Author reviews the debate on the kind of connection which should exist between the business and academics. The article negates the prevalent notion of maintaining a gap between practitioners and academic scholars. It was mentioned that the strong dependency on external donations, use of inventions for personal benefit by the professors, biased evaluation and appointment of doctoral scholars as faculty post-Ford criticism  were some of the arguments used to negate the notion. Using hypothesis of existence of the relationship between business and academics, it was shown that the value of ideas generated by the management research is low as compared to those generated by the professionals. Several reasons were responded for this purpose. The validity of intensive of focus on the flaws in the sample, method or both have been questioned, when even after taking such precautions, the ideas of management research are not found very competitive as compared to other sources of ideas.

The problem or the source of the failure was discussed in detail by the article which helped in designing the solutions for making management research more relevant and competitive to the real world needs. One of the major problems identified is journal’s focus in academics. It has been argued based on the several evidences presented in the article that most of best journals in academia have a conservative focus, which dictates there article review process. The common biases of the article published by them are for the article rich with methods and theories, novelty, agreement with present belief, significantly positive results and authors from high-prestige institutions. Along with the bias, the tendency to influence original thoughts of the author by the editors/publishing group and fairly low levels of agreement among referees makes the review process unreliable and ideas presented by these journals to be of lesser relevance.

Other than the journal review process, fault in academic career processes in Business Schools and competition among Business Schools are other responsible reasons raised in this article. The focus on estimation of the individual’s contribution has discouraged collaboration among people and creation of environment which can foster collaboration. In addition, the use of citations as the yardstick instead of management practice has further affected the market potential of the work. Competition among Business Schools for limited resources and status has made them to imitate each other superficially without understanding the basics. One such act among the most has been to focus on the number and location of publications of the people in deciding the status and resources for the school.

The solution for such a product is given in next article.

This approach has created rat race which was rightly criticized by the author. It has created a shift in focus from serving others and life to mind to “win at all cost”. This scenario has been aptly explained by the author using various indicators like increasing self-citation, looking for ranking among the faculty and team production to provide more exposure to the research and to increase publication rate. However, team production and disconnect with the people living in different regions of world but engaged in similar profession appears contradictory and has not been appropriately clarified by the author. It may be said that although team production indicates the prevalence of notion of “Win at all Costs“. It has also contributed in bringing people from different regions and background to come together and coordinate for a singular objective, which to certain extent has helped in reducing the disconnect between the people.

This mindset as criticized has lead to deterioration in quality of the efforts both in teaching and research. The argument has been appropriately supported by the facts related to the current status of some of the existing and important domains of research, which are somewhat at a standstill. The shift has been causing the researchers to find the ways to get his/her work in “A-rated” journals, rather than focusing on the actual contribution of the research in the field. Similarly, in case of the teaching the presence of unethical and self-interested behaviour in faculty has lead to the passing on of this trait to the students, making them focus more on the placement quality rather than on teaching quality.

It has been strongly argued that the future is bleak based on the fact of stagnated research, poor research questions, inability of the teachers to the shape the proper life of the students and disconnected world. All this has been the side-effects of this culture, endangering the cherished Golden Age phenomenon, which has been widely accepted or as per author can come in immediate future. Step motherly treatment to the innovators and courageous people by such a culture is the main hindrance makes the future bleak as they intend to think out of the box and hence cannot be measured by with in the box indicators. But, such use of biased indicators has been forcing them to shift from treadmill of development to publications.

It has been suggested by the author to connect with people and focus more and more on asking the right questions, so as to come up with more important and relevant questions which can play some real role in development. This approach can be viewed with advantages of exposure, which increase both the knowledge and experience domain of the person, and support from people from several disciplines and regions making the effort more logical and cost effective.

Along with questions, the demand for a more holistic way of evaluation was made. It is evaluation style which does not see the person merely in terms of the numbers which it holds but rather in terms of its impact on the society through those numbers. For example, Bhabha Atomic Research Centre (BARC) being one of the premier institutes in India but it has yet to deliver any concrete output which can contribute significantly to the development of the nation. This can have significant relevance in terms of shifting the focus of the individuals and their universities from ranking to shaping a better future, as this article as well as this approach implicitly indicates that with removal of stress of running behind numbers, people can actually follow the dream with which they had actually came to academics, which is mainly to give life to the mind and to serve others.

Though, data transparency is an important issue rose in the article and has been addressed as one of the important solution, no concrete evidence has been provided when issue concerns the data used and analyzed by the auditors. In addition, based on the overall presentation of the paper, where for every claim strong numbers and evidences has been provided, lack of adequate evidence do not make argument convincing. The very best it can be assumed that this argument has arose based on the personal experiences of the author, but no personal experience has been cited, hence this argument can be used as a caution to prevent occurrence of any such issue.         

Courage by the universities is one of the major recommendations made by the author to prevent the audit culture to influence the functioning and goals of the universities. This is critical recommendation as this has the potential to make university immune to the environment, which in this case is society perception. It is a challenge the implement this solution, as strong correlation between business and growth and development of the world will attract society and its auditors to regulate and assess universities activities for maximizing perceived benefits. As pointed by the article, society interference has not been very successful, but then no society likes to be governed by an invisible hand, which is business in this context. The approach of the society can be viewed from a larger context of decentralization and user participation driven approach, which is a concept in vogue in planning and governance. This shift from centralization to decentralization has made society more proactive not only in the political domain but also in the academic domain. 

In conclusion, it can be said that a very strong and relevant argument has been presented by the author, though the efforts to provide such strong arguments has lead to the creation of some bias in the article leading to the ignorance of certain positive change which the current approach has brought and the challenges with the improved approach. The issues affecting the performance of the universities and its manpower have been addressed with the well represented examples and data, along with some feasible solutions. However, the certain ideas like better involvement rather than excluding society from the university, benefits of the team production and its possible future implications and challenges in preventing the society interference in the universities has not been explored.       

Motivation has a desire to bring improvement as its basis.

While motivated employees may be good for business, that same motivation is also good for them. Motivated people have a better outlook and tend to be more energetic on the job. When employers find ways to motivate employees, they are doing both themselves and the employee a favor.

Manipulation tends to be self-serving and does not actually regard the feelings or desires of those being motivated.

Manipulation is a way for one person to get someone else to do something that is wanted or needed without the second person receiving anything significant in return. This method of getting others to do something usually results in a loss of true motivation. When people realize that they have been manipulated, it is normal for them to feel used or even abused because of it.

Try to determine if you are motivating or manipulating.

One simple way to avoid becoming a manipulator is to determine why you are asking a person or group to accomplish a task. If it is to get you out of doing it or to get something for free, there is a good chance that you will be using manipulation to get the job done. Examine the outcome of the process. Is it highly likely that the person who does the work will feel good about the job or receive some personal benefit from it? If this is not the case, you can assume that at least part of the process is more manipulation than motivation.

Motivation will generally lead to bigger and more enduring outcomes.

When motivation is used to achieve a goal, everyone will walk away feeling a sense of completion or accomplishment. Like physical exercise, motivation will have an effect that carries forward after the task at hand is completed. A person who has been motivated to do it once will often be eager to do it again. Even more significant is the fact that motivation in one area will usually pour over into the other endeavors that the person does. He or she will not only be improved as an employee but also as a person.

As leaders and managers, people must be careful to use motivation and not manipulation.

In order to get the best results from workers, you need them to want to work for you not just to do their job. Managers who motivate employees receive satisfaction from watching those employees grow and not just produce. Learn to celebrate the accomplishments of those that you lead. This motivates them to press to perform more and better quality tasks.

Executive Summary

When life gives you lemons, make lemonade. That is the ever popular saying when it comes to dealing with situations that seem impossible to get past. Having problems like these in the workplace, however, may not be as easy to overcome by simply striving to do so. Every minor bump in the road has a major impact on how the average working person performs and behaves. It can go from a dedicated and motivated worker to a suddenly stressed out worker who is ready to give in and wave that white flag to give up. No matter how hard people try to acclaim that business is business and that it has nothing to do with the people on a personal level it is inevitable that emotions and how people are feeling directly impact the decisions they make and the style of performance they show. Each individual reacts to a given situation differently. Some work well under pressure and can handle themselves when there is negativity surrounding the project while others need more positive motives and need to feel like they matter in completing the goal’s objectives. This report will highlight the observation of two researchers, Teresa Amabile, the Edsel Bryant Ford Processor of Business Administration and a Director of Research at Harvard Business School, and Steven Kramer, a developmental psychologist, and what they have discovered when wanting to guide the leaders of today on how to maximize the performance of their employees.

    The Progress Principle has been set up to give insight on how workers interpret what goes on around them, how it makes them feel, and what their reaction to different circumstances may be. It dissects the activities at seven different companies to show both the negative and positive reactions that were made when dealing with the managers and situations within those companies. It gives definition to main points that will allow the manager of today to better assess situations and approach their employees in a way that will motivate and inspire them to work harder and want to succeed. In keeping the people in mind, the manager will have a better working team and ultimately will achieve the company’s goal in a timely and professionally way that will overall generate a better outlook of the company from the perspectives of not only the customers but also the employees embedded into that process.
    This book has shown the many ways we as employees use what is happening around us to reflect how we perform whether we actually realize it or not. It contains examples of situations where the company mentioned was doing well, in a slump, and even going under. It shows how the situations at hand either motivated or demotivated the employees and even changed their outlook on the company as a whole. It shows the reader how the inner work life can drive the performance of a worker, defines and embellishes the topic of the progress principle, and gives steps and tools in deciding how to handle certain situations. To take advantage of the advice given in this book would be showing that you as a leader and/or manager wants to do what is best not only for profits and the company but to ensure that your support system within your team is satisfied to the extent of having the drive to achieve what is needed to be done.
    In the beginning of the book, the introduction reflects on how Google has given its team continuous hope and motivation by providing numerous lavished perks at the disposal of every employee whenever needed. They have facilities which include world-class chefs, shuttles with Wi-Fi connection to get from building to building, game rooms, availability to bring a dog with you to work, and even a 24 hour gym. This gives the workers a meaningful inner work life which will be explained within the report that gives each employee the motivation to want to work hard and be successful for the company that cares about not only the needs of the company but the needs and feelings of its employees as well.

The Ten Things Managers Need to Know from The Progress Principle

   
1.    Managers need to treat their employees with respect. How employees are treated will reflect in how much effort they put towards their job tasks. If an employee feels disrespected or looked over, they will not have the motivation to do their job well.

2.    People’s inner work life needs the drive to do something meaningful. If your inner work life is lowered, your performance will suffer as well. If you do not feel like the work you are putting in has any value or you don’t trust your company, then there will be little drive to pursue tasks given. In order to strive to do your best, you need to feel like what you are putting effort into will be acknowledged and used towards the common goals of the company.

3.    Managers need to understand the three components of inner work life. Perception/thoughts of how workers make sense of the organization, managers, coworkers, their self worth, the work being done, and have a sense of accomplishment need to be recognized. They need to acknowledge each individual’s emotions/feelings when reactions to positive, negative, and overall emotions and moods. And, the employee needs to have the desire to do the work, know what to do, whether or not to do it, how to do it, and when to do it.

4.    Giving not only compensative incentives will help boost employees’ willingness to work hard. Allowing workers to take time off or have a certain break for recognition of working hard and striving towards a goal will help them become better motivated to improve their productivity knowing their efforts are being recognized and rewarded.

5.    Managers need to measure the performance of each individual by allowing room for creativity, making sure productivity is constant, seeing commitment to the work being done, and finding team members who are participating in collegiality by finding ways to contribute to team cohesiveness. As a manager or leader, once your team members understand what they are working for and have the freedom to think freely, speak freely, and give value to the tasks given their productivity rate will increase.

6.    The key influences on inner work life are the progress principle, the catalyst factor, and the nourishment factor. The progress principle focuses on using small wins, individual and/or team breakthroughs, forward movement on projects, and goal completion to add to a person’s inner work life. The catalyst factor supports the work being done by setting clear goals, allowing autonomy, providing needed resources, helping with the tasks given, learning from problems that arise as well as success, and allowing ideas to creatively flow. The nourishment factor supports the individual by showing respect for what he or she is doing, encouraging the employee to continue giving positive effort and maintaining the goal, showing emotional support, and affiliating that worker with the project and showing that they are contributing to the project and the company. All of this put together will improve the inner work life positively.

7.    Managers need to use catalysts to improve productivity within their organization. The seven main catalysts are that managers and their organizations set clear, specific goals, they allow employees the freedom in how they work and give room for creativity, provide the needed resources to fulfill the duties given, allot enough time but not too much to complete each task, help  with the work given by brainstorming, collaborating with a struggling coworker, or informing employees so that they know what they are getting into, and allowing ideas to flow with positive feedback and criticism that will invite employees to openly come to you with new ideas without fear of a harsh turndown.

8.    Nourish your employees by connecting with them on a personal level as well as a professional one. Show them the respect and recognition they deserve while working on a project, use enthusiasm to encourage workers to get motivated about the work they are doing, acknowledge when a coworker is struggling due to frustration or happiness and extract the negative while building off of the positive, and make sure there is a human connection throughout the workplace by giving people the affiliation they are looking for involving trust, appreciation, and appropriate affection.

9.    A small win can trigger a larger positive reaction within a person. Constant little achievements will help keep you motivated and give you the drive to complete tasks along with the self-worth and knowledge that you can do it. Positive events help build people’s expectations of themselves up. It is also true, however, that a small loss can be just as powerful if not more so. Usually the negative events will cause a much harder turnabout in a person’s productivity. In order to stay on task and keep your head up, try to focus more on the positive and learn from the negative without dwelling.

10.    As a manager, you need to realize that people are your most prizable asset. It is the people who work on the tasks and the projects that keep the company as a whole running. Without the insight and motivation of your employees, the company would fail. Showing that your employees are providing a meaningful addition to the company and that you understand, respect, and know where they are coming from will help them feel more dignified in the work they are doing. If a person gets recognition for the work they are doing, that makes them want to impress and strive for success even more knowing what they are doing is making a difference and helping others.

