Linear Programming Help (Management Science)

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EC Problem Listing

All of the problems described below are taken from the 4th edition of a McGraw-Hill text entitled “Operations Management,” authored by Stevenson and Ozgur.
This was the text formerly used for instruction in BMDS3371 until it went out of print in early 2013.
EC Problem #1
Aviation Electronics produces three types of switching devices. Each type involves a two-step assembly operation. The assembly times are shown in the table below.
Assembly Time per Unit
Station #1 Station #2
Model A 2.5 minutes 3.0 minutes
Model B 1.8 minutes 1.6 minutes
Model C 2.0 minutes 2.2 minutes
Each workstation has a daily working time of 7.5 hours. Manager Bob Parkes wants to obtain the greatest possible profit during the next five working days. Model A
yields a profit of $8.25 per unit, Model B a profit of $7.50 per unit, and Model C a profit of $7.80 per unit. Assume the firm can sell all it produces during this time but it
must fill outstanding orders for 20 units of each model type.
Formulate the linear programming model of this problem. Solve the model to show the maximum amount of profit possible given the constraints outlined above.
EC Problem #2
A farm consists of 600 acres of land, of which 500 acres will be planted with corn, soybeans, and wheat, according to these conditions:
a.) At least half of the planted acreage should be in corn.
b.) No more than 200 acres should be soybeans.
c.) The ratio of corn to wheat planted should be 2:1.
It costs $20 an acre to plant corn, $15 an acre to plant soybeans, and $12 an acre to plant wheat.
Formulate this problem as an LP model that will minimize planting cost while achieving the specified conditions.
EC Problem #3
Reproduce the LP model needed for #2 above but modify it to reflect the need to plant at least 500 acres.
EC Problem #4
A high school dietician is planning menus for the upcoming month. A new item will be spaghetti with sauce. The dietician wants each serving to contain at least
10 grams of protein and at least 40 grams of carbohydrates. Spaghetti contains 5 grams of protein and 32 grams of carbohydrates per cup, and the sauce contains
4 grams of protein and 5 grams of carbohydrates per cup. For aesthetic reasons, the dietician wants the ratio of spaghetti to sauce to be 4:1.
Spaghetti costs $0.30 per cup to buy and prepare, the sauce costs $0.40 per cup to buy and prepare. The dietician wants to minimize the cost per serving and keep
the calories per serving to 330 or less. The sauce contains 100 calories per cup, and the spaghetti contains 160 calories per cup.
Formulate a linear programming model that will minimize the cost per serving subject to the various constraints decribed above.

EC Problem #1 – Set Up

Assembly Time per Unit (minutes) Profit per Unit
Station 1 Station 2
Model A 2.5 3.0 $ 8.25 NOTE 1: As I start to set-up these spreadsheets, I ofen find it helpful to a.) repeat key information
Model B 1.8 1.6 $ 7.50 from the problem AND format it in a way that will allow me to understand/remember what the heck
Model C 2.0 2.2 $ 7.80 the numbers mean. So you will see that I have added labels wherever possible.
Total 6.3 6.8 This is for my benefit. Solver doesn’t really care one way or the other.
Work Time Available 2250 2250 NOTE 2: As I start to set-up these spreadsheets, I ALWAYS keep in mind that Solver (or any other
(per week) LP) will ask me four types of questions. The first is to choose a target cell…the objective function.
In this case, my target is cell D21. See the formula inside that cell? Before you move on to the next
Work Time Used 0 0 problem, it is my sincerest hope that you understand how and why I placed this formula in this cell.
(per week) The second thing Solver will ask for is the choice of maximizing or minimizing. (Right?)
Yes, it might also ask if we want to set the objective function to a specific value…but we need not
Optimal Production Values Totals worry about this for these problems. The third question Solver will ask is “which cells/values shall we
Station 1 Station 2 change?” to get our optimal solution. In this case, I’ve set-up the spreadsheet so that the cells
Model A 0.00 0.00 0.00 to be changed are those from B16 to C18 (in yellow shaded area).
Model B 0.00 0.00 0.00
Model C 0.00 0.00 0.00 NOTE 3: The last question that Solver will ask is one about the constraints required by the problem.
Some of these will be VERY easy to get Solver to digest. Some, however, will require a bit of
Total Profit extra foresight/planning. I begin by listing the constraints below (see Cells A23 through A31).
$ – 0 This listing is for my own benefit, sort of like a mental checklist I use to make sure that I have given
Solver all needed constraints. Let’s consider an “easy” constraint such as X1 >=20. Given the way
Define: Model A = X1, Model B = X2, Model C = X3 I have set this spreadsheet up, I’ll tell Solver that the value in Cell D16 must be greater than or
Maximize: z= 8.25X1 + 7.50X2 + 7.80X3 equal to 20. Do you see why I picked this cell and understand the formula I have placed within it?
Constraints: Now, how to tackle a more complicated constraint such as either of the first two on the list? Well,
#1–2.5X1 + 1.8X2 + 2.0X3 <= 2,250 minutes I had to think a little about this but decided to make use of formulas in Cells B11 (Constraint #1)
#2–3.0X1 + 1.6X2 + 2.2X3 <= 2,250 minutes and C11 (Constraint #2). Take a close look at the formula in either of these cells (please).
#3–X1 >= 20 Do they make sense to you? I’ll ask Solver to set B11 less than or equal to 2,250…and, in so
#4–X2 >= 20 doing, will have tackled Constraint #1. I’ll do likewise with C11 to tackle Constraint #2.
#5–X3 >= 20
X1, X2, X3 >= 0 Ahem, given #3, 4, and 5, we don’t really have to worry about NOTE 4: Please be advised that the approach I have given here is one of countless formats
these non-negativity constraints. Right? that could work. There is no one way to do these. I just thought I would share my approach as one
that I’ve found particularly helpful in prior terms/years when assisting students who have
no prior experience with linear programming.

