstandards. This is not true of every company, though. A number stand as models of avariety of types of responsible behavior.

The purpose of this paper is to explore global labor practices, particularly in order toreveal positive models of responsible behavior in the international arena. Levi Strausswill be discussed as an example of a company that endeavors to treat workers withrespect. This case study will then be linked to the practices of other firms.

Analysis of the behavior of such companies will then be incorporated in a discussion ofglobal corporate citizenship. Corporate citizenship is not just about philanthropy, butabout philanthropy and much more. This paper will show how responsible treatment ofworkers is an integral part of how companies are participating as corporate citizens, andhow this has an impact on their bottom lines.

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The Ethics of Recent Corporate Governance Scandals: An Agency Analysis

Richard FitzPatrickManhattan College

Lawrence HugginsManhattan College

Abstract

The philosopher John R. Boatright provides a useful ethical framework for analyzingconflicts of interest (Boatright, 1993). He argues that conflict of interest is bestunderstood in the context of one’s role obligations.

A conflict of interest is a conflict that occurs when a personal interest interfereswith a person’s acting so as to promote the interests of another when that personhas an obligation to act in that other person’s interest (Boatright, 1992).

The ethical basis for the agency relationship is the duty to honor a contractual orunderstood agreement between parties. The agent must act solely for the benefit of theprincipal in all matters connected with his agency. All that is required for a conflict ofinterest is that an interest interfere, either actually or potentially, with the performance ofan agent’s duty. All instances of conflict of interest, whether personal or impersonal,actual or potential, are morally suspect and should be avoided.

This paper will adapt Boatright’s approach to conflict of interest by delineating theessential obligations of agents under the common law of agency. A typology of conflictsof interest will be identified. The subsequent normative model will be used to analyze theprominent scandals of corporate America of the last few years.

References

Boatright, J. R. 1993. Ethics and the conduct of business. Englewood Cliffs, N.J.:Prentice Hall.

Boatright, J.R. 1992. Conflict of interest: An agency analysis. In N. E. Brown & R. E.Freeman (Eds.), Ethics and agency theory: 191-194. New York: Oxford University Press.

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Equity Accelerator or Else? An Analytical Evaluation of an Unfair Practice

K.TopyanManhattan College

Abstract

This paper attempts to analyze the “Equity Acceleration” process offered by many banksand other mortgage providers. If you have a mortgage on your home, you may receive anoffer from your mortgage company to participate in a bi-weekly mortgage offering suchas BiSaver, or Equity Accelerator. You may see other names under the offer, since quite afew companies are operating in this market. This process may be summarized as follows:Customers can set up a biweekly schedule prior to closing or enroll in the EquityAccelerator Program, which allows customers to pay half of their mortgage paymentsevery two weeks by electronic draft. In general, regardless of the company’s name, theyall make one simple offer: They save you money. While they are not, in general, clear onthe issue that saves you money, even the most radical opposition to the issue claims that

Just as "credit card protection services" they provide a convenient way ofnotifying banks if your credit cards are lost or stolen, bi-weekly mortgageconversion programs provide only convenience, without any savings themselves.

In reality, this paper shows that these programs do not save you money, but they costyou; much more than one should pay to a little “convenience”. It is indeed quite easy toshow that companies operating in this area are benefiting quite a bit and customers ofthese companies, or those who have signed up for these services losing quite a bit!

Again, the underlying process is widely criticized but the critics are centered around theproposition that “although biweekly mortgage programs promise to save thousands ofdollars while paying off your mortgage years earlier, that savings is not a result of anykind of biweekly magic, but results from the compounded interest that you avoid payingby increasing the rate at which you repay your mortgage, something that most mortgageagreements allow you to do simply by sending additional funds along with a note askingthat the extra amount be used to reduce your principal.” Now, this proposition admits thebenefits but criticizes the source of the benefits.

This study clearly shows that the former critics are not strong enough, and actually it isquite easy to show that this so-called acceleration process will hurt the customers of theseprograms.

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