Full Summary of The Progress Principle

Introduction

The Progress Principle was designed to show how leaders in the business world can maximize the overall status of a company by focusing on the employees and their state of mind when it comes to the daily struggles and tasks given to them. Through the authors’ research provided within the book, the key steps to finding the best ways to better motivate the employees are shown through facilitating the feeling of accomplishment and progress. Using every situation, even “small wins”, the managers hope to gain the employees maximum ability to proceed successfully to the goal of the company. The observations made were pooled from seven different corporations whose names have been altered for discretional purposes by asking the workers to fill out a diary form which asked questions about their day towards the end through a period of 12,000 days. What was discovered from these diaries was as follows: the inner work life of employees does influence their performance in the workplace, the strategy execution done by the company depends solely on the people involved in the organization, there are three events in which forces managers to embrace and support inner work life, the progress principle is the most powerful tool in developing meaningful work, there are negative forms to this theory like any other, and those negative events can overpower the effects of the positive ones no matter how big or small the situation may have been.

Scenes from the Organizational Trenches: Chapter 1

We start the reading off by observing a situation from a top company who is in the process of auctioning all of their possessions off due to a failed company. The former employees saw this as unrealistic, watching in a state of awe and disbelief. They were angry, disgusted, and saw the auction as a funeral. Four years prior to this event, it seemed like the company was at the top of its game and had a successful and innovative way or performing. As the years went, the company’s employees felt less like working for a company they believed in to working in a business trench. The company brought in a new executive team which told the employees that they would have autonomously responsibility for new projects within their designated areas within the company and that this new team would support them with limited interference. This turned out to be untrue when the annual meeting went from the team pitching new ideas and the executive chairs gave the team a different strategy to pursue after all of their hard work on the initial game plan. The creative freedom of the employees was taken away without giving their insights a chance to succeed. This brought frustration and unhappiness into the workplace as well as changed the workers’ view on their management staff. The bad morale decisions of these higher ups made the turnover of the company what it became. In short term, it damaged the motivation and performance of the employees. However, in the long run it caused the entire company regardless of its previous status to plummet. The idea of the ability of a small win to uplift performance is explained through working in a way that triggered a larger reaction than the actual event itself. If this is continuous and the small wins keep the team motivated, then the overall success of the company is good. Any minor negative event, however, has the same power to turn things completely around. Inner work life is a key aspect observed within this exercise. It is defined in the book as “the confluence of perceptions, emotions, and motivations that individuals experience as they react to and make sense of the events of their workday.” The decisions we see our managers make and the company make is automatically analyzed by the employee. Why is this happening? What are their motives and thoughts behind doing it this particular way? It makes our minds evaluate the situation and give it value of whether or not the task is important and how much effort we see necessary to give to the project. Due to inner work life, a small situation could impact a worker even after that event passes. In the first company’s situation, taking their decision making freedom away caused them to throw away their hard work due to people who were not directly involved in the process. It caused them to feel discouraged, unmotivated, and lacking drive.

The Dynamics of Inner Work Life: Chapter 2

Obviously observing a person’s inner work life is difficult since this is done intrapersonally within each individual. It is made of three main components – perceptions/thoughts, emotions/feelings, and motivation/drive. Perceptions/thoughts reflect on the organization, the people involved in the organization, the work being done, as well as the sense of accomplishment felt by the worker. Emotions/feelings are reactions workers have using both positive and negative emotions and their overall mood driven from the workplace. Motivation/drive dissects what the worker is trying to accomplish – what they need to do, whether they should do it, how they should approach the task, and when should they pursue this. No matter how someone tries, their emotions are not able to disappear. There is no off switch when it comes to human interaction and reactions within situations. The perceptions can work either immediately or cause an imprint on the thinking process in regards to the company. Motivation keeps the employee continuously striving to achieve the task given at that particular moment. It is the determination and drive we use to give the desired amount of effort in achieving that goal. Motivation can be intrinsicly or extrinsicly done. Extrinsic motivation is most common today as it pertains to giving the worker the drive to complete a task in order to get something in return for it. Intrinsic motivation is more a state of mind – you do what you do as well as you do because you love what you are accomplishing. There is also relational, also known as altruistic, motivation which is based on the need to connect with and help other people. Knowing that what you are doing can help others gives you the drive to work hard at it. All of this is related to the inner work lie system which takes each category and meshes it with the individual’s performance as well as the events of each workday. As it was observed, the event triggered sense making of what was being done and uses back-story of the people or company involved to analyze each situation which in turn causes reacting from the employee. The decisions we as managers make are constantly being judged and because of those judgments can have effects on how our team sees us as a leader.

The Inner Work Life Effect – How Inner Work Life Drives Performance: Chapter 3

An employee of a hotel was given time in the afternoon to leave work in order to see her daughter perform in a school play. This action allowed Helen, the employee, to exercise her inner work life and made her day at work a more productive and pleasant one. This took effect even before entering her office. She was motivated to get work done, she stayed in a positive mood continuously throughout the day, and she didn’t even mind when she had to stay later than usual to complete her work. Giving her that special time with her family gave Helen the drive she needed to get through her day and be as productive as possible to return the favor her company had given her. Triggering great performance varies from employee to employee some strive on being stressed and having extreme deadlines while others would rather work under joyful influences. Having negative pressure signals that there is a problem and it is up to you to solve it. However, the only motivation some workers need is to have the satisfaction within what they are doing, their job, and staying in a positive state of mind. As positive as Helen’s previous situation was, the hotel later became subject to a takeover in which Helen was previously employed with but was terminated. Who once was happy and upbeat about her job, once this negative event spurred up Helen was effected by the news of the takeover due to previous negative emotions. One can measure performance based on four categories – creativity (coming up with novel and useful ideas), productivity (steadily getting things accomplished and constantly giving high quality and successful work), commitment (supporting the work, the people, and the organization), and collegiality (contributing to the cohesiveness of the team). Creativity is generated from being in a positive, happy mood. Being in a positive state can lead a worker to a more creative problem solving ability. It also helps to have a good support system when generating creativity. These add value to the inner work life which in turn translates into performance of the employee. Negative situations cause less creative, less productive, and less committed performances. The inner work life generates from three perspectives involving the worker’s attention to the tasks at hand, the engagement within the project, and the intention of the employee to work hard. Relating your job to a significant meaning personally gives people the intention to continue giving effort in their performance. If it is no longer challenging and enjoyable, people will lose interest in what they are doing. It has even been found that a person’s emotion can be a reflection on their physical health. Happy and healthy workers are better, more productive ones. Companies that insult the inner work life experience of their employees and disregard them are adding fuel to an enterprise to go from the top to a stammering low.

Discovering the Progress Principle: Chapter 4

Triggering the positive emotions of satisfaction, joy, and meaningfulness leads to self-induced worth and a positive outlook on a person’s work and the company for which they are working for. Making progress will lead workers to a more positive inner work life as well. That feeling of accomplishment will boost the inside analyzation of one’s self and therefore allow the creativity and motivation to grow within. Management needs to be in charge of removing any interior barriers from the motivation of their employees. Barriers such as distractions from the worker’s motivation and work may involve the employee’s mindset, insight on the project, or even the hunger within (literally). Making your workers feel empowered and important attached value to not only them but in return to the organization. It was also observed that out of all the positive events that seemed to influence productivity, being involved in meaningful work was the most powerful. Small wins for a worker seemed to project even stronger positive effects. Along with that a small lose caused an even powerful negative effect as well. How do managers detect that the company and employees are making progress? To determine this, the company needs to focus on designing each individual’s job so that the workers will realize the results that are coming from their productivity and what that result means in the eyes of the company. There are three key influences within the progress principle. The factors reflect both setbacks as well as progress within this system. The progress principle is the first where events are shown influencing the inner work life. It uses small wins, breakthroughs, and goal completion to improve the worker’s inner work life positively. Secondly, there is the catalyst that directly supports the project or task at hand in regards to the work being done. This is used to set goals, give freedom in creative sectors, provide resources and time, and give help and learning opportunity to the employees. The opposite of the catalyst would be the inhibitors and toxins that denourish the progression within the company. The nourishment factor is the third in which the event shows support for the individual by influencing respect, encouragement, support emotionally, and even affiliation with the overall process.

The Progress Principle – The Power of Meaningful Accomplishment: Chapter 5

There are five factors that influence motivation within the employee – recognition, incentives, interpersonal support, clearly defined goals, and showing support for improved progress in the work being done. The manager should be acquired to facilitate the progress of his or her team on a daily basis. When someone says the line, it’s not personal, it’s business. They are clearly in denial due to the simple fact that we as human beings connect to and with everything personally. Work is personal – it is what we invest all of our time and efforts into on a daily affair. Due to a person’s work being so influential, any type of setback or progress in the work they are doing are equally influential. The self-efficacy of a person has a direct impact on how the brain expects us to execute a situation. A setback may not only reduce the time put into a project but also has a negative effect on us as a person in regards to deflating our thought of ourselves. It may decrease our certainty and install doubt in what we are doing. Having a progressive work life motivates people to accept tasks that seem difficult because they trust that they can accomplish it. It brings a sense of empowerment over the worker to where he or she is determined enough to know they are able to do anything they set forth to do. Negative recalls are twice as effective as positive resolutions. As much as an employee may have positive outlooks on what he or she is doing, a minor negative reaction can cause the entire project to be jeopardized. The progress principle requires a prerequisite of meaningful work to be present. This triggers self accomplishment and therefore makes the inner work life desirable and positively meaningful in itself. In 2003, a survey was conducted that resulted in showing how the importance of producing meaningful work over exceeded the need of other job features such as pay compensation or promotions. There are four ways to negate meaning within your work. Managers should be able to explain how each job is contributing to the overall goal. They should also avoid any negative negation in regards to the value of work. The first way to negate meaningful work is to have your ideas dismissed by managers or leaders without analyzation or recognition of effort. The second focuses on losing one’s ownership status in the work you are pursuing. Another way that dampens the meaning of the work being done involves making the employee doubt the work being done will be seen outside of their work station. Prioritizing the work being done by each employee and disregarding the efforts made can decrease the work’s meaning. And the fourth and final way to negate meaningful work is by designating people that feel they are overqualified for the job task given. It is like knowing what you are capable of and given the grunt work that anyone can complete. Employees need to feel like they are contributing at a level that best suits them.

The Catalyst Factor – The Power of Project Support: Chapter 6

Being involved in the catalyst factor of business, you must involve the ability to clearly set the goals needed to be met within the company. When the catalyst is missing, this is referred to an inhibitor. These two factors can have an immediate impact on the inner work life of the individual before affecting the actual work being done. There are seven main catalysts used in the workplace – setting clear goals for the employees to follow, allowing teams to have autonomy to be creative in their work, providing the necessary resources needed to productively meet expectations, giving workers the appropriate amount of timeline to accomplish the goal, giving help with the work in various forms including providing needed information, brainstorming, or teaming up when someone is struggling with coming up with a solution, having the ability to learn from both problems faced and success within the workplace, and, finally, allowing ideas to flow throughout the organization. Organizational climate influence the events in the company as well. There needs to be a clear consideration for people and the ideas they present, coordination between individuals and the groups they are supporting, and communicating within the groups with respect, honest, and feeling free to express any issue whether positive or negative. To have a successful team, the team leader must go through certain steps to maintain that success. A leader must constantly gather information on the project and its progress, involve the team in important decisions being made on the project they are producing, develop other relationships outside of group to help build support, and fight for the project at hand. What they must not do is fail to inform their workers, micromanage the team, fail to bring motivation and inspiration to the group, avoid the problems within the process, and fail to clearly define the goals for the project.

The Nourishment Factor – The Power of Interpersonal Support: Chapter 7

Working for certain companies give employees distress when needing to ask for simple requests such as days off. Feeling like your work will only get more behind and overwhelming due to you not being there plus disappointing your boss or manager sometimes keeps people from asking for certain things. Having a sense of appreciation for the work dedicated to the company will allow employees to build that endurance and motivation to work hard throughout their career. Going back to Helen, after working hard on a project she sent in a request for a day off. What she received in return is a note from her manager that gave her more self confidence and self assurance. It thanked Helen for all of her hard work and dedication and reminded her that due to all of her efforts she was being given a free day off as a reward. This kind of give back is an example of the nourishment factor. Taking advantage of nourishing one’s employees will help build their motivation and positive emotions towards the work they are doing. One can impact the inner work life of the employee by showing and treating them with respect and recognition, showing encouragement with enthusiasm of the work being seen, giving emotional support when employees are having a tough time, and giving the employees an affiliation reflecting trust, appreciation, and a connection at work with others and with the tasks at hand. The organizational climate in return becomes a positive one that all employees are comfortable and confident in. Toxins, however, imitate a negative organizational climate and can tear down the positive returns previously mentioned. Such toxins can be grouped as being disrespectful to your employees, discouraging them and tearing them down, neglecting to connect with them on an emotional and personal level, and antagonizing them and making them feel inferior compared to others. Managers must respect their workers and recognize their efforts instead of ignoring them and dismissing their feelings.

At the End of the Day: Chapter 8

Through consistent and positive actions, managers can achieve high praise when managing their employees. Setting up a positive climate for employees and taking charge of one task at a time decreases the possibility of overworking, overwhelming, and distressing one’s employees. Addressing problems openly and sharing feedback with employees will allow the team to feel in the loop and communicate better. Observing the progress of your team and being on top of what is going on also helps the manager keep his or her team informed as to the progress being made and what needs improvement. Having support can be a very key acquirement in order to succeed in the task given and improve productivity throughout an organization. Keeping in mind to check in with your workers and not micromanage them gives a healthier climate to the workers and the manager as a whole. The daily progress checklist highlights all of the questioning areas to be concentrated on. On one end you have the team’s progress which includes questions that indicate the catalysts and nourishments that sprouted from that day. On the other end, the setbacks are given along with any inhibitors that may have occurred that day. Once all of these aspects are analyzed and answered, the inner work life is segmented and the action plan for the following day is measured out. These questions must be answered with high focus and inclusiveness. Remember to include the small attributes as well as the larger events present that day. Progress fluctuates on a day by day basis. Having the organizational climate that supports each individual through initiatives influences the inner work life of all workers. All leaders, even ones who lead their own ventures, are responsible for the people around them and how their inner work life is reflected.