EC Problem #2 – Set Up

Planting Costs Amounts Planted Amounts Spent NOTE 1: So again, please notice that I began this set-up with a repeat of key info from the problem AND
(per acre) placed labels wherever I thought they’d be helpful (to my eye and mind).
X1 (corn) $ 20.00 $ – 0
X2 (soybeans) $ 15.00 $ – 0 NOTE 2: My target cell will be D6. The formula inside it is, essentially, the objective function (same as Row 12).
X3 (wheat) $ 12.00 $ – 0 Right? We will want to minimize these costs.
Total 0 $ – 0
NOTE 3: Now which cells/values will I ask Solver to “change”? Yep, C3 to C5.
NOTE 4: How about the constraints? Well, these are a little trickier than Problem #2. Let’s start
Part A with the easier ones first. Constraint #3…I’ll ask Solver to make sure that the value in Cell C3 is greater than or
Define: Corn = X1, Soybeans B = X2, Wheat = X3 equal to 250 acres. Constraint #4…I’ll ask Solver to make sure that the value in Cell C4 is less than or equal
Minimize: z= 20X1 + 15X2 + 12X3 to 200 acres. Then I will add that the value in Cell C4 must be greater than or equal to zero and likewise for
Constraints: the value in Cell C5. Let’s tackle Constraint #1 next. I’ll do this by asking Solver to set the value in Cell C6
#1–X1 + X2 + X3 = 500 acres exactly equal to 500 (acres). Right? Now, don’t answer too quickly please. First look at the formula I have
#2–X1 – 2X3 = 0 0 0 0 placed in Cell C6. Make sense?
#3–X1 >= 250
#4–X2 <= 200 NOTE 5: The trickiest part of this set-up is, no doubt, how to get Solver to recognize the second constraint.
#5–X1, X2, X3 >= 0 Again, there is more than one way to accomplish this goal. Here, I have broken the constraint up into
three parts. The first of these is “X1″…see Cell B15. The next is “-2X3″…see Cell C15. Now, look closely
Ahem, X1>=0 is one non-negativity constraint that we won’t bother with. at the formula I have placed in Cell D15. Summing B15 and C15 is my way of teaching you this approach AND
Do you see why? It is because we will have covered this base when we getting Solver to do its magic. I’ll ask Solver to set this value equal to Zero. Yes?
get Solver to recognize/digest Constraint #3.

EC Problem #3 – Set Up

Planting Costs Amounts Planted Amounts Spent NOTE 1: I intentionally decided not to place too many notes here.
(per acre) I am hopeful that my set-up here and notes from the prior worksheet
X1 (corn) $ 20.00 $ – 0 allow you to understand most/all of what I have done here.
X2 (soybeans) $ 15.00 $ – 0
X3 (wheat) $ 12.00 $ – 0
Total 0 $ – 0
Part B
Define: Corn = X1, Soybeans B = X2, Wheat = X3
Minimize: z= 20X1 + 15X2 + 12X3
Constraints:
#1–X1 + X2 + X3 >= 500 acres
#2–X1 + X2 + X3 <= 600 acres
#3–X1 – 2X3 = 0 0 0 0
#4–X1 – X2 – X3 >= 0 0 NOTE 2: This is an added constraint which says at least of half of planted areage
#5–X2 <= 200 must be corn. X1 >= (X1 + X2 + X3)/2 (Does my math make sense to you?)
#6–X1, X2, X3 >= 0 We multiply both sides by two. So 2 X1 >= (X1 + X2 + X3)
Then subtract X1 from both sides. So X1 >= X2 + X3
Then subtract X2 and X3 from both sides. So X1 – X2 – X3 >= 0
NOTE 3: We see a very interesting (some might say counterintuitive) result here…
as we compare this output to that which was obtained in Part A. Remember,
the difference between these two parts mainly involves the ability to plant
more crops. So one might initially expect larger values in the optimal solution.
Can you see why this actually isn’t the case here?

EC Problem #4 – Set Up

Cost to Prepare Amounts Total Cost NOTE 1: No notes. Please look at what I have done here and let me know
(per cup) Prepared (per serving) what does and /or does NOT make sense to you?
X1 – Spaghetti $ 0.30 0.00 $ – 0
X2 – Sauce $ 0.40 0.00 $ – 0
Total $ 0.70 0.00 $ – 0
Define: Spaghetti = X1, Sauce= X2
Minimize: z= .3X1 + .4X2
Constraints:
#1–5X1 + 4X2 >= 10 grams of protein (per serving) 0.00 0.00 0 So each serving will have ?? grams of protein and
#2–32X1 + 5X2 >= 40 carbohydrates (per serving) 0.00 0.00 0.00 each serving will have ??.?? carbs and
#3–X1 – 4X2 = 0 (not too much sauce per serving) 0.00 0.00 0 a spaghetti to sauce ratio of ?:? and
#4–160X1 + 100X2 <= 330 calories (per serving) 0.00 0.00 0.00 ???.?? calories per serving.
#5–X1, X2 >= 0 (all values must be non-negative)

Comp-Xm Final Questions

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Digby’s balance sheet has $94,680,000 in equity. If next year, assets decrease by $4,000,000 and liabilities increase by $2,000,000, what will be Digby’s book value?
Select: 1
  $92,679,000
  $96,680,000
  $38,651,000
  $88,679,000

 

 

 

Which company has the least efficient SG&A/Sales ratio?
Select: 1
  Chester
  Baldwin
  Andrews
  Digby

 

 

 

 