Tending You Own Inner Work Life: Chapter 9

It is important to reflect on your day and analyze both the positives and negatives of that day. The positives will help boost personal morale and negatives will give you an insight on what you may be able to change for the better. Keeping a daily review of events needs to reflect entirely on your day which may be done by answering questions such as what progress was made, which events stood out today, listing the day’s catalysts and setbacks, and reflecting on how you as an individual affected your coworkers and the people around you along with their inner work life. Although keeping these journals and examining your whole day every day may feel like a waste of time or a chore, many people including the ones observed in this study fount that these journal entries were significantly helpful and helped boost their motivation and inspired them to figure out exactly what they wanted out of their work life and how to get to that point. Management should be based on improving the lives of others and, therefore, improving the company’s outlook and productivity. Companies need to be sure to offer high-quality products and serve their customers to the best of their abilities. They should also encourage management to try to enrich the lives of the workers as to enable success that adds value to everyone involved.

The Video Lounge

This is an interview Harvard did with one of the authors of the book, Teresa Amabile. In this interview she dissects what the progress principle is and how people define and relate to it. Teresa then goes to describe how inner work life drives how we are productive in the workplace. Using progress and small wins, we can acquire better performance and better self-confidence in our own work.

Personal Insights

Why I think:

• With business conditions today, what the author wrote is – or is no longer true – because: what the authors reflected are direct results of how companies today are ran and how people react to different situations. I feel that this is still very true and relevant and will always be a part of the workplace. Dealing with one’s inner emotions along with how you value your work and the company you work for can impact how you perform on many levels.

• If I were the author of the book, I would have done these three things differently:

1.    The book itself went into detail about the reflected terms. However, the terms used were repeated continuously within the chapters. If felt a bit repetitive and unnecessary to be in there as much as it was. It is one thing to explain something to make sure people understand and another to bombard them with it more than is required. I would have gone through the terms and set examples to clarify but then moved on.

2.    There were many examples given to show how the progress principle worked within the observation study. It would have been more helpful to fully visualize the situations if the background of the worker was more embellished. Knowing more of where this worker comes from and how they work on a regular basis may have given the reader more insight on where they were coming from.

3.    The book was well developed but the way the chapters were diagnosed at times did not make sense. It would mention a topic and then move on to another. After a while, they would jump back to the previously mentioned topic and then go into detail about it.

• Reading this book made me think differently about the topic in these ways:

1.    Before this report, I had not heard of the progress principle. I had never thought that there would be a way to improve one’s motivation, positive emotion, and perception of a company or the work being done with the help of steps such as the ones described within the book. If opened my eyes to more ways I can reflect on not only myself but my work and give value to what I do as a worker and personally.

2.    Reading this book helped me visualize situations that I will become involved in when getting into the corporate world and working for a company. It showed me ways I can strengthen my motivation and drive by counting the small wins within my projects and not overlooking the little details.

3.    My overall outlook on what goes on within the company that I will be involved in has changed due to this book. When looking for a career after graduation, I will keep in mind to look for a job that will challenge me, shows interest, and helps people positively to where I will continue to strive for success within it. My approach to circumstances will also be modified due to this book. Many of its realizations have been reflected by me in my job presently and now I know what motivates me personally to do my best. I can’t always depend on getting that positive feedback from others but also need to indicate such emotions myself.

• I’ll apply what I’ve learned in this book in my career by:

1.    I will use the knowledge of the progress principle to understand that every action taken will be judged and analyzed and the best I can do is maintain my presence and constantly find ways to either boost myself after doing good or improve my motivation and drive to better my productivity.

2.    My focus on my newly learned aspect of my inner work life will be considered. After realizing that the inner workings of my mind and emotions directly influence my work and productivity, those key factors will be analyzed more so to stay satisfied and confirm self-worth within myself.

3.    I have also realized that my actions will impact the actions and emotions of others whether I intentionally induce this feeling or not. Being more aware of my surroundings and the people I am working with, I will try to make sure that my ideas and actions will work to support my team and not cause people to have a negative impact or loss because of me.

• Here is a sampling of what others have said about the book and its author:

“As leaders, we need to be sensitive and accountable for the impact we have on the quality of our people’s work life. The best leaders create a path for people to be successful and motivated by their work. This book provides a road map for what great leaders do intuitively.”
-Anne Mulcahy, former Chairman and CEO, Xerox Corporation
“The Progress Principle helps define and clarify how managers can improve the creativity and productivity of their employees and work teams. Amabile and Kramer get at the heart of how important the ‘inner work life’ is to any person in any job. The principles and concepts presented in this book are backed by extensive real world research, which provides unique insights that will enhance the leadership skills of every manager.”
-Richard Seaman, Chairman and CEO, Seaman Corporation
“The research is exhaustive, the insights are compelling, but the implications aren’t quite so clear.  Amabile and Kramer have done an excellent job peeling back a layer of management obfuscation to remind us that people need to be engaged in what they do, and as work becomes a bigger part of everyone’s life, inner work life must be effectively understood and managed.  This means that every corporation must consider its corporate culture and make adjustments to ensure the appropriate catalysts and nourishments are in place.  Executives and managers must examine their management style to understand how they impact progress and inner work life. ”

-Jeffrey Phillips, Technology Marketer, Raleigh, North Carolina, United States

“The single most important thing business leaders can do to improve morale is help employees feel they are making progress at work. [...]Chapters Five, Six, and Seven lay out steps for improving employees’ inner work lives, including expeditiously supplying a team with extra help and emphasizing that its work is important to the organization.”

-Leigh Buchanan, Editor at large for Inc. Magazine, former editor at Harvard Business Review, and founding editor of WebMaster magazine

Bibliography

Amabile, T. (2011). Teresa amabile: Creativity, productivity, and the psychology of everyday work life. Retrieved from http://www.progressprinciple.com/

Amabile, T., & Kramer, S. (2011). The progress principle: Using small wins to ignite joy, engagement, and creativity at work. United States of America: Library of Congress Cataloging-in-Publication Data.

Buchanan, L. (2011, September). [Web log message]. Retrieved from http://www.inc.com/magazine/201109/the-progress-principle-book-review.html

HarvardBusiness. (Composer). (2011). The power of progress. [Web Video]. Retrieved from http://www.youtube.com/watch?v=BYC-t7Xb2pc

Phillips, J. (2011, September 07). [Web log message]. Retrieved from http://innovateonpurpose.blogspot.com/2011/09/book-review-progress-principle.html

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Contact Info: To contact the author of this article, “A Management in a Minute Book Overview of The Progress Principle by Teresa Amabile and Steven Kramer for Practicing and Aspiring Managers” please email Kirsten.Johns@selu.edu or KikiJ316@gmail.com.  

About the Publisher  

David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of his student’s publications regarding:

• management concepts (http://toptenmanagement.blogspot.com/)
• book reviews (http://wyld-about-books.blogspot.com/) and
• international foods  (http://wyldaboutinternationalfoods.blogspot.com/)                                             

Tourism may be a buzz word within the economies of each developed and developing nations. It chips in to the expansion and development of the native lands where it’s being practiced. Its vitality is observed from the stastical knowledge of 2011: Direct contribution to GDP and employment generation was US $2 trillion and ninety eight million respectively across the planet. whereas talking concerning the indirect contribution within the same year it accounted for US $6.3 trillion GDP and 255 million jobs globally. This depicts the festering importance of tourism for any nation however the very fact is that a lot of components of the planet are still ignorant concerning the multifariousness of the sphere of tourism and that they take into account it solely as a leisure activity. truly Tourism is like an umbrella that encompasses the subsequent flourishing fields:

Discipline: Tourism may be a vast field of study that encapsulates the ideas of anthropology, sociology, history, psychology, archaeology, ethnography, geography , accounting, economics, marketing, leisure, management and varied alternative disciplines. it’s the systematic study of the strategies employed in tourism trade. It teaches a way to upset folks , their psyche and alternative necessary events going down within the domain of tourism. It keeps folks updated relating to the newest trends going down within the travel and tourism and provides them with the knack to upset cross cultural issues reducing the planet into one international village. It enhances our data relating to the prevailing and virgin tourist destinations. This know-how will equip the analysis students to come back up with novel topics, notions, ideas and explore them with the tools of this discipline which might ultimately cause new studies and raise the prevailing literature essential for thriving the tourism trade.Many personal and public tourism organizations have created a replacement job position for tourism analysis students where dextrous and competent researchers will build their mark and add colors to travel. Rural tourism in Italy

Entrepreneurship: Tourism trade is that the solely trade that includes a shoe for each foot. it’s immense scope for those that believe in ‘ Being your own boss’(YOB) approach. it’s commonly observed that those that are inventive, innovative, accountable and have the flexibility to influence others have an inherent dislike to figure below or for others. however attributable to lack of resources they’re guaranteed to work for the success of people. Tourism is that the field that one will decide on san entrepreneurial career with full investment of his caliber and fewer financial inputs. It permits one to figure and build profits even with virtual offices. Initially, the sole machine that a contemporary day tour entrepreneur needs may be a pc and an area of few feets. therefore so as to be an efficient entrepreneur in tourism one wants the competency to sense the chance and exploit it with the correct angle.

JOB: Tourism additionally provides the duty ‘Just obey your boss’ possibility for those that like a straightforward life, have poor risk taking capability, lack initiative and like to be directed. within the gift era, several national and multinational corporations like KUONI, SITA, TUI, COX & KINGS, SOTC etc are dealing in tourism and that they have vast job opportunities for the tour professionals. Most of the duty vacancies are solicited and may be simply noticed working portals. Handsome salaries , job security and smart prospects of growth are being offered as per the flexibility of the people. 

FOREIGN EARNING: Tourism has the potential to earn huge foreign currency and raise the strength of our economy. In 2011 ,India witnessed 6290319 foreign tourist arrivals and earned 77591 crores of foreign exchange that is self-convincing relating to the richness of tourism.

Thus, we will conclude that tourism may be a multi -dimensional and a multi- sectoral activity which might go an extended means in eradicating unemployment and earning huge profits. For this the requirement is to comprehend the importance of tourism and introduce it as a discipline and a field of study each at {the school|the varsity|the faculty} and college level. varied diploma and degree courses will prove handy in spreading the attention relating to the blossoming avenues of the tourism.

The test audiences for the show in San Fernando Valley, California seemed both excited and anxious to see Charlie Sheen back in action as the unruly therapist. For the biggest part the people who had the opportunity to attend the test screening of the half hour comedy rated it very favorable. All in all the testing groups indicated that even with his untimely falling out from CBS, they still felt that Sheen has what it takes to make this comeback and make the show another success.

Other members of the cast include hard hitting comedy stars, Selma Blair, Noureen Dewulf, Michael Arden,Daniela Bobadilla, and Shawnee Smith. The pilot also promotes the comeback of Brett Butler playing the part of a bartender. The show certainly seems to have the cast and premise to become a very long running sitcom, as we’ve become familiar with from Charlie Sheen. Anger Management will air Thursday evening beginning June 28, 2012 starting with the order of 10 episodes with another possible 90 episodes based on meeting a certain rating benchmark. Sheen was said to have told reporters that though he had no anger management issues of his own the show in itself is a great concept.

D.S. Duby

Be sure to check out other work by this writer at http://socyberty.com/work/contractor-or-con-artist-home-repair-and-new-construction-projects/

Cover of My Life and Work

Executive Summary

Henry Ford was a man who changed our world to what it is today by his determination and positive outlook on his inventions. He was born to be successful with his drive to be nothing less but extraordinary. His book teaches us the importance of overcoming fear and to always have good faith in your work and to not be discouraged in what you do just because at that time there is no demand for your product, because there never is for new developments. You have to be self reliant and to not hold back your ideas.

Portrait of Henry Ford (ca. 1919) (Photo credit: Wikipedia)

At a young age he took a great interest in mechanics. Being inspired to do well in mechanics first begun when he laid eyes upon a road engine which ran by steam that farmers used to run equipment from farm to farm. Fifteen year old Henry could fix just about any watch, and seriously considered going into that industry. He just could not get the idea of the steam engine out of his mind. The thought of having a horseless carriage intrigued Henry. While his father did not approve of this idea, Henry began his first experiment of attempting to build a horseless carriage. Lacking the necessary funds needed to support his experiment, Henry went to work for a machinist as an apprentice. Excelling well as a machinist was his confirmation that he could actually accomplish this horseless carriage for the benefit of the community. Working for the Edison Company at the time, Henry attended a meeting in which he briefly met and spoke to Edison himself and described his plan to create a gas powered vehicle. Edison an electric man did not discourage him, but encouraged him to go with his plan and stick to it; for he was bound to be successful.

A photograph of Henry Ford, Thomas Alva Edison, and Harvey Samuel Firestone- the fathers of modernity. (Photo credit: Wikipedia)

    After being offered a higher position in the company with the exception that he give up his obsession; Henry gave up his job and joined the automobile industry where he joined a group of investors later formed Detroit Automobile Company. However, these investors were not quite as passionate about the quality and success of this, but more so on the money they would earn from it. Tired of listening to the orders of others, he set a goal that he was no longer going to be an inventor under any management but his own. Four years later, the Ford Motor Company was established and Henry was the head man of the organization.
    The new company started off slow, but quickly moved its way up the ranks. Henry’s goal was to make the best quality he could design at a price all could afford. It took his company various styles and models before he was satisfied with his product. The model T was his most popular vehicle, particularly after he announced that this model was the only model that he was going to offer and only in black. After talk that his crazy move was going to land him without sales, just the opposite occurred. Soon after Henry’s demand was growing rapidly and needed to meet the consumer wants quicker. The assembly line was introduced, and was a huge success. As business grew from the assembly line, so did his worker wages. He felt the better a man was paid for their job, the harder they were willing to work for that pay. Service was their number one objective, work being second. The trust he built up with customers based off of his service was precious to him, and he was very good at achieve this.