Your Competitive Intelligence team reports that a wave of product liability lawsuits is likely to cause Digby to pull the product Drum entirely off the market this year. Assume Digby scraps all capacity and inventory this round, completely writing off those assets and escrowing the proceeds to a settlement fund, and assume these lawsuits will have no effect on any other products of Digby or other companies. Without Digby’s product Drum how much can the industry currently produce in the Core segment? Consider only products primarily in the Core segment last year. Ignore current inventories. Figures in thousands (000).
Select: 1
  7,278
  3,886
  8,528
  8,256
  9,506
  9,236
  4,618

 

 

 

 

In the month of March the Digby Corporation received and delivered orders of 178,000 units at a price of $15.00 for revenue of $2.670mil for their product Dim. Digby uses the accrual method of accounting and offers 30 day credit terms. By the end of May Digby had collected payments of $2.670mil for the March deliveries. How much of the collected $2.670mil should Digby show on the March 31st income statement and how much on the May 31st income statement?
Select: 1
  $0 in March; $2.670mil in May
  $0.881mil in March; $1.789mil in May
  $1.335mil in March; $1.335mil in May
  $2.670mil in March; $0 in May

 

 

 

 

Chester Corp. is downsizing the size of their workforce by 10% (to the nearest person) next year from various strategic initiatives. How much will the company pay in separation costs if each worker receives $5,000 when separated?
Select: 1
  $122,000
  $1,094,000
  $305,000
  $2,735,000

 

 

 

 

Assume Andrews is paying a dividend of $1.50 (per share). If this dividend stayed the same, but the stock price rose by 10% what would be the dividend yield?
Select: 1
  109.09%
  177.27%
  .73%
  136.36%

 

 

 

 

Last year Ark charged $3,040,000 Depreciation on the Income Statement of Andrews. If Ark sold a fully depreciated piece of equipment at a loss, the effect on Andrews’s financial statements would be (all other items remaining equal):
Select: 1
  Increase Net Cash from operations
  Decrease Net Cash from operations on the Cash Flow Statement
  Just impact the Balance Sheet
  No impact on Net Cash from operations

 

 

 

 

Assume Baldwin is producing 1,568 units of Bolt next year. What would Bolt’s plant utilization be?
Select: 1
  96.90%
  93.10%
  95.00%
  96.02%

Assignment: Qualitative And Observational Studies

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Review the scenario discussed in chapter 8 (in “business research method.pdf“), discussion question 8 (on the final pages of the chapter). Then, in no more than one page(double space), answer the following questions:

  • 8a: What other information might you find useful to observe?
  • 8b: How would you decide what information to collect?
  • 8c: Devise the operational definitions you would need.
  • 8d: What would you say in your instructions to the observers you plan to use?
  • Additional question: List any potential ethical issues in the conduct and execution of your research and propose how to address them.

    The Twelfth Edition of Business Research Methods reflects a thoughtful revision of a market standard. Students and professors will find thorough, current coverage of all business research topics presented with a balance of theory and practical application. Authors Donald Cooper and Pamela Schindler use managerial decision-making as the theme of Business Research Methods and they provide the content and structure to ensure students’ grasp of the business research function. This textbook also encourages and supports the completion of an in-depth business research project, if desired, by the professor.

    Features of the Twelfth Edition include: The MindWriter continuing case study has been updated to focus on online survey methodology with Appendix A including a newly redesigned MindWriter CompleteCare online survey.

    New and revised Snapshots and PicProfiles provide 82 timely mini-cases presented from a researcher’s perspective, with additional mini-cases added to the accompanying instructor’s manual.

    New and revised Closeups offer in-depth examination of key examples.

    All new From the Headlines discussion questions.

    The Cases section contains the abstract for the new case: Marcus Thomas LLC Tests Hypothesis for Troy-Bilt Creative Development, and an updated case-by-chapter suggested-use chart.

    Some textbook content has been moved to the Online Learning Center, and includes the Multivariate Analysis chapter, and several end-of-chapter appendices.

    For more information, and to learn more about the teaching and study resources available to you, visit the Online Learning Center: www.mhhe.com/cooper12e

    CourseSmart enables access to a printable e-book from any computer that has Internet service without plug-ins or special

    software. With CourseSmart, students can highlight text, take and organize notes, and share those notes with other CourseSmart users. Curious? Go to www.coursesmart.com to try one chapter of the e-book, free of charge, before purchase.

    BUSINESS RESEARCH METHODS

    TWELFTH EDITION

    DONALD R . COOPER | PAMELA S. SCHINDLER

    BU SIN

    ESS RESEA RC

    H M

    ETH O D S

    TWELFTH EDITION

    C O O P ER

    SC H IN

    D LER

    M D

    D A

    L IM

    #1221015 12/17/12 C Y

    A N

    M A

    G Y

    E L

    O B

    L K

     

     

    >businessresearchmethods

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    The McGraw-Hill/Irwin Series in Operations and Decision Sciences

    SUPPLY CHAIN MANAGEMENT

    Benton Purchasing and Supply Chain Management Second Edition

    Burt, Petcavage, and Pinkerton Supply Management Eighth Edition

    Bowersox, Closs, Cooper, and Bowersox Supply Chain Logistics Management Fourth Edition

    Johnson, Leenders, and Flynn Purchasing and Supply Management Fourteenth Edition

    Simchi-Levi, Kaminsky, and Simchi-Levi Designing and Managing the Supply Chain: Concepts, Strategies, Case Studies Third Edition

    PROJECT MANAGEMENT

    Brown and Hyer Managing Projects: A Team-Based Approach First Edition

    Larson and Gray Project Management: The Managerial Process Fifth Edition

    SERVICE OPERATIONS MANAGEMENT

    Fitzsimmons and Fitzsimmons Service Management: Operations, Strategy, Information Technology Eighth Edition

    MANAGEMENT SCIENCE

    Hillier and Hillier Introduction to Management Science: A Modeling and Case Studies Approach with Spreadsheets Fifth Edition

    Stevenson and Ozgur Introduction to Management Science with Spreadsheets First Edition