From The Truth About Henry Ford by Sarah T. Bushnell: Mr. and Mrs. Ford in his first car, which he sold but afterwards bought back. It is now his most prized possession. Notice the old-fashioned bicycle wheels, and the bell on dash. Note:This appears to be the Ford Quadricycle (Photo credit: Wikipedia)

     Business to Henry was not anything he felt like he could not achieve. He stresses the importance of following through with creative ideas and to not give up. Along his road to success he faced many challenges that without his determination and enthusiasm about his work, he would have never overcome. Focusing on work and the quality and service instead of the money aspect, there will be no need to worry because your product will speak for itself and the revenue will come naturally.

The Ten Things Managers Need to Know from My Life and Work

   
1.    Find what you are good at. Henry learned at a young age that he was good at mechanics. Being able to work on watches at the age of fifteen was just a step towards realizing his max potential. Moving up from mechanics to machinist, Henry revealed not only was he good at mechanics but he was even better at working on machines.

2.    Determination is everything. Henry Ford’s determination and his passion towards mechanics and machines was his first step towards his success. Not being discouraged by his surroundings, he was able to achieve his goal of being a successful business man. Without the determination of succeeding your goals you would not be motivated enough to follow through those plans, and would just be wasting your time.

3.    Get inspired. Originally being inspired by a steam engine, the thought of designing a gas powered horseless carriage interested him as many people at the time felt that electric was the future, Henry continued to tinker with his experiments. Actually meeting with Thomas Edison, Henry explained his thoughts of designing his gas powered machine. Edison was impressed by his thoughts and encouraged him to not let it go to waste, because if he continued down this road he was bound to find success. This coming from the man in the electric industry inspired Henry that he not only had a good idea but someone that inspired him pushed him past all the odds against him and made him even more passionate towards reaching that ultimate goal.

4.    Failure is not an option. If at first you don’t succeed, get back up and try again. With many attempts in creating a gas powered horseless carriage, Henry never let his damper his idea. Learning from your mistakes and having an open mind towards new ideas will help you evolve your product.

5.    Customer Service is essential. Henry would say that service comes first, and then work. He felt that the business with a customer did not end with a sale of his vehicle. Customers deserved the best quality and service available for their purchase. He would make sure that they were satisfied with their purchase and could rely on his work to be of the best quality so they should never have to worry about any troubles that could occur. This was his best feature, and because of it he became well known from it.

6.    Work efficiently. Working in any business you should have established goals and plan your steps to accomplish those goals as efficiently as possible. Henry recognized his goals as being the best quality and affordability he can make with the best service provided. In doing so, the assembly line was his most efficient way of work. He was able to assemble more cars a day using an assembly line to meet to demand for his product at a lower cost than competitors.

7.     Fair wages and work. From his assembly line production, Henry needed more workers to work at a station doing the same thing for hours. This thought made Henry think how it would drive him mad doing the same thing repetitively. Thus the fair wages came into effect. Henry would pay his workers, of all kinds, a high pay of five dollars to work in his company. This was a decision made off of his thought that if workers get paid well, it will give them incentive to do well.

8.     Manufacturing at the lowest cost. As one of Henry’s goals, this was important for a starting company. The way of business is not by producing at a low cost and selling high. Being able to put a new product out on the market, consumers will be skeptical to buy it if it is priced too high. He succeeded at making the best quality vehicle at the lowest possible cost and selling to the public as just that, a low cost. His objective was to give more to the community than they had to give up. As a result, this made his business increase because people with decent paying jobs were able to afford them.

9.    Money is not everything. People become so consumed in the quick payoff that they quickly forget what their initial intention was. Money is not useful unless it is benefiting the forward production of your business. The more you put your heart into a product to make it the best it can be, you should not have to worry about the ending revenue, and your product will speak for itself. Money comes naturally as a result of hard work and good service, and nothing less.

10.    What we may expect. Success comes from hard yet intelligent work. By overcoming fears of failure and the future, you can learn from the economy that evolves everyday and use that as a tool for improvement.  Not letting the money get in your way of the clear established goals, one can expect to end on top of the industry. It is not an easy journey, but if you truly desire the ultimate goal and are willing to make the sacrifices in order to attain those objectives, it will be worth it in the end.

Full Summary of My Life and Work

Henry Ford’s “My Life and Work” was a biography of his life. This book gives us insight on the brilliant minded Henry Ford. His dedication to his work, and belief in himself, changed the world for the better. As his mother says, he was a born mechanic, he truly was. Henry found himself as a young man tinkering with watches discovering that he was quite good at fixing them up. At the age 15 he could do almost anything in watch repairing and even considered going into the watch manufacturing business. However, his father did not approve of his mechanic doings; he felt that Henry should be a farmer instead. Henry did not care, and continued to work towards his passion of mechanics. At the age 17, he left school to become an apprentice in a machine shop and worked nights at a jewelry shop repairing damaged watches. At this time the standard railroad time was being arranged, formerly being on sun time, just as in present day daylight savings. Henry succeeded in designing a watch that kept both times, which was a big hit in his neighborhood.

In 1879, Henry managed to get a chance to run a Nichols-Shepard machine with his apprenticeship, and when it ended he began working with a local representative of the Westinghouse Company of Schenectady as an expert in setting up and repairing their road engines. In working with this Ford experienced the pros and cons of this engine. He could not help himself to wonder about the weight and cost of these engines. He felt that they were far too expensive to be owned by other than a farmer with a great deal of land. Because they were sometimes used as tractors to pull heavy loads, or if the farmer was in the threshing business he would put his threshing machines on the engine and transported it from farm to farm. This brought the thought of making a form of a light steam car that would take the places of horses, as a tractor to do the excessive hard labor of farm work such as plowing.

This idea of a light steam car kept rolling around in his mind. The thought of a horseless carriage was a common idea, which at first did not appeal so much to him due to the poor road conditions. However, being the well rounded mechanist he was, it did not take him long to build his first steam wagon, or tractor. In building this, the idea of it possibly being used on road would be of use, because horses were just not worth their keep with all the attending to, feeding and expenses. Thus began his road to manufacturing cars. On this path of manufacturing he discovered that more people were becoming more and more interested in this invention of road cars and less interested on inventions for farm work. The first car he built was a steam car, it had a kerosene-heated boiler and had plenty of power, but the boiler was dangerous. To make it safe it required an excess of weight. Two years Henry worked on his experiment of developing a safer road car, however he did not give up the idea of a horseless carriage.

As Henry Ford was not discouraged at his efforts to make a road car was not going anywhere. He began looking into a new direction. He recalls reading in an English magazine about a “silent gas engine”. It ran on illuminating gas. As far as weight was concerned, it was nothing like the steam engine, and the use of gas seemed to interest Henry. This concept was by no means new to the world, but it was the first time a serious effort was made to put them on the market. Henry followed this concept to about 1885-1886 when the steam engine was no longer and interest to power for the carriage. In 1887 Henry Ford built a new engine first hand on the Otto four-cycle model. Which meant it was an engine with four cycles, the piston traverse the cylinder four times to get one power impulse. The model worked well, while it did not make much power, it was slightly lighter in proportion compared to other engines being offered. Later giving his engine to a man who wanted it. This was the beginning of the combustion engines.

After his attempts to create his road car, Henry decided it was time for him to return to the farm, not because he wished to fulfill his father’s wishes of becoming a farmer, but more so to experiment in the shop he built on the property. His father again disapproving of his mechanist ways offered him a bribe. A bribe that entailed Henry to forty acres of land provided that he give up being a machinist. He agreed. Henry at the time began cutting timber on this land, which gave him a chance to marry. The timber he cut was used to build his house which was added to his workshop. When he was not cutting, he was spending his time in the shop working on the gas engines learning everything he could from them. It was then in 1890 that he began building a double-cylinder engine. After time spent working on his newest idea, it became apparent that it would not work out due to the weight.

Another failed attempt down the drain, Henry was optimistic that he would one day get it right. Henry was then offered a job with the Detroit Electric Company as an engineer and machinist at forty-five dollars a month. Quickly, he accepted the job. Wanting to get away from the farm live anyways they moved to Detroit where he would make more money. After settling in, and building a new shed for him to work in, he began tinkering with a new motor. In 1892, he completed his first motor car. The appearance of the vehicle resembled a buggy, and could hold two people. It functioned by two speeds, low speed (ten miles per hour), and high speed (twenty miles per hour); and contained no reverse. In order to start the vehicle it was necessary to turn the motor over by hand; and stopped by releasing the clutch and pressing a brake. The machine all together weighed five hundred pounds with a gas tank holding of three gallons located under the seats. In spring of 1893, it ran to his satisfaction becoming the first and for a long time the only automobile in Detroit.

Henry Ford became a huge hit with his “gasoline buggy”. He soon found that he was encountering problems of nuisance. This brought light to how many people were interested in it. When he would go to town, he would have to start bringing a chain with him to chain his buggy to a pole, because people would try and mess with his buggy and attempt to run it. Henry ran that machine about one thousand miles in one year, and then sold it to a man named Charles Ainsley of Detroit for about two hundred dollars. This was his first sale, and he wanted to start another. It was not Henry’s idea of making cars, he was into production, and it did not hurt that he could use the money.

In 1896, the second car began being produced. Ford produced three cars from his house that ran for years in Detroit; also buying back his very first car from Mr. Ainsley for a hundred dollars. During this time he kept moving up in rank at the electricity company. The president of the company continued to pursue Henry into making only electric engines because it was the coming thing. Years later, the Detroit Edison Company offered him the general superintendence position, but only on one condition- He would have to give up the gas powered engine theory and devote himself to something they saw “useful”. He chose to give up the job on August 15, 1899 and went into the automobile business; for he already knew his car was bound to be a success.

In March 1902, he resigned from the Detroit Automobile Company determined to never be under other’s orders again; in which the company later on became Cadillac. From there he rented a shop to continue his experiments. In his little shop he worked on developing a four-cylinder motor. With his little money he tried to find out what business really was. From the time he worked at the Detroit Automobile Company to his present company, Henry had built about twenty-five cars. Henry met Alexander Winton of Cleveland, the founder of the Winton car, was at the time track champion and willing to meet all comers. Henry saw this as an opportunity and met with Winton for a race. He won. This became his first form of advertisement for his four-cylinder car, because at the time, all people raved about was its speed. This gave him the attention he needed to finance his service. This seemed to be the reversing the natural process which money comes as a result of work and not before.  His idea was that if a man did his work well, the price he would get from his product and finances would care for themselves, and that a business should start small and work its way up with its earnings. If one does not make his way up in earnings, it signals that the business owner is wasting their time, and does not belong in that business.

“A good business was not one that did good work and earned a fair profit. A good business was one that would give the opportunity for the floating of a large amount of stocks and bonds at high prices” (Ford & Crowther, 1922). Ford felt that the bonds were the most important thing and the work came second.  At this time in Ford’s life he began to plan that his business should start off with the largest possible capitalization and then sell all the stock and bonds. Whatever was left over from paying expenses went towards the business. He found that business that used financing were used was no place he wanted his company to be. He expressed that he saw what was going on all around him with other businesses and stated that it was a money making game and was certainly no place for a man such as himself to accomplish anything, because the true foundation to business  is service.

With Henry’s business mission being complete service, he felt that just because the car was sold, the manufacture was not through with its customer. The price and quality of the car would make the market large, he went further to making sure that his customer’s were always satisfied and served as their sole duty to make sure the car ran and was continuously put into the shape it needed to be. With this type of customer service, Ford became well recognized as an outstanding service provider, along with price and quality of his products. The man who has the largest capacity for work is bound to succeed.  During this year he came to the conclusions that:

“Finance is given a place ahead of work and therefore tends to kill the work and destroy the fundamental of service.
That thinking first of money instead of work brings on fear of failure and this fear blocks every avenue of business – it makes a man afraid of competition, of changing his methods, or of doing anything which might change his condition.
That the way is clear for anyone who thinks first of service- of doing the work in the best possible way” (Ford & Crowther, 1922).

In 1903, Henry Ford teamed up with Tom Cooper, in which they built cars designed for speed. Creating one of the fast cars, at that time, the “999” was definitely designed for speed. Neither Ford nor Cooper lined up to test drive this car, instead Cooper suggested Barney Oldfield, a professional bicycle rider to test it instead. After teaching Oldfield how to drive, he took off. The “999” did exactly what it was supposed to; it showed the world that he indeed could, build the fastest car. A week after the test race, Henry Ford formed the Ford Motor Company. Thus under no other order Ford became the vice-president, designer, master mechanic, superintendent and general manager. He started off with owning twenty-five and a half percent, about twenty-eight thousand dollars. In 1906, Henry began buying stock to raise his holdings to fifty-one percent, which would pay out about seventy-five million dollars.

    In their first year of Ford Motor Company, they built “Model A” cars selling for about eight hundred fifty dollars. The business was going smoothly and was gaining a reputation for “standing up”, tough yet simple. In the second year they developed three models: Model B, Model C, and Model F. Ranging in prices they sold fewer cars than the first year, sales were at 1,695 cars. Henry decided to begin advertising the Model B more, because it was the four-cylinder car for general road use and fixed up the twin of “999” to be advertised however no stunt will sell for any length of time. Ford changed his policy the next year making his cheapest car six hundred dollars and the most expensive being seven hundred fifty dollars, which demonstrated what price meant to them. That change increased his sales by five times the amount from the previous year. Cars were beginning to be sold globally and business began booming.