    MANUFACTURING CONTROL SYSTEMS

    Jacobs, Berry, Whybark, and Vollmann Manufacturing Planning & Control for Supply Chain Management Sixth Edition

    BUSINESS RESEARCH METHODS

    Cooper-Schindler Business Research Methods Twelfth Edition

    BUSINESS FORECASTING

    Wilson, Keating, and John Galt Solutions, Inc. Business Forecasting Sixth Edition

    LINEAR STATISTICS AND REGRESSION

    Kutner, Nachtsheim, and Neter Applied Linear Regression Models Fourth Edition

    BUSINESS SYSTEMS DYNAMICS

    Sterman Business Dynamics: Systems Thinking and Modeling for a Complex World First Edition

    OPERATIONS MANAGEMENT

    Cachon and Terwiesch Matching Supply with Demand: An Introduction to Operations Management Third Edition

    Finch Interactive Models for Operations and Supply Chain Management First Edition

    Jacobs and Chase Operations and Supply Chain Management: The Core Third Edition

    Jacobs and Chase Operations and Supply Chain Management Fourteenth Edition

    Jacobs and Whybark Why ERP? A Primer on SAP Implementation First Edition

    Schroeder, Goldstein, and Rungtusanatham Operations Management in the Supply Chain: Decisions and Cases Sixth Edition

    Stevenson Operations Management Eleventh Edition

    Swink, Melnyk, Cooper, and Hartley Managing Operations across the Supply Chain First Edition

    PRODUCT DESIGN

    Ulrich and Eppinger Product Design and Development Fifth Edition

    BUSINESS MATH

    Slater and Wittry Practical Business Math Procedures Eleventh Edition

    Slater and Wittry Practical Business Math Procedures, Brief Edition Eleventh Edition

    Slater and Wittry Math for Business and Finance: An Algebraic Approach First Edition

    BUSINESS STATISTICS

    Bowerman, O’Connell, Murphree, and Orris Essentials of Business Statistics Fourth Edition

    Bowerman, O’Connell, and Murphree Business Statistics in Practice Sixth Edition

    Doane and Seward Applied Statistics in Business and Economics Fourth Edition

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    Lind, Marchal, and Wathen Statistical Techniques in Business and Economics Fifteenth Edition

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    * Available only through McGraw-Hill’s PRIMIS Online Assets Library.

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    >businessresearchmethods

    Donald R. Cooper Florida Atlantic University

    Pamela S. Schindler Wittenberg University

    twelfthedition

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    www.mhhe.com

    BUSINESS RESEARCH METHODS, TWELFTH EDITION

    Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved. Printed in the United States of America. Previous editions © 2011, 2008, and 2006. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

    Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

    This book is printed on acid-free paper.

    1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4 3

    ISBN 978-0-07-352150-3 MHID 0-07-352150-7

    Senior Vice President, Products & Markets: Kurt L. Strand Vice President, Content Production & Technology Services: Kimberly Meriwether David Managing Director: Douglas Reiner Senior Brand Manager: Thomas Hayward Marketing Manager: Heather Kazakoff Managing Development Editor: Christina Kouvelis Freelance Development Editor: Jane Ducham Director, Content Production: Terri Schiesl Content Project Manager: Mary Jane Lampe Buyer: Nichole Birkenholz Photo Researcher: Danny Meldung Cover Designer: Studio Montage, St. Louis, MO Cover Image: © Pamela S. Schindler Media Project Manager: Prashnathi Nadiapalli Typeface: 10/12 Times Compositor: MPS Limited Printer: R. R. Donnelley

    All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.

    Library of Congress Cataloging-in-Publication Data Cooper, Donald R. Business research methods / Donald R. Cooper, Florida Atlantic University, Pamela S. Schindler, Wittenberg University.—Twelfth edition.

    pages cm.—(The McGraw-Hill/Irwin series in operations and decision sciences business statistics) ISBN 978-0-07-352150-3 (alk. paper) 1. Industrial management—Research. I. Schindler, Pamela S. II. Title. HD30.4.E47 2014 658.0072—dc23

    2012047045

    The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill, and McGraw-Hill does not guarantee the accuracy of the information presented at these sites.

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    To Kelli Cooper, my wife, for her love and support.

    Donald R. Cooper

    To my soulmate and husband, Bill, for his unwavering support and sage advice.

    Pamela S. Schindler

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    vi

    walkthrough Bringing Research to Life reveals research in the trenches. Much of research activity isn’t obvious or visible. These opening vignettes are designed to take the student

    behind the door marked RESEARCH. Through the activities of the principals at Henry & Associates, students

    learn about research projects, many that were revealed to the authors off the record . The characters and names

    of companies are fi ctional, but the research activities they describe are real–and happening behind the scenes in

    hundreds of fi rms every day.

    Learning Objectives serve as memory flags. Learning objectives serve as a road map as stu dents

    start their journey into the chapter. Read fi rst, these

    objectives subconsciously encourage students to

    seek relevant material, defi nitions, and exhibits.

    Jason Henry and Sara Arens, partners in Henry & Associates, are just wrapping up a Web- based briefi ng on the MindWriter project. Jason and Sara are in Boca Raton, Florida. Myra Wines, MindWriter’s director of consumer affairs is participating from Atlanta, as are others, including Jean-Claude Malraison, MindWriter’s general manager, who joined from Delhi, India, and Gracie Uhura, MindWriter’s marketing manager, and her staff, who joined from a conference room in their Austin, Texas, facility.

    >bringingresearchtolife

    “Based on the poll results that are on your screen, you

    have reached a strong consensus on your fi rst priority.

    The research strongly supports that you should be

    negotiating stronger courier contracts to address the

    in-transit damage issues. Congratulations,” concluded

    Jason.

    “That wraps up our briefi ng, today. Sara and I are

    happy to respond to any e-mail questions any of you

    might have after reading the summary report that has

    been delivered to your e-mail. Our e-mail address is on

    screen, and it is also on the cover of the report. Myra,

    I’m handing control of the meeting back to you.”

    As Myra started to conclude the meeting, Sara was

    holding up a sign in front of Jason that read. “Turn off

    your microphone.” Jason gave a thumbs-up sign and

    clicked off his mic.

    “Thank you, Jason,” stated Myra. “The research

    has clarifi ed some critical issues for us and you have

    helped us focus on some probable solutions. This

    concludes the meeting. I’ll be following up soon with

    an e-mail that contains a link to the recorded archive

    of this presentation, allowing you to share it with your

    staff. You will also be asked to participate in a brief

    survey when you close the Web-presentation window.

    I’d really appreciate your taking the three minutes it

    will take to complete the survey. Thank you all for

    attending.”

    As soon as the audience audio was disconnected,

    Myra indicated, “That went well, Jason. The use of

    the Q&A tool to obtain their pre-report ideas for action

    was a stroke of genius. When you posted the results as

    a poll and had them indicate their fi rst priority, they

    were all over the board. It helped them understand that

    one purpose of the research and today’s meeting was to

    bring them all together.”

    “Sara gets the credit for that stroke of genius,”

    claimed Jason after removing his microphone and

    clicking on his speakerphone. “She is a strong

    proponent of interaction in our briefi ngs. And she

    continually invents new ways to get people involved

    and keep them engaged.”

    “Kudos, Sara,” exclaimed Myra. “Who gets the

    credit for simplifying the monthly comparison chart?”

    “Those honors actually go to our intern, Sammye

    Grayson,” shared Sara. “I told her while it was a

    suitable graph for the written report; it was much too

    complex a visual for the presentation. She did a great

    job. I’ll pass on your praise.”

    “Well,” asked Myra, “where do we go from here?”

    “Jason and I will fi eld any questions for the next

    week from you or your staff,” explained Sara. “Then

    we will consider this project complete—until you

    contact us again.”

    “About that,” Myra paused, “I’ve just received an

    e-mail from Jean-Claude. He wants to meet with you

    both about a new project he has in mind. He asks if he

    could pick you up at the Boca airport on Friday, about

    2:30 p.m. He says his fl ying offi ce will have you back

    in time for an early dinner.”

    Sara consulted her iPhone and indicated she was

    available. Jason looked at his own calendar and smiled

    across the desk at Sara. “Tell Jean-Claude we’ll meet

    him at the airport. Any idea what this new project is

    about?”

    “Not a clue!”

    MindWriter

    After reading this chapter, you should understand . . .

    >learningobjectives

    1 What issues are covered in research ethics.

    2 The goal of “no harm” for all research activities and what constitutes “no harm” for participant, researcher, and research sponsor.

    3 The differing ethical dilemmas and responsibilities of researchers, sponsors, and research assistants.

    4 The role of ethical codes of conduct in professional associations.

    Ethics in Business Research

    >chapter 2

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    Special tools for today’s visual learner. A transformation is taking place in many of our classrooms. During the last decade, more and more of our

    students have become visual—not verbal—learners. Verbal learners learn primarily from reading text. Visual

    learners need pictures, diagrams, and graphs to clarify and reinforce what the text relates.

    Integrated research process exhibits reveal a rich and complex process in an understandable way.

    Every textbook has exhibits. We use these tables and line

    drawings to bring key concepts to life and make complex

    concepts more understandable.

    Within our array of exhibits is a very special series of

    32 fully integrated research process exhibits. Each

    exhibit in this series shares symbols, shapes, and colors

    with others in the series.

    Exhibit 1-3 is the overview exhibit of the research

    process, to which all other exhibits related to the process

    will link.

    Research Proposal

    Discover the Management Dilemma

    Define the Management Question

    Define the Research Question(s)

    Refine the Research Question(s)

    (type, purpose, time frame, scope, environment)

    Research Reporting

    ExplorationExploration

    Data Analysis & Interpretation

    Research Design Strategy

    Clarifying the Research Question

    Management Decision

    Data Collection & Preparation

    Data Collection Design

    Sampling Design

    Instrument Development & Pilot Testing

    Chapters 2–5

    Chapters 6–14

    Chapter 15

    Chapters 16–18

    Chapters 19–20

    Appendix A

    >Exhibit 1-4 The Research Process

    Subsequent exhibits (like this one for survey design)

    show more detail in a part of this process.

    Another exhibit in the series might layer the main process

    exhibit with additional information (like this exhibit from

    the ethics chapter).

    >Exhibit 13-5 Flowchart for Instrument Design: Phase 2

    Pretest Individual Questions

    Measurement Questions

    Interview Conditions

    Interview Location

    Interviewer ID

    Participant ID

    Geographic

    Sociological

    Economic

    Demographic

    Topic D

    Topic C

    Topic B

    Topic A

    Administrative Questions

    Target Questions

    Classification Questions

    Instrument Development

    • Sponsor’s right to quality research • Sponsor’s right of purpose nondisclosure • Researcher’s right to absence of sponsor coercion • Researcher’s right to absence of sponsor deception

    • Sponsor’s right to quality research

    • Participant’s right of informed consent • Participant’s right to privacy (refusal) • Sponsor’s right to quality research • Researcher’s right to absence of sponsor coercion

    • Participant’s right to privacy • Participant deception • Sponsor’s right to sponsor nondisclosure • Researcher’s right to safety

    • Sponsor’s right to findings nondisclosure • Participant’s right to confidentiality • Sponsor’s right to quality research • Researcher’s right to absence of sponsor coercion

    • Participant deception • Sponsor’s right to quality research

    • Sponsor nondisclosure

    Research Proposal

    Discover the Management Dilemma

    Define the Management Question

    Define the Research Question(s)

    Refine the Research Question(s)

    (type, purpose, time frame, scope, environment)

    Research Reporting

    ExplorationExploration

    Data Analysis & Interpretation

    Research Design Strategy

    Management Decision

    Data Collection & Preparation

    Data Collection Design

    Sampling Design

    Instrument Development

    Clarifying the Research Question

    >Exhibit 2-1 Ethical Issues and the Research Process

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    Some topics deserve more attention—with their own chapter!