    In 1908 Ford had sold over ten thousand cars, and yet there was still a rave about expanding, new styles and models. Already creating eight different models, Ford announces in 1909 without warning that in the future, he was only creating one model, the Model T. He stated,” Any customer can have a car painted any color that he wants so long as it is black” (Ford & Crowther, 1922). He stated he would build a vehicle large enough for a family, but small enough for just an individual to tend to. Using only the best materials and lowest price, no man making a good salary will be unable to own one. The people did not like his new plan and felt that his business was sure to fail within six months of his announcement. From this year to the year 1911, their business still continued to skyrocket.

Around the beginning of 1913, Henry Ford began an assembly line in his company. A Ford car contained five thousand parts, and the assembly line made this process a much quicker production and helped cut down the time spent on assembling one car. However, Henry feared that the repetitive work would drive a man wild; having to do the same thing continuously terrified him. Ford had a theory about wages he paid his workers. He felt that when you pay men at a high rate, they do good work. This was because they will work hard to continue to work for that pay and would not have to worry about not being able to provide for their family. He paid his workers five dollars a day for eight hours work, which was a large pay at that period. Ford’s workers were of all different kinds, he never turned a man down from work because of education or a disability they may have. He felt that the workers that were not smart worked harder than the ones that were quite intelligent. In his mind, workers that were not knowledgeable about machines were hard labor workers because they had to learn their job from him and his ways of work, where as workers who were educated about machines would try and change the way of things or find things wrong in his production. Men who had disabilities such as missing appendages, blind, or deaf were not turned away either, they were willing to work to support their families and Henry was not going to stop them from achieving just that. This work ethic and wage motive was a huge desire for all of the workers in his company, and out. By the year 1918, America was getting filled with cars, half of them being Model Ts. His production of Model Ts, the use of a moving assembly, and having low cost made his company the largest automobile manufacturer in the world.

In 1917, World War I was still occurring in America. Ford proclaimed he did not understand why we would go to war. He learned that people were anxious for a peace settlement across the nations and decided to finance a mission to Stockholm later called the “Peace Ship”. However his attempt for peace failed, Henry felt he got a valuable experience out of the journey. From that moment until late 1918 his company was dedicated to the United States government making cars, parts, ambulances, delivery trucks, listening devices, steel helmets, boats, armor, whatever they needed. Ford’s production principles were put to a new product, a three hundred fifty foot wide, one hundred feet tall and a third mile long boat. After this boat was designed and ran the Armistice was put in effect, and there was no longer war, America was in peace again.

In the final chapter of the book, Ford states, “all that I have done- is to endeavour to evidence by works that service comes before profit and that the sort of business which makes the world better for its presence is a noble profession” (Ford & Crowther, 1922). He describes to the readers not to give up, for his theories and methods were at one time taken for granted; but that was because they were not understood. Money is useful only as it serves the company to better itself. It should not take away from the community more than the benefits it gives. Poverty is not a something one can avoid by doing nothing; it is diminished by hard yet intelligent work. “Everything is possible… faith is the substance of things hoped for, the evidence of things not seen” (Ford & Crowther, 1922)

The Video Lounge

    This video displays Henry Ford’s models of gas powered horseless carriages, the cars. As you watch this video you get to see a glimpse of Henry Ford’s life, the Ford Motor Company. As each vehicle evolves over the years, you see the differences he made to each car as they varied in what they were capable of. Also it demonstrates the number models he went through in developing his greatest one, the Model T.

Personal Insights

Why I think:

• The author is one of the most brilliant people around…or is full of $%&#, because:

I think the author was one of the most brilliant people around, at that time period, because he was so intelligent, and thought things through about how he needed to get where he needed to be. He was never discouraged by failed attempts which demonstrate his optimism towards life. Nothing was out of his reach as long as he set his mind to it. No one could stop him or bring him down, not family, not the economy or market, and not himself. You just cannot help but get consumed in his life story and achievements; it is quite inspiring from how he came about.

• If I were the author of the book, I would have done these three things differently:

1.    It is a wonderful book and story; however I would have done things a little different by sticking to the timeline of the story. He jumped around the book with times and dates of things he did or accomplished. It was a little difficult at first to follow along with the chronology of events.

2.    I was so intrigued at his attempt in his “Peace ship”. It was disappointing to see that there was no more to the story than he just set sail because of what he had learned about the nations crave for peace. He mentioned that his sail was a failure, but he did not regret it because of what he learned on his journey. I would have loved to read more about his adventure on the ship and what exactly he learned from it.

3.    I wish he would have elaborated more about his wife and son. We learned that his son eventually took over his company, but not how he did at running the company. With little talk of his wife and son, I wish to have read more about his family’s involvement and thoughts of his struggle to success.

• Reading this book made me think differently about the topic in these ways:

1.    How often things are taken for granted. Everyday people, objects, ideas, and leisure items are taken for granted. Henry Ford told us in the book that at the beginning of his career he was taken for granted. His ideas were merely a joke when electricity was coming about. He states that he knew his plan was going to benefit all; he just needed the chance to create it and prove that they would indeed benefit from it. His ideas were merely misunderstood and that once they discovered the luxury of having his vehicle, they wanted to change it (i.e. such as styles, colors, and uses of his products), when in the beginning they never gave it time to come about.

2.    Value your workers. Your business is not only about your product. Your workers play a valuable role in your success. If Henry did not pay his workers well to give them incentive to do well, who is to say that they would not slack off or pay less attention to their jobs? This could have caused a major problem when assembling vehicles, and for Ford Motor. Not just that but your workers are those who make your products. Regardless if they are bad or good products, it still reflects your company. Take time to value your workers in the work they do, and in return your products will reflect that.

3.    Work efficiency. The best way to get something done is to do it fast and efficiently. Discovering new ways for things to be done at a faster pace without pulling you under financially is essential. For example, if I have to wash 10 loads of clothes on a time frame, it would be better for me to go to a laundry mat. That way instead of waiting 20 hours ( an hour to wash and dry) and running up my electric bill, I could spend twenty dollars (a dollar per load washing and drying) and use 10 machines at once and get my laundry done in as little as two hours. Every situation varies, but that is why it is important to discover the best work efficiency that suits your company.

• I’ll apply what I’ve learned in this book in my career by:

1.    I will not let anything get in my way of achieving my ultimate goal. Letting no one get in my way towards achieving my utmost best I can be, I will be at the top of my market and unstoppable. I am the decider of my future and I will not stop until I achieve my goals.

2.    Determination and hard work pay off in the end. You cannot sit around and do nothing and expect something. When it comes to business, you cannot slack with the evolving markets. Staying on top of my job requires the utmost awareness of what is going on around me and how my product can continuously have a competitive advantage over other rivals.

3.    Money is not everything. I will not be so consumed in money that I cannot do my job to it finest. When you put forth your best work and achieve the maximum efficiency of your work, the money will come naturally. It is not something that can be forced or received by doing nothing; it comes from good work and service.

• Here is a sampling of what others have said about the book and its author:

“What others have said about the book and its author?”
    “A fun, easy to read book by a man with common sense and tremendous insight. It is written during a “simpler” time when America was becoming an industrial powerhouse. Ford is a very intelligent and practical man, a man you wish you could have a conversation with. Two reasons I didn’t give this 5 stars; is because it becomes superfluous in describing day to day operations at the Ford factory. Also, I thought I would find more principles that could be applied to today. Overall, an enjoyable read!” (”Amazon,” 2012).
    “Anyone who has read “My Life and Work” will understand exactly what is wrong with our country today. There are three ways to create wealth–grow it, mine it, or make it–and activities like flipping houses or trading carbon credits do not qualify. Ford developed what is now known as the Toyota production system, and readers will see a very explicit description of just in time manufacturing (and its benefits) in “My Life and Work.” Ford also summarized effective labor relations in one sentence: “It ought to be the employer’s ambition, as leader, to pay better wages than any similar line of business, and it ought to be the workman’s ambition to make this possible.” (“Amazon,” 2012).
    These are just a few of the many people raving about Henry Ford’s life and how he has greatly impacted our world today with his determination then. We will forever be grateful for his ideas that he brought to life and evolved to what they are today. As the book may be dated, it still opens our eye to how far we have come from that time and the wonders he established for us today.

Bibliography

Amazon (2012). Retrieved from http://www.amazon.com/My-Life-Work-Autobiography-Henry/product-reviews/146352546X

Ford, H., & Crowther, S. (1922). My life and work. Garden City, NY: Doubleday, Page &

Company.

(2011). Henry ford: On mens desire for corporate advancement. Retrieved from http://frrl.wordpress.com/2011/09/13/Henry-ford-on-mens-desire-for-corporate-advancement/

Oak, M. (2011, August 26). Buzzle.com. Retrieved from http://www.buzzle.com/articles/Henry-ford-timeline.html

The life of Henry ford. (2003). Retrieved from http://www.hfmgv.org/exhibits/hf/default.asp

Yihan, L. (2011). Leadership With You. Retrieved from http://www.leadership-with-you.com/Henry-ford-leadership.html

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Contact Info

To contact the author of this article, “A Management in a Minute Book Overview of My Life and Work by Henry Ford for Practicing and Aspiring Managers” please email Jenna.Gindro@selu.edu.

About the Publisher  

David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of his student’s publications regarding:

• management concepts (http://toptenmanagement.blogspot.com/)
• book reviews (http://wyld-about-books.blogspot.com/) and
• international foods  (http://wyldaboutinternationalfoods.blogspot.com/)                                             

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Executive Summary

In school, we are taught all of the theories and methods that can make us successful. Taking these lessons and applying them in business situations is the tough part. Rarely do companies reach a multinational level of success. Starbucks is a true American story.
Howard Schultz was raised in Brooklyn and watched his father work hard, physically demanding jobs for almost nothing. When his father ended up in a full body cast without receiving anything as compensation, he knew he one day wanted to create a company his dad would be proud to work for.  Schultz paid his way through college and moved to Seattle to work for a small coffee company in marketing. This was one door that opened that led him to find his true passion in life.

Schultz left Starbucks to create his own coffee company Il Giornale. He soon became in the position to purchase his former company. After merging the two companies, Starbucks name was chosen and a story was born. In the beginning, Starbucks took off like a rocket. They were rapidly opening new stores across the country and even ventured overseas. People often joked that there was literally a Starbucks on every corner. This rapid growth would soon become hole in their sinking ship.

Starbucks Chairman Howard Schultz talks to the media at the Vancouver Waterfront Station location, celebrating 20 years of Starbucks in British Columbia. (Photo credit: Wikipedia)

In 2007, the economy took a turn for the worst.  American’s were soon realizing they couldn’t spend $4 on a latte everyday like they used too.  Now they were only going to Starbucks about once a week to indulge in a delicious coffee drink. The slowed traffic and rising costs of new stores was sending Starbucks stock further and further down.  Howard Schultz returned as Starbucks CEO hoping to reignite the company.

He knew he had to bring Starbucks back to the roots of the company. He knew that human connection and serving the best coffee was no longer their strong point. He made many decisions that took the media’s attention and created a lot of buzz. All the experts and critics didn’t often agree with his methods and voiced their opinions loudly. Schultz implemented new ideas and products that would slowly bring his company out of the trenches. Starbucks didn’t have to take any bailouts or file for bankruptcy to stay afloat.

Starbucks new ideas often fell flat, but some of them succeeded tremendously. Howard’s focus on core values led the team to make a lot of right decisions. Customers and employees believed in the company and its products, and that is one of the biggest assets a company can have. Starbucks did have to scale back operations for a while and look for better cost saving models they could adapt. In the end, these decisions have led to a bigger and better company. This fresh new look from the CEO and founders perspective shows people that although decisions may be tough, they have to be made.

Howard Schultz business approach is fresh and inspiring. He wants to lead the company to sustaining success but still run the business with a social conscience. Everything that Starbucks does to succeed shouldn’t hurt the environment, but instead improve it. His focus on the human connection is improving the lives of farmers, employees, and communities. He is encouraging people to start taking responsibility to improve their communities. I think businesses can learn a lot from his approach. It is very balanced and should be applauded.

The Ten Things Managers Need to Know from Onward

• Stick to Values

Forming a mission statement is one of the first things businesses create. It states the purpose of the company and the goals it wants to achieve. The mission statement should express the core values of the company. Future decisions should be made keeping those core values in mind, especially in hard economic times. Managers should make sure to keep the companies actions parallel to their goals and what the company was set out to originally do.

• Sustainability

Onward gave many examples that could have given Starbucks a quick and much needed boost in growth and earnings. Most of the time, Howard Schultz denied these quick fixes. He was focused on making decisions that would give Starbucks long term profitability. Managers should make decisions that will benefit the company in the long run. It can be very tempting to initiate a quick fix, but until the problem is solved at the root, nothing will be sustainable.

• Embrace Mistakes

No one person is perfect and no company always makes the right decisions. The best way to grow is to recognize the mistakes that have been made and embrace them. Managers need to find out the reasons ideas didn’t work and learn from it. I also think that customers will respect and easily forgive a company that admits their mistakes. As long as you try to improve, the loyalty of the customers will remain.

• Never Expect a Silver Bullet

When an economy is in a recession, small issues can snowball into major problems. Businesses will do almost anything to stay afloat like drastically reduce prices just to get a sale. But, there is no one idea or product that will magically fix these problems. It takes a series of decisions and products to lead a company to a better future. Hedging all your bets in one item is always a huge risk.

• Innovative Thinking From the Ground Up

I think one of the biggest issues with management is that they don’t listen to the employees. People who work in the factory and actually make the product can have the most innovative ideas. People who are in the trenches generally know what really works and what doesn’t. These workers can find solutions that managers may overlook and can lead to more efficient operations. I think managers should ask employees their opinions and learn what could possible make a difference in the process and working environment.