    An emphasis on presentation. Increasingly, researchers are making oral presentations of

    their fi ndings though Web-driven technologies. We address

    this and other oral presentation formats and issues with a

    separate chapter.

    All researchers increasingly need qualitative skills. Researchers increasingly admit that quantitative research

    can’t reveal all they need to know to make smart business

    decisions. We capture the best of the current qualitative

    methods and reveal where and how they are used.

    Help in moving from management dilemma to research design. This is where talented people can steer research in the

    wrong or right direction. We devote a chapter to

    providing students with a methodology for making the

    right decisions more often.

    Ethical issues get the attention they deserve. Ethical issues abound in business research but may

    go unnoticed by students who need a framework to

    discuss and understand these issues. We devote a

    chapter to building that framework.

    Presenting Insights and Findings: Oral Presentations

    “

    1 How the oral research presentation differs from and is similar to traditional public speaking.

    2 Why historical rhetorical theory has practical infl uence on business presentation skills in the 21st century.

    3 How to plan for the research presentation.

    4 The frameworks and patterns of organizing a presentation.

    5 The uses and differences between the types of materials designed to support your points.

    6 How profi ciency in research presentations requires designing good visuals and knowing how to use them effectively.

    7 The importance of delivery to getting and holding the audience’s attention.

    8 Why practice is an essential ingredient to success and how to do it; and, what needs to be assembled and checked to be certain that arrangements for the occasion and venue are ready.

    After reading this chapter, you should understand . . .

    >learningobjectives

    >chapter 20

    Listeners have one chance to hear your talk and can’t “re-read” when they get confused. In many situations, they have or will hear several talks on the same day. Being clear is particularly important if the audience can’t ask questions during the talk.

    Mark D. Hill,

    professor of computer sciences and electrical and computer engineering,

    University of Wisconsin-Madison

    ”

    After reading this chapter, you should understand . . .

    >learningobjectives

    1 How qualitative methods differ from quantitative methods.

    2 The controversy surrounding qualitative research.

    3 The types of decisions that use qualitative methods.

    4 The variety of qualitative research methods.

    Sometimes people are layered. There’s something totally different underneath than what’s on the surface . . . like pie.

    Joss Whedon, author and screenwriter

    “ ”

    Qualitative Research

    >chapter 7

    It is critical to use serious business judgment about what types of information could possibly be useful and actionable for an organization. We have seen enormous resources expended on “data projects” that have no realistic chance of payoff. Indiscriminately boiling a data ocean seldom produces a breakthrough nugget.

    Blaise Heltai, general partner,

    NewVantage Partners

    “

    ”

    After reading this chapter, you should understand . . .

    > learningobjectives

    1 The purposes and process of exploratory research.

    2 Two types and three levels of management decision-related secondary sources.

    3 Five types of external information and the fi ve critical factors for evaluating the value of a source and its content.

    4 The process of using exploratory research to understand the management dilemma and work through the stages of analysis necessary to formulate the research question (and, ultimately, investigative questions and measurement questions).

    5 What is involved in internal data mining and how internal data-mining techniques differ from literature searches.

    Clarifying the Research Question through Secondary Data and Exploration

    >chapter 5

    After reading this chapter, you should understand . . .

    >learningobjectives

    1 What issues are covered in research ethics.

    2 The goal of “no harm” for all research activities and what constitutes “no harm” for participant, researcher, and research sponsor.

    3 The differing ethical dilemmas and responsibilities of researchers, sponsors, and research assistants.

    4 The role of ethical codes of conduct in professional associations.

    Ethics in Business Research

    >chapter 2

    “Today, it would be remiss to say that the privacy profession is anything but fl ourishing. Companies are increasingly hiring privacy offi cers and even elevating them to C-suite positions; the European Commission has proposed a statute in its amended data protection framework that would require data protection offi cers at certain organizations, and at the International Association of Privacy Professionals (IAPP) membership recently hit 10,000 worldwide .

    Angelique Carson, CIPP/US,

    International Association of Privacy Professionals ”

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    Students learn by and deserve the best examples.

    Snapshots are research examples from the researcher’s perspective. Snapshots are like mini-cases: They help a

    student understand a concept in the text by

    giving a current example. As mini-cases

    they are perfect for lively class discussion.

    Each one focuses on a particular application of

    the research process as it applies to a particular

    fi rm and project. You’ll fi nd more than

    82 of these timely research examples

    throughout the text and more in the Instructor’s

    Manual.

    Web addresses speed secondary data searches

    on companies involved with the example. be asked of participants. Four questions, covering numerous issues, guide the instrument designer in selecting appropriate question content:

    • Should this question be asked (does it match the study objective)?

    • Is the question of proper scope and coverage?

    • Can the participant adequately answer this question as asked?

    • Will the participant willingly answer this question as asked?

    The Challenges and Solutions to Mobile Questionnaire Design

    >snapshot

    “As researchers, we need to be sensitive to the unique chal-

    lenges respondents face when completing surveys on mo-

    bile devices,” shared Kristin Luck, CEO of Decipher. “Small

    screens, infl exible device-specifi c user input methods, and

    potentially slow data transfer speeds all combine to make

    the survey completion process more diffi cult than on a typi-

    cal computer. Couple those hindrances with reduced atten-

    tion spans and a lower frustration threshold and it’s clear that,

    as researchers, we must be proactive in the design of both

    the questionnaire and user-interface in order to accommodate

    mobile respondents and provide them with an excellent survey

    experience.”

    Decipher researchers follow key guidelines when designing

    surveys for mobile devices like smart phones and tablets.

    • Ask 10 or fewer questions

    • Minimize page refreshes—longer wait times reduce

    participation.

    • Ask few questions per page—many mobile devices

    have limited memory.

    • Use simple question modes—to minimize scrolling

    • Keep question and answer text short—due to smaller

    screens.

    • If unavoidable, limit scrolling to one dimension (vertical

    is better than horizontal).

    • Use single-response or multiple-response radio button

    or checkbox questions rather than multidimension grid

    questions.

    • Limit open-end questions—to minimize typing.

    • Keep answer options to a short list.

    • For necessary longer answer-list options, use drop-

    down box (but limit these as they require more clicks to

    answer).

    • Minimize all non-essential content

    • If used, limit logos to the fi rst or last survey page.

    • Limit privacy policy to fi rst or last survey page.

    <

    >

    10 of 24

    Menu

    • Debate use of progress bar—it may encourage

    completion but also may require scrolling.

    • Minimize distraction

    • Use simple, high-contrast color schemes—phones

    have limited color palettes.

    • Minimize JavaScript due to bandwidth concerns.

    • Eliminate Flash on surveys—due to incompatibility with

    iPhone.

    Luck is passionate about making sure that researchers recog-

    nize the special requirements of designing for mobile as mobile

    surveys grow in use and projected use, S shares her expertise at

    conferences worldwide. www.decipherinc.com

    Icons help students link parts of a richer, more complex example, told over a series of chapters.

    Some examples are so rich in detail that one Snapshot or exhibit just isn’t suffi cient. MindWriter is a

    computer laptop manufacturer that prides itself on customer service, especially when it comes to laptop

    repair at its CompleteCare center. Each time you see this icon in the text, you’ll be learning more about the

    customer satisfaction research that Henry & Associates is doing.

    MindWriter

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    The Closeup offers a more in-depth examination of a key example. Sometimes you just need more time and space to showcase all the detail of an example. This glimpse

    of the Closeup from Chapter 16 reveals two pages from a discussion on tabular data.

    Using Tables to Understand Data

    >closeup

    Because the researcher’s primary job is to discover the mes-

    sage revealed by the data, he or she needs every tool to reveal

    the message. Authors Sally Bigwood and Melissa Spore in their

    book Presenting Numbers, Tables, and Charts suggest that the

    table is the ultimate tool for extracting knowledge from data.

    The presence of any number within a table is for comparison

    with a similar number—from last year, from another candidate,

    from another machine, against a goal, and so forth. Using the

    author’s rules for table creation, a researcher exploring data by

    constructing a table should:

    • Round numbers. • Rounded numbers can be most easily compared, enabling us to more easily determine the ratio or relationship of one number to another.

    • If precision is critical to the number (e.g., you are researching taxes or design specifi cations or drug interactions), don’t round the numbers.

    • Arrange the num- bers to reveal patterns.

    • Order numbers from largest to smallest number. • In a vertically arranged table, order the largest number at the top. • In a horizontal arrangement, order the largest numbers on the left.

    • When looking for changes over time, order the numbers by year, from most distant (left or top) to most recent.

    • Use aver- ages, totals, or percentages to achieve focus.

    • An average provides a point for comparison. • Don’t use an average if the raw data reveal a bimodal distribution.

    • Totals emphasize the big picture.

    • Percentages show proportionate relationships more easily than raw data.

    • Compare like scales in a single table.

    • Convert numbers to a common scale when the numbers refl ect different scales (e.g., grams versus ounces of cereal consumption; monthly salary data versus hourly wage data).

    • Choose simplicity over complexity.

    • Several smaller tables reveal patterns better rather than one large, complex table.

    • Complex tables are used as a convenient reference source for multiple elements of data.

    • Use empty space and design to guide the eye to numbers that must be com- pared and to make patterns and excep- tions stand out.

    • Design a table with a smaller number of columns than rows.

    • Single-space numbers that must be compared.

    • Use gridlines to group numbers within a table; avoid gridlines between numbers that must be compared.

    • Use empty space to create gutters between numbers in simple tables.

    • Right-align column headers and table numbers.

    • Summarize each data display.

    • Write a phrase or sentence that summarizes your interpretation of the data presented; don’t leave interpretation to chance. • Summary statements might be used as the title of a table or chart in the fi nal research report. • The summary need not mention any numbers.

    • Label and title tables for clarity of message.

    • Titles should be comprehensive: Include what (subject of the title or message), where (if data have a geographic base), when (date or time period covered), and unit of measure.

    • Include common information in the title: It lengthens a title but shortens the table’s column headings.

    • Avoid abbreviations in column headings unless well known by your audience.

    • Avoid footnotes; if used, use symbols—like the asterisk—rather than numbers (numbers used as footnotes can be confused with the content numbers of the table).

    • For reference, provide an undertable source line for later reference.

    PicProfile offers a memory visual to enhance an example. In research, as in life, sometimes a picture is worth

    more than words. Sometimes you need to see what

    is being described to fully understand the

    foundation research principle.

    AN EXAMPLE

    Assume you were adetermining whether to expand into western Europe with distribution facilities to service online purchases of your

    specialty goods company.

    We start with the above table that presents data developed from several studies on online shopping and purchasing behavior in

    selected countries in western Europe. The data are ordered alphabetically by country. While arranging in alphabetical order may be

    ideal for randomization or reduction of bias, it isn’t a logical choice for clarity of data presentation.

    What data might you need to help you make your decision about distribution facilities? Do you need to know the average

    transaction size? If you don’t know the conversion rate of the euro to the dollar, can you interpret the table? Should you put

    your investment in the United Kingdom or elsewhere?