• Competitive Products

Competitive products don’t always have to be a huge negative thing. I think they can be a learning process. Businesses should ask crucial questions when they are faced with pressure from competitors. Why are they successful? What can we do to improve? Knowing the reason customers choose their product over yours can lead to a newer and better product.  You could also see problems that you didn’t know existed before the competition

• Never Underestimate Atmosphere

Starbucks was very successful at creating a “third place.” They created a place to go to besides work and home. Starbucks is a place to go study, meet with friends, and just surf the web. Starbucks mad it free to its customers to use the internet and even gives customers exclusive perks online. Starbucks is somewhere customers feel safe and relaxed. Customers can determine their own pace.  The atmosphere alone brings me to Starbucks and I think it is one of their biggest assets.

• Get Your Hands Dirty

There is only so much delegating a manager can do. If they want an idea to work, managers are going to have to get their own hands dirty. Employees and customers will take notice when managers really believe in the idea and company. Actually putting the idea into motion and having a good follow-through can start a domino effect. Employees will start following your lead and produce a better product.

• Go With Your Gut

Being in a management position can be very stressful. Knowing what decision to make is often the hardest thing to manage. I think the best think managers can do is to follow their gut. This doesn’t mean make a rash decision flying blind. Managers should do their research and listen to respected advice. But they should also trust their own instincts. They should weigh all the options carefully and decide the best decision for the company. There will be a line of critics and experts that go against your decision, but they don’t have the same goals as the company does.

• Continuously Search for Improvement

Once companies create that perfect product and become successful doesn’t mean the work is finished. Companies need to continuously try to improve the product or service. This could mean innovation or even creating more cost saving processes. Managers should always keep looking forward and always perfect and existing product or service.

Full Summary of Onward

Entrepreneurship is a very special type of ownership. These owners often use their own blood, sweat, and tears to run the business. The loyalty and love for the company cannot be recreated by anyone. I think that Howard Schultz is the perfect example of a passionate entrepreneur. Howard Schultz grew up on the wrong side of the tracks in Brooklyn. Nothing about his life was easy or handed to him. He knew he wanted to run a company that respected its employees unlike the numerous ones his dad had worked for.

On September 7, 1982 Howard moved to Seattle and began to work for the first Starbucks store as the head of marketing. Because of this he was able to discover his true passion: Coffee. After visiting Milan and Verona, he discovered how eloquently the Italian made and drank espresso. They didn’t gulp it down to hurry and get a get jolt. The Italians savored every sip and took time to relax and socialize. He knew he had to bring that same atmosphere to people in the US. Howard left Starbucks to open his own business Il Giornale. He opened two espresso bars in Seattle and one in Vancouver, Canada. In 1987, his former employers offered to sell Starbucks and the roasting plant. He found some investors and merged the two companies. Howard decided to keep the name Starbucks Coffee Company and by the end of that year there were 11 stores and 100 employees.

Schultz wanted to create an experience that customers could enjoy. His top two goals for his business were to build shareholder value and profit while acting through lens of social consciousness.  Starbucks also offered full heath care benefits and equity in the form of stock options for both part-time and full-time employees. This is almost unheard of for part-time employment.  He said “No business can do well for its shareholders without first doing well by all the people its business touches.” (Schultz, 2011) I believe there is a lot of truth in this statement. I think most businesses get too caught up in profit percentages and lose focus on what is most important in this world which is people. Up until 2007, Starbucks kept growing at a rapid and successful rate. People often joked that there was literally a Starbucks on every corner. Starbucks tripled to almost 9000 stores. Of the 9000, 525 stores were opened outside the US. Starbucks also ventured into the store-within-a-store concept, opening stores inside Barnes & Noble and Target. Starbucks was also to be served in hotels and restaurants.

Starbucks’ intentions were to make it easier to access and cut down on the wait lines. They didn’t know too much rapid growth could quickly backfire and send them in the wrong direction. Starbucks began to focus on expanding internationally. They started added music, books, and movies to the list of products sold in the stores. Poor business decisions about where and when to open new stores and poor employee training led to a 47% drop on Wall Street.

On January 2008, Howard Schultz returned Starbucks as CEO. He wanted to focus on building the company and shareholder values back up. He would do this by returning to Starbucks roots while innovating and reinventing the coffee market. The main thing was not to cast blame, but learn from the mistakes. One Tuesday in February 2008, Starbucks closed all of its 7,100 stores for three hours to retrain baristas. A simple note taped to the doors of the store read, “We’re taking time to perfect our espresso. Great espresso requires practice. That’s why we’re dedicating ourselves to honing our craft.” (Schultz, 2011)  That day Starbucks suffered a $6 million in sales and labor costs. Howard knew that Starbucks was straying from their mission statement which was to serve the best espresso and inspire the human spirit.

Starbucks held and annual leadership conference for about 10,000 manager and partners. At this conference a new plan was introduced. The plan was called the Transformation Agenda. This Agenda created a new mission statement that focused on becoming one of the most recognized and respected brands in the world. The Agenda also mentioned seven big moves to achieve this goal. The seven big moves are: 1. be the undisputed coffee authority. 2. Engage and inspire our partners. 3. Ignite the emotional attachment with our customers. 4. Expand our global presence- while making each store the heart of the local neighborhood. 5. Be a leader in ethical sourcing and environmental impact. 6. Create innovative growth platforms worthy of our coffee. 7. Deliver a sustainable economic model. Starbucks knew that there was no quick fix, but these moves would lead them in the right direction.

Starbucks used the Transformation Agenda as a guideline and quickly began creating new ideas and products that would bring them out of the economic slump. After several years of research with their suppliers, Starbucks began using hot-coffee cups in the US and Canada containing 10 percent post-consumer recycled fiber. This would save an estimated 78,000 trees and removing 3 million pounds from the solid waste stream every year. (Schultz, 2011)   Starbucks also donates five cents for every bottle of Ethos water to provide children with access to clean water. It is also one of the largest buyers of Fairtrade certified coffee in the world. Fairtrade supports thousands of farmers and their families.

Starbucks was also faced with new powerful competitors coming in a taking advantage of their vulnerability.  McDonalds created a new coffee line of blended and hot espresso drinks. Many customers embraced the flavor.  Starbucks new that they needed to create a new, more appealing blend that wasn’t as bold as the dark roast.  After many trial and errors, the team created the perfect blend. They named it Pike Place Roast, after the first store in Seattle. The new blend was able to delight more palates. Starbucks also went back to grinding all the coffee beans in stores before each pot was brewed. A maximum hold time of 30 minutes was enforced before the coffee was to be thrown out and a fresh pot was brewed. Starbucks decided that Pike Place Roast would be offered 365 days a year to establish and more consistent blend to customers. They would also rotate new and different blends alongside Pike Place Roast.  This blend became the #1 whole-bean coffee.

Another issue Starbucks focused on was the lack of customer / barista interaction. Their espresso machines that were in stores often were too tall and created a barrier between the customer and barista. One of Starbucks core values was to establish and create human connection. This barrier prevented that. A family-owned Swiss company in Lake Lucerne set out to help solve this problem. Starbucks owned Thermoplan Verismo 801, but needed something that better fit the company. Thermoplan successfully created the Mastrena espresso machine that catered to Starbucks in every way. It sat four inches lower allowing that crucial visible and verbal integration to take place. It also helped provide more consistent drinks for the customers.

One of the best ideas that helped Starbucks climb out of the slump was a customer’s reward program. This program included a free beverage with every pound of coffee beans purchased, free refills on brewed coffee, and Starbucks would customize beverage for free. This was genius, no more paying for extras like soy milk and flavored syrups. This program rewarded its loyal customers and created incentives for new customers.  All customers had to do was register the cards online.

There were also many decisions that were painstakingly hard to make.  In July 2008, Starbucks numbers were still steadily declining in the market. They realized introducing new products and ideas to draw customers in would not be enough to sustain the company. Starbucks had to start scaling back and make necessary cuts in their operating costs. The first thing they had to do was close six hundred US stores. This long and grueling process didn’t come without its complaints and even customers fighting for their local store. Each store was reviewed more than once before the decision to close it was final. During this process about 7% of Starbucks workforces (12,000 positions) were laid off. Schultz said, “Building a great, enduring company requires thoughtfulness and, at times, the courage to make very difficult decisions.” (Schultz, 2011)  Schultz realized that success cannot be measured by numbers. Starbucks had to get back to what really mattered, which was one cup, one customer, and one experience at a time.

Starbucks stores were using really out dated store technology. It became really bad when employees could download and view email on their phones before they could on the store operating system. Starbucks realized they need to supply their managers the tools they need to succeed.  Not long after the entire store received an upgrade. Managers were given laptops and baristas received a newer, easier to use register. They also focused on cutting back waste in stores and the roasting plants. Focusing on small everyday processes can add up to save a lot of money. Schultz also appointed a new head of distribution. His efforts reorganized the shipping process to provide more efficient delivery. It also ensured fresher products.

Not all of Starbucks ideas were major hits with the customers.  Howard Schultz was in Bologna when he discovered this new cold beverage. It was a smooth, sweet smoothie-like treat that was not available in the US. It could be mixed with fruit, milk, or yogurt and still taste absolutely delicious. After him and his team went to the company and had a formal taste test, the room for profit was hard to ignore. The margin could be as high as 70 percent if priced right. Schultz plan was to have a major launch of the new product in 300 stores in California. Starbucks named this fresh, drinkable treat Sorbetto and had high hopes for it. They even called it the next Frappuccino. Before the launch, Schultz realized that the huge profit margin had drastically shrunk due to higher cost of goods. They also had to purchase hundreds of new machines to mix the drink. In the end Sorbetto turned out to be as hoped and was pulled from the menu. Schultz said, “Yes, opportunities to transform Starbucks for profitable, sustainable growth existed everywhere, but no single move, no product, no promotion, and no individual would save the company.” (Schultz, 2011)

Starbucks did have one idea hidden up there sleeve years in the making. They just didn’t know it at the time. In the early years of the company, a man named Don Valencia was intent on creating a full bodied instant coffee that tasted like it was fresh brewed. At first Starbucks was against anything that was instant because they wanted to create the best coffee brand in the world. Most avid coffee drinkers view instant coffee as inferior. In a way they are right because it is made with the lowest quality beans. Don worked for years trying to come up with a quality instant coffee but the idea got moved aside for other projects. In their attempts to create the instant coffee, the team created a coffee powder that wasn’t quite high quality enough for Don’s instant coffee, had another purpose. The power became known as BBCB; the extract became the new coffee base for Starbucks blended Frappuccino beverages and bottled Frappuccino.  The new powder reduced Frappuccino’s prep time and preserved its authentic coffee taste, as well as boosted the products profitability.  After Don left the company the idea came back up and the team continued with gusto. They eventually made a breakthrough and created a powder that when combined with water, tasted and smelled like a brewed coffee.  The product is called VIA. Starbucks now gave customers the option of enjoying a cup of coffee anytime anywhere. They could take the individual packets along with them anywhere. But most of the experts were against Starbucks selling instant coffee, and they were wrong.  Starbucks made sure to take the time and market the new product right. Design and slogan were key to stay away from the “instant” label they feared. Starbucks VIA simply said, “Starbucks coffee, in an instant.” They created a positive spin and recreated a niche for instant coffee.

All of these decisions and products slowly brought Starbucks out of the economic slump. They didn’t have to use a government bailout or file for bankruptcy. Starbucks realized what mistakes they were making and focused on fixing those core concepts that had once brought the company success. I also believe that in treating their employees, farmers, partners, and customers with the utmost respect gave them an unforeseen advantage. People actually believed in the company and that with a little time, the company could get back on its feet. Eventually Starbucks did, and with a vengeance. They constantly set out to break goals and continue to grow. But they won’t make the same mistakes as before. Schultz realized that everything needed to be in balance for the company to have sustainable growth. Finding that right balance is a constant battle, but it’s worth fighting for.

Starbucks has introduced a huge movement in social conscience. Companies should focus on strengthening communities and in effect strengthening the country and the world. They have worked with Fairtrade and Conservation International to ensure farmers get treated right. In 2008, Starbucks hosted a leadership conference in New Orleans, LA.  As part of the conference agenda, partners and managers would volunteer service project throughout the city. Starbucks 10,000 partners and managers volunteered 50,000 hours of time. Starbucks also ran TV adds encouraging people to vote for the last presidential election and to volunteer time in their community. In return Starbucks would give out free brewed coffee on that day. They donate time and money to countless organizations. Starbucks is also moving toward leaving a smaller carbon footprint.

I think there is a lot to learn from Starbucks both as companies, and as people. They really are finding that right balance between profits, customer satisfaction, and are still able to have a social conscience. I believe there really are no ploys or gimmicks, just hard work and commitment that have paid off big. Starbucks has never stopped trying to grow, not just in number of stores, but better practices. Anyone can earn a profit, but I think it takes a true leader to do that and make the world a little bit better place that it was the day before. Since Starbucks expansion is rising globally, there are endless possibilities for growth and change. There are many downfalls and pit stops in life, but it takes courage and hard work to make it through the hard times. Starbucks is a true testament of a company spiraling downward, but being able to rise against all odds and come out greater in the end. I think the new American dream, or perhaps human goal, is to be profitable and socially conscience while doing that. Howard Schultz and Starbucks are proof that it is possible.

The Video Lounge

Howard Schultz explains Starbucks goals

http://www.cnn.com/video/standard.html#/video/bestoftv/2012/03/22/pmt-Howard-Schultz.cnn?iref=videosearch

I chose this video because it shows the success of Starbucks. Unlike so many other major companies, Starbucks didn’t accept any government bailout or file for bankruptcy. Starbucks embraced their mistakes and search for new and better ways to grow the company. A year after the book was published; Starbucks is still creating new innovative ideas and products that will ensure their sustainability. But I think that the biggest news is while doing all of these things, they are also contributing millions of dollars to better help communities big and small. Starbucks social consciousness is remarkable and I think more businesses should model themselves after Starbucks.

Starbucks asks Are you in? Featuring MC Yogi

I also included this video as an example of their dedicated work to better improve communities. Starbucks is using their power and influence to encourage people to donate their time to help others. They also launched their first TV ad to encourage Americans to vote in the last presidential election. In return Starbucks would give out free cups of brewed coffee. I think it is amazing all of the things that can get accomplished when major leaders focus on a more sustainable planet rather than greedy profit goals.

Personal Insights

Why I think:

• The author is one of the most brilliant people around…or is full of $%&#, because:

The author is one of the most brilliant people around because Howard Schultz isn’t just focused on profits; he has a social conscience too. I chose this book because I am an avid drinker of Starbucks. At first, I thought Howard Schultz rambled on and embellished on a lot of situations. After finishing the book, I am amazed by all the things I didn’t not know before. Starbucks is truly a company with a conscience. Howard was able to take his passion, turn it into a multimillion dollar business, and improve the planet in numerous ways. He is living the ultimate American dream. I think that there is an incredible amount the business world can learn from him in terms of leadership and social responsibility.  

• If I were the author of the book, I would have done these three things differently:

1. I would have organized the subject matter into more of a timeline structure. It got a little bit confusing when stories started in one chapter and where picked up again five chapters later. Even laying it out periodically in the index would help organize it a little better.
2. I would better improve the book by avoiding repetitiveness. I think it is necessary to reiterate an issue to drive the point home, but don’t overdo it. Once it is explained, the issue only needs to be referenced.
3. I would better improve the book by having other key players contribute to major events. I would have been neat to see what was going through their minds before a shareholders’ meeting. There were a lot of original memos and speeches, but another point of view would have been a fresh perspective.

• Reading this book made me think differently about the topic in these ways:

1. Reading this book made me think differently about Starbucks as a company. I always go to it, but never really appreciated or understood it. Now that I know the mission statement and core values, I look for those things in the store.
2. I think differently about social responsibility on a corporate level. Starbucks is making a huge impact because its top leaders care more about people and our planet than profits. Starbucks shows a good balance between running a business and being responsible for making this a better earth.
3. I think differently about my future employment. My whole like I thought working for a company that focuses on employee benefits was rare. Now I am researching companies that respect employees and are more socially responsible. I am also making sure the company’s core values are similar to mine.

• I’ll apply what I’ve learned in this book in my career by:

1. I know in order to grow; you much consistently look for ways to improve. I you ever feel comfortable, then the rug is about to get pulled from under you. No company is safe from failure. I will strive to better myself and my employees. I will focus on improvements both big and small.
2. Now I know that being socially responsible doesn’t have to cost millions of dollars. If you find enough people with the same values and goals, unthinkable things are possible. If I am ever in a position to lead, I hop e I can lead my team to volunteer hours and small movements to make lives better.
3. I will try to apply what I learned from this book in my everyday life by focusing more on human connections. In the past being successful was moving at a fast pace and getting a lot of things done. Now I think everyone needs to stop chasing money and focus on people. If you treat people right, they return to the business. Profit and customer traffic will increase simultaneously.

• Here is a sampling of what others have said about the book and its author:

Onward received many positive reviews. Many reviews commented on the raw emotion that Howard portrayed in the book. He didn’t leave any of the negative or bad issues out. He also expressed his feelings about the leaked memo and other things that but Starbucks in the spotlight. Onward provides a fresh perspective from the view of the CEO in times of hardship.

I and many other people are curious about behind the scenes events that take place in a company. We often wonder how they came to that decision and why. Onward takes us through the thought process for Starbucks. It lets readers see all of the decisions they made and how it impacted Starbucks.

Bibliography

“Starbucks F3Q08 (Qtr End 6/30/08) Earnings Call Transcript”. Seeking Alpha. July 31, 2008. Retrieved May 13, 2009.

Miller, Claire (January 29, 2009). “Starbucks Will Close 300 More Stores”. New York Times. Retrieved June 6, 2011.

Memo to Starbucks: Dig In, Smell the Coffee, Fight Back by Carl Horowitz

“The Insider: Principal roasts Starbucks over steamy retro logo”. Seattle Post-Intelligencer. September 11, 2006. Retrieved May 23, 2007.

Schwaner-Albright, Oliver (March 26, 2008). “Tasting the Future of Starbucks Coffee From a New Machine”. The New York Times. Retrieved April 1, 2010.

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Contact Info

To contact the author of this article, “Management by the Book: An Overview of Onward by Howard Schultz for Practicing and Aspiring Managers” please email Emily.Hanegan@selu.edu.

About the Publisher  

David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of his student’s publications regarding:

• management concepts (http://toptenmanagement.blogspot.com/)
• book reviews (http://wyld-about-books.blogspot.com/) and
• international foods  (http://wyldaboutinternationalfoods.blogspot.com/)                                 

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Cover via Amazon

Executive Summary

Economics is one of the greatest fields of study. It captures the deep thoughts and concepts of psychology and sociology, along with the never disappointing logic of business.  Dictionary.com defines economics as “the science that deals with the production, distribution, and consumption of goods and services, or the material welfare of humankind”, even though these ideas are a part of economics, the subject matter can be much more thoroughly explored.  Charles Wheelan, author of Naked Economics: Undressing the Dismal Science, explains in depth the different aspects of economics and what situations or behaviors affect it. He uses his intellectual and sometimes humorous analogies to simplify and break down complicated economical issues.  Wheelan does a great job at trying to let his audience understand the composition of economics with topics like the power of markets and human behavior, what kind of government involvement can have an affect on an economy, and globalization and trade (Wheelan Charles, 2003).  

An economy is made of many markets, which in a certain sense are the reflections of human choices and behaviors.  Most economist agree people make financial or business decisions based on whatever makes them as well off as possible.  We try to maximize our utility, making us more productive and better off overall.  People will produce a good or a service only if it is beneficial to them, which in return creates a market.  If someone finds they are most efficient at creating the latest software and can make profit, they have incentive to do so.  In a free market, businesses make decisions don’t only choose what goods and services to produce but hot to increase profits.  In the end though, it’s the individuals and businesses are the most efficient and productive at producing a good or service that will stick around to see tomorrow (Wheelan Charles, 2003).

Charles Wheelan at the University of Chicago (Photo credit: frozenchipmunk)

Government is what allows a good market and healthy economy possible.  There are great debate, especially in the United States, of how and to what degree the government should be involved with its economies and markets, but most economist agree that the prerequisite for a striving economy is appropriate government policies and procedures.  Above the policies and regulations, one of the most important aspects to proper government involvement is to have a government with the least amount of corruption.  Corruption in governments will wreak havoc and cripple a national economy by making it difficult for entrepreneurs and businesses to be created or expand their market.  Overall it’s crucial for political officials to set in place policies and regulations that incentivize people to take risk with investing and create an environment for free market to flourish (Wheelan Charles, 2003).

Is it a small world after all?  A national economy is composed of so much more then the local businesses and markets, and it has never been more obvious.  Globalization and trade are major components of economics, and Wheelan makes strong points suggesting that global trade makes everybody better off as a whole.  In recent years, many manufacturers have relocated into low-labor cost countries trying to increase profits by lowering cost, but Wheelan argues letting an industry or manufacturer go overseas will help the local economy.  Goods and services that are reduced in cost will be reduced in price, which in return will give us more purchasing power.  Trade can also benefit the low-labor cost workers by provider a higher income (Wheelan Charles, 2003).  

Charles Wheelan describes in his book, Naked Economics: Undressing the Dismal Science, how many structures and detail playing into economics.  This book is an extremely informative educational tool that will help understand all the bits and pieces of economics.  

The Ten Things Managers Need to Know from Naked Economics

   
1.    Individuals make decisions that result with the best personal outcome, and they will continually strive for it, as long as there are incentives to work harder and be more productive.  One goal of a business manager is to make as much profit as possible.  Accomplishing this goal requires counting the opportunity cost to determine the best management options.  How much time, money, or other opportunities are costing me for me to partake in this investment?  It’s important to understand that managers, as well as employees, will make decisions based upon incentives that are present (Wheelan Charles, 2003).
                                                                                                                                                                                                   

2.    One of the most significant parts of an economy is government and the business affecting policies that are set in place.  In order for an economy to grow and be successful, it needs government.  Property rights are a way government can give incentive for businesses to invest and research, resulting in new jobs and positively impacting the economy (Wheelan Charles, 2003).

3.    Socialism is not the enemy of capitalism and free-markets, but rather monopolies can be the sole reason for crippling a free-market economy.  Taking that into consideration, government can be one of the biggest monopolies, and in the United States’ government has monopolized certain goods and service.  Government shouldn’t be the sole provider of a good or service unless there is a suffice reason why private companies can’t do it, for example national defense and some health care.  In a fruitful economy, governments provide policies and regulation to try and defuse monopolies by providing a competitive market (Wheelan Charles, 2003).

4.    Information is power!  One of the basic principles of economics is information will determine our behavior.  Both, government and people need as much information as possible to make the most reasonable and responsible decisions.  The Food and Drug Administration, a prime example of an informative government source, is a government agency that provides safety to the public through research and information.  Even though it is understood that people will make decisions to benefit themselves, the only way they can make good decisions is if they are well informed (Wheelan Charles, 2003).  

5.    As a manager it’s important to understand that human capital is the key element of gaining wealth and growth.  Wheelan describes human capital as, “ the sum total of skills embodied with an individual: education, intelligence, charisma creativity, work experience, entrepreneurial vigor, and even the ability to throw a baseball fast” (p. 127). Having high human capital will give the ability to be more productive, and growing productivity is essential to increase standard of living.  As complex as it may seem, the fact is high human capital will result in greater wealth and growth (Wheelan Charles, 2003).  

6.    Wealth may seem like something a person must be born into, but there are some great financial practices that can help tremendously.  Save, invest, and repeat, are the first three steps in trying to become prosperous.  These steps may seem easy enough, but those who really can practice these fundamentals will set themselves up for success (Wheelan Charles, 2003).  

7.    Nations evaluate their economy by calculating the Gross Domestic Product, which is the total value of all goods and services produced.  GDP per capita, a nation’s GDP divided by its population, shows an annual perspective of how much the average income is.  However, GDP has its flaws in giving an accurate account for social progression.  GDP includes money used to build after recovering from a natural disaster, and doesn’t take into account social issues like pollution (Wheelan Charles, 2003).

8.    The United States created the Federal Reserve to control monetary policy, regulate commercial banks, and make sure financial systems are properly working.  It uses monetary policy to set interest rates in order to monitor inflation and promote business in the economy (Wheelan Charles, 2003).
.  

9.    One of the main objectives for the U.S. congress is to help stabilize and support the economy with providing appropriate fiscal policies.  When the national economy is spiraling down, congress can implement taxes or increase spending to try and turn it around.  In an economic recession, congress can infuse an economy with spending in attempts to boost the purchases of goods and services and lead to healthier markets (Wheelan Charles, 2003).

10.     American jobs seem like they keep picking up and moving across the sea.  Government can create trade barriers trying to prevent this from occurring, but protectionism just leads to less production.  Allowing jobs and manufacturers to go over sea will increase production and cause workers to find jobs that they are more productive (Wheelan Charles, 2003).  

Full Summary of Naked Economics

The Power of Markets

• In order to understand economics you must understand markets and how they work.  Markets are created when an exchange of goods and services take place.  They are composed of individuals and businesses trying to maximize their utility.  The market economy is a powerful force for making our lives better.   
  • Maximizing a person utility doesn’t mean their being selfish, but it all depends on what gives the person utility.  
  • The objective of business is to make profit and profit opportunities attract business.
  • There are several different types of barriers for new firms to get into a market such as physical, natural, or legal.
  • As we get wealthier we pick up more luxury goods, which are items that we purchase more of as our income increases.  
    • Preferences that want to protect the environment would be considered a luxury good.
    • Is it fair for those of us who live comfortably to impose our preferences on those in developing world?
  • Markets use supply and demands to set prices for goods and services, finding the equilibrium.  
    • Because we use price to allocate goods, most markets are self-correcting.

Incentive Matters

• Individuals need incentives to encourage positive economical behavior.  
  • People will be productive only to the extent of incentives.  

• Government policies must be written to incentivize the behavior for desired outcome.

Government and the Economy

• Government has an enormous role in economics, and its essential to understand the effects of government involvement in an economy.

• Externality is the gap between the private cost and the social cost of some behavior.
  • Leaving markets alone isn’t always the best solution because there could be great social cost from markets
    • Taxing behaviors that have negative externalities can incentivize alternative behavior.
• Economies and markets aren’t possible without good governments.
  • Government policies and regulations, like property rights, encourage individuals to pursue market endeavors.  
  • As technology progresses so do government policies, in particular with Internet industries.

Government and Economy II

• Governments aren’t anti market; monopolies can cripple an economy.
  • Government should stay away from being the sole provider of a good or service unless there is reason why private companies can’t do it.
    • This still leaves government with national defense and some health care.
  • Government doesn’t have to actually do the work.  They can hire private companies, like construction workers to build roads and bridges
• Countries who don’t protect property rights and simply regulate heavily are “grabbing hands” and not “helping hands”.  They consist of rich bureaucrats who never actually provide safer or healthier conditions to consumers and workers.

Economics and Information

• Government and people need as much information as possible to make the best decisions available.   
  • Branding is a major part of information that contributes to an individual’s economical behavior.
    • People have reliability or trust in your brand, which affects their purchases.
  • Racial profiling can also be apart of information affecting our decisions.
    • The more factual information that is available for someone the less prejudices or stereotypes will be involved.   

Productivity and Human Capital

• Human capital is on of the most imperative capital that will determine your productivity capacity.  
  • It’s what is left of you if you were stripped away of all your assets.
  • People with high human capital do well in job market, while opposite is true.
• Globalization makes more opportunities for skilled workers and more competition for unskilled workers.
• There is an ever-increasing income gap between low-income and high-income individuals.
  • Should we do anything about the expanding gap between high-income and low-income people because the expanding gap with give unskilled people incentive to gain human capital, like becoming more educated?
  • The biggest problem with income gap is most people are concerned about relative income and envy others with high-incomes.
• Theoretically in an economy there is no reason why everyone can’t be rich or well off financially.  
  • If there is a required job that no one wants, eventually society will induce someone to do it by paying him or her enough.

Financial Markets

• As complex as the financial system may be, we can break it down to the simple matter that all financial instruments are based on four simple needs.
  • In modern economics businesses need the ability to raise capital.  Allowing them the credit will help the companies invest and operate at full capacity.
  • Companies also have a need to store, protect, and make profitable use out of excess capital.
  • There are many financial instruments that assist with the need to insure against risk.
  • In markets it’s always advantageous to see into the future and try to speculate what will be taking place.
• On a personal level there are several maneuvers that an individual can do to assist them in the financial market.  
  • One of the most basic steps is to simply save, invest, and repeat.
  • The world belongs to those who take risk, so it’s important to take risk and earn reward.
  • Diversifying can be one of the best ways to securing your financial footing in the financial market.  Don’t keep all your eggs in one basket.  

The Power of Organized Interest

• Politicians create pork-barrel legislation that spends enormous amounts of money on small projects that don’t have much benefit to the society as a whole.
  • A small group is an advantage because a small-organized group can have more legislative pull than a large unorganized group.
  • The problem with pork-barrel legislation is there are a lot of small-organized groups.
  • Thousands of subsidies benefitting specific industries collectively have a high toll on the taxpayer.
• Capitalism uses “creative destruction” to destroy old structures and replacing them with new ones.  
  • Creative destruction might be good for the economy, but bad for current industries. People in these industries will do whatever it takes to stay in the game.
  • There should be programs that help victims of creative destruction, but protecting individuals from it will harm both sides.

Keeping Score

• Gross Domestic Product represents the total value of all goods and services produced in an economy, and is widely used tool to calculate the status of an economy.
  • GDP might not be the most efficient tool to give an accurate account of social progression because it’s such a simply figure.
    • Money used to build after recover a natural disaster is added to GDP, which doesn’t add to actual economy.
    • GDP doesn’t take into account social issues like pollution.
• Fiscal policy uses the government’s capacity to tax and spend as a lever for prying the economy from reverse into forward.
  • In order for fiscal policy to be successful three things must happen:
    • Congress and the president must agree to a plan that contains an appropriate remedy
    • They must pass their plan in a timely manner
    • The prescribed remedy must kick in fast
• Monetary policy is second way government can affect the economy by having the chairman of the Federal Reserve raise or lower short-term interest rates.
• More appropriate measurements to calculate social growth should contain the following:
  • Unemployment rate, which is affected by GDP. If GDP grows by 3% then unemployment stays the same, while every percentage change of GDP will affect half a percentage in unemployment in the opposite direction.  
  • Poverty rate which is determined by the income necessary to buy the basic need adjusted to inflation.
  • Income inequality using the Gini Index.  It scores a country on equality of pay where 0 is pay being equal for all and 100 is on person receiving all of the national income.
  • Size of government and what percentage of GDP does the national government spend.
  • Budget deficit/surplus showing whether a government is running a deficit or surplus budget.
  • Demographics are important because the U.S. population is aging which can put a toll on government entitlements for the retired.
  • Total national happiness is not something that can be calculated easily, but most would agree that it’s important to understand what climates create happy people.

The Federal Reserve

• The Federal Reserve is responsible for controlling the money supply into the country.
  • It’s composed of twelve reserve banks and a seven-person board of governors.
  • Deciding monetary policy must be done with caution and intense care because it can be difficult to judge the results of every action.
    • The Fed has to be careful as to not set the interest rate to low and causing massive inflation.
• Federal Open Market Committee is the committee within the Fed that actually decides monetary policy.
  • They use monetary policy to affect discount rates, which is the interest rate commercial banks can borrow funds directly from the Fed.
  • Monetary policy is also used to manipulate the federal funds rate, which is rate that banks charge other banks for short-term loans.

International Economics

• In international economics, on of the most important components to consider is exchange rate. Exchange rate is amount you can exchange domestic currency for foreign currencies.
  • One method of do this is by using the purchasing power parity, which uses the amount of currency required to purchase select goods to determine exchange rate.
• The strength of a national currency carries much weight in an economy.
  • Currencies that have higher PPP are called “overvalued”; while, currencies that buy less are “undervalued”.
  • A weak currency isn’t the worst thing to happen to an economy because it will help increase exports.

Trade and Globalization

• Opening up our borders helps everyone get wealthier and better off.  
  • If local jobs are shipping across seas it still will help us grow our economy.  Even though in the short term we might lose jobs, it helps us gain new ones and lowers the cost of goods.
  • Our goal should always to be as productive as possible, and sometimes we see that in the form of industries moving over seas.
• Many people like to complain about sweatshops and manufacturers employing children and making them work in hard conditions, but trade is also good for them.
  • There’s a reason why children are willing to work in a sweatshop, because it’s literally the best option they have.  It might not be the prettiest sight in the world, but it unarguable provides a higher source of income.
  • For poor countries, cheap and inexpensive labor is their comparative advantage.

The Wealth and Poverty of Nations

• In economics we must understand there are many factors contributing to a successful economy.
  • It’s important to have effective government institutions, that protect the public from “big business”
  • Government should create policies that encourage entrepreneurial behavior, and property rights is one of the biggest incentives it provides
  • Government has to watch out how much regulation it puts on businesses, and carefully design those regulations to ensure the desired outcome.
  • Human capital is the most important element for individuals to have, in order to be productive.
  • In order for an economy to flourish, it’s essential to have open borders and promote global trade.
  • U.S. must be wise with making responsible fiscal and monetary policies that will result in social progression.  
  • Wars can have a devastating effect on an economy and cost enormous amounts of money.
  • One of the main requirements for economical growth is to have growth in productivity, and women should be utilized just as much as men, giving us the potential to reach our capacity for productivity.  

The Video Lounge

In the video, Charles Wheelan discusses the greatness of markets and how public policy affect markets.  Markets are where voluntary exchanges take place, and businesses will adapt to conditions to be most productive.  Public policy tries to affect markets by setting regulations to have greater outcome for society as a whole.  

Personal Insights

Why I think:

• The author is one of the most brilliant people around, and has great understanding of how economics work.  Wheelan is great at taking complex issues and simplifying them for his audience to understand.  Even though economical arguments usually divide our country, its obvious that the author is more concerned about having his facts accurate and having a greater understanding of economics than just pleasing a specific political party.

• If I were the author of the book, I would have done these three things differently:

1.    I thought the book had a lot of insight on global trade, but the author never explained how having higher exports vs. imports is a good thing. Obviously a country wants to produce more than it consumes, but I felt as if the book didn’t thoroughly explain this subject enough.

2.    The author didn’t go into excessive detail about our nations natural recourses and the affect they have on our economy.  He mentioned that natural recourses aren’t always the path to a successful economy, but I would have like him to discuss how to take advantage of our natural recourses.  

3.    I think education could have been a bigger topic in this book.  The author made describes human capital as being important to individuals and education falling underneath it.  However, I feel that education is an important social issue and there is strong correlation between education and economy.  

• Reading this book made me think differently about the topic in these ways:

1.    In order to grow economically, individuals and businesses must grow in productivity levels.  If productivity levels stay the same from year to year there will be no growth making it difficult to fight inflation.  

2.    Cutting taxes for the rich doesn’t mean a guarantee for economic growth.  Cutting taxes can incentivize people to invest, but it still will leave the national government with less revenue.  

3.    Gross Domestic Product isn’t the most accurate account for economical growth.  It’s a significant tool, but it does not take into account things that should, while taking into account figures that it shouldn’t.  

• I’ll apply what I’ve learned in this book in my career by:

1.    I have a newfound respect for human capital, and I plan on using my education to build my skill levels.  This will help me be able to be more productive and open up options that I wouldn’t have had before reading this book.  

2.    Understanding how government policies and regulations have economical impact causes a need to be politically involved.  I find it more important then ever to get involved with voting people into public office.

3.    Designing policies to steer people with a desired behavior must be done with the proper incentives.  I think being a manager it’s important to set up your business to give employees incentive to grow their productivity level.  

• Here is a sampling of what others have said about the book and its author:

Eli Bendersky wrote an extensive review of Naked Economics encouraging readers to pick it up.  Bendersky said, “So if you’re interested in economics and want to know how the modern financial machine ticks, you should definitely read this book ASAP” (Bendersky, 2008).  He believes that if economics is something that you are interested in or just want to gain new knowledge, than Naked Economics is for you.

London Book Review did an in detail review of Naked Economics giving it much credit for writing an informing yet entertaining book.  However, they seemed to have found some flaws in Charles Wheelan’s thinking.  The London Book Review stated, “Here again Wheelan fails to point out the role of many corporations and Western governments in installing, supporting and arming the corrupt local elites that he rightly attacks for keeping their people poor and uneducated” (”London book review,” 2008).  

K. Sean describes the book Naked Economics as accomplishing the Impossible.  Sean K. felt like the book to the “idiots guide” approach to economics without ever comer across as condescending.  The book is great at education on economics for those of all different level of economics knowledge (Sean, 2009).

Bibliography

Bendersky, E. (2008, July 13). Book review: “naked economics” by Charles Wheelan. Retrieved from http://Eli.thegreenplace.net/2008/07/13/naked-economics-by-Charles-Wheelan/

Economics. (n.d.). Collins English Dictionary – Complete & Unabridged 10th Edition. Retrieved March 29, 2012, from Dictionary.com website: http://dictionary.reference.com/browse/Economics

London book review: Naked economics. (2008 , April 3). Retrieved from http://www.londonbookreview.com/lbr0007.html

Sean, K. (2009, January 29). 100 books in one year: Naked economics by Charles Wheelan. Retrieved from http://www.pajiba.com/book_reviews/naked-economics-book-review.php

U.S. Department of Human Health and Services, U.S. Food and Drug Administration. (n.d.). What we do. Retrieved from U.S. Food and Drug Administration website: http://www.FDA.gov/AboutFDA/WhatWeDo/default.htm

Wheelan, Charles. (2003). Naked economics: Undressing the dismal science. New York, NY: W. W. Norton and Company.

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Contact Info

To contact the author of this article, “A Management in a Minute Book Overview of Naked Economics by Charles Wheelan for Practicing and Aspiring Managers” please email seth.leonard@selu.edu.

About the Publisher  

David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of his student’s publications regarding:

• management concepts (http://toptenmanagement.blogspot.com/)
• book reviews (http://wyld-about-books.blogspot.com/) and
• international foods  (http://wyldaboutinternationalfoods.blogspot.com/)                                             

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When I first took up my post I called all the members together and requested a new committee should be elected.  Among themselves twelve members were elected with myself as Chairman. 

My next task was to examine the position of the Club to see how best the committee and myself could work together in furthering the Clubs progress. 

I also examined the Clubs financial position only to discover its finance was nil, and in debt for over £320, with various complaints of bouncing cheques and threats of Court action.  I had to call upon the Clubs creditors in person to explain the Club’s position.  I also had to ask for time to pay, giving each one my personal assurance the money would be paid as soon as the Club was back on its feet. 

I then decided to take what action was necessary hoping to have the full backing of the Club’s committee.  At my first attendance of the Management Committee where members of the Clubs committee were present, I was given full backing to work with the Club committee to do what was best for the Club and its members.  At this meeting I outlined in brief what I saw as the future activities in the form of Social, Educational and Work Experience projects for members. 

 I also explained that I would like to see all the young West Indians leaving school joining the Club as their entitlement also taking full part in all its activities. 

It was also my aim to work with the schools in furthering the cause of the black youth and to call upon the Educational Authority for their support. 

Before this meeting I had already had a meeting with Mr Alan Clifford from the Coventry Education Department, where we had a frank discussion resulting in his promise of full support for the projects mentioned.  Also I had met Police Inspector Jackson, Chairman of the Management Committee, where the standing orders of the Club were discussed.  

A membership card of the Club was presented to me in no uncertain terms, meaning the aims written on the cards must be adhered to.  This meeting also discussed the lease of the basement at the HolyHead Club.  A firm warning was given that the terms of the lease must be adhered to at all cost, in the interest of the Club.  

This meeting left me with a clear mind on the action I should take to secure the future of the Club. 

In the interest of the Club and its members money must be made by the Club, in order for it to pay its way, as there was no money available from other sources.  It was plain to be seen money could be made at the Friday and Saturday night discos, both at the gate and the bar, but to do so changes had to be made with strict control enforced. 

In the first place the Club was making money every week, but had no money and was heavily in debt.  I had no doubt the members who were running the activities were doing their best, but they just could not control the expenditure. 

I do accept the principle that Club members who had no money should not go hungry and should not be deprived  the privileges of the Club’s activities, but one had to weigh up the needs of the Club with the needs of the individual members.  In doing so at all times the needs of the Club must be first, as the Clubs needs are the needs of all the members and not the individual. 

The Discos were open to non members some of whom came from as far as Birmingham, these people had little respect for the Club or for the Clubs properties, misusing the Clubs facilities and smashing everything in sight.  All the equipments were smashed and chucked into the back room, doors off their hinges, locks broken, gent’s toilets in a deplorable condition. 

When the rain fell the basement was completely flooded out.  In fact the complete Club was below the statutory sanitary conditions required by law.  In the interest of the Management Committee, the Club and the members of the Club, this state of affairs could not continue to exist.  

I proposed at the Management Committee meeting that the £500.00 from the Commission should be spent on the Clubs improvement.  It was agreed the Club should be tiled out along with other repairs, such as the doors, toilets, and other minor work, also the installation of two 18″ Extractor Fans. 

Unfortunately when the sum of £495.00 was paid to tile the floor and the sum of £115.00 was spent for timber no more money was available.  At the moment the work has stopped awaiting further finance.