    Table 2 E5 Per Capita One-Year Online Spending (2010)

    Annual Spending (EUROs)

    Average Annual Purchases

    Annual Spending (US$)

    United Kingdom 2284.9 36 1736.2

    Germany 658.0 20 500.0

    France 664.5 16 505.0

    Italy 345.5 14 262.6

    Spain 560.1 10 425.6

    Currency Exchange Rate: 1 US$ = 1.316 EURO

    Table 1 Spending by Internet Users in Selected Western European Countries 2010 (EUROs in Billions)

    Annual Spending

    Annual Purchases

    France Euro 664.5 16

    Germany Euro 658.0 20

    Italy Euro 345.5 14

    Spain Euro 560.1 10

    United Kingdom Euro 2284.9 36

    >closeupcont’d

    Table 2 recasts the data using Bigwood and Spore’s guidelines. First the table title has changed; now the annual period on which

    the spending data are based is more obvious, as well as the fact that we are looking at spending per capita for the top 5 European

    Union performers, known as the E5. We’ve also changed the column headers to refl ect currency, and we have right-justifi ed the

    headers and the numbers. We’ve rearranged the table by Average Spending (EURO) in descending order and interpreted the (EURO)

    column by adding a dollar conversion column. We might not need the rightmost column if we were euro spenders ourselves but, if we

    are more familiar with another currency, the addition of this column helps us interpret the data. With this arrangement, does Germany

    look attractive? While it might not currently appear to be as strong a contender as the United Kingdom, we know it is fi scally strong

    and located in a more central location to the other countries being considered.

    >picprofi le According to the 2012 Greenbook Research Industry Trends (GRIT) report, the top four emerging techniques, among both research buyers and providers all involve Internet use. “A big climber, from actual 2011 to expected 2012, is Mobile Surveys, with clients/buyers jumping from a current 17% to an expected 53% and vendors expecting the increase to be from 24% to 64%.” Some speculate that the mobile survey may be approaching its tipping point. Other methodologies, like Mobile Qualita- tive, Mobile Ethnography, and Gamifi cation, are getting a lot of buzz in the industry, but have yet to capture buyer/client sup- port to the same degree that they have earned researcher interest. As in previous studies, researcher interest tends to lead on methodology. http://www.greenbook.org/PDFs/GRIT-S12-Full.pdf

    Source: “Spring 2012 Greenbook Research Trends Report,” GreenBook® | New York AMA Communication Services Inc., February 2012, p. 22.

    Leonard Murphy, “GRIT Sneak Peek: What Emerging Research Techniques Will Be Used in 2012?” Greenbook, posted February 20, 2012. Downloaded April 18, 2012, http://www.greenbookblog.org/2012/02/20/grit-sneak-peek-what-emerging- research-techniques-will-be- used-in-2012/.

    Emerging Research Techniques

    59 66

    66

    53 45

    46

    40 35

    32 21

    31 43

    46 31

    31 22 23 24

    24

    21

    19

    17

    16 10

    11 11

    9 13

    11 25

    13

    43

    64

    64

    706050403020100

    Social Media Analytics

    Online Communities

    Mobile Surveys

    Text Analytics

    Webcam-based Interviews

    Apps-based Research

    Eye Tracking

    Mobile Ethnography

    Mobile Qualitative

    Virtual Environments

    Crowdsourcing

    Visualization Analytics

    Prediction Markets

    Biometric Response

    NeuroMarketing

    Facial Analysis

    Gamification Methods Research provider (n=669) Research client (n=149)

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    Learning aids cement the concepts.

    Discussion questions that go one step further. Five types of discussion questions reveal differing levels of

    understanding—from knowing a defi nition to applying a concept.

    Terms in Review 1 How does qualitative research differ from quantitative

    research?

    2 How do data from qualitative research differ from data in quantitative research?

    3 Why do senior executives feel more comfortable relying on quantitative data than qualitative data? How might a quali- tative research company lessen the senior-level executive’s skepticism?

    4 Distinguish between structured, semistructured, and un- structured interviews.

    Making Research Decisions 5 Assume you are a manufacturer of small kitchen electrics,

    like Hamilton Beach/Proctor Silex, and you want to de- termine if some innovative designs with unusual shapes and colors developed for the European market could be successfully marketed in the U.S. market. What qualitative research would you recommend, and why?

    6 NCR Corporation, known as a world leader in ATMs, point-of-sale (POS) retail checkout scanners, and check- in kiosks at airports, announced in June 2009 that it would move its world headquarters from Dayton (OH)

    > discussionquestions

    bibliography 98

    data marts 102

    data mining 102

    data warehouse 102

    dictionary 98

    directory 100

    encyclopedia 98

    expert interview 94

    exploratory research 94

    handbook 99

    index 98

    individual depth interview (IDI) 94

    investigative questions 113

    literature search 94

    management question 108

    measurement questions 118

    custom-designed 118

    predesigned 118

    primary sources 96

    research question(s) 112

    secondary sources 96

    source evaluation 100

    tertiary sources 97

    >keyterms

    Terms in Review 1 Explain how each of the fi ve evaluation factors for a second-

    ary source infl uences its management decision-making value.

    a Purpose

    b Scope

    c Authority

    d Audience

    e Format

    2 Defi ne the distinctions between primary, secondary, and tertiary sources in a secondary search.

    3 What problems of secondary data quality must researchers face? How can they deal with them?

    Making Research Decisions 4 In May 2007, TJX Co., the parent company of T.J.Maxx and

    other retailers, announced in a Securities and Exchange Commission fi ling that more than 45 million credit and debit card numbers had been stolen from its IT systems. The company had taken some measures over a period of a few years to protect customer data through obfuscation and en- cryption. But TJX didn’t apply these policies uniformly across its IT systems. As a result, it still had no idea of the extent of the damage caused by the data breach. If you were TJX, what data-mining research could you do to evaluate the safety of your customer’s personal data?

    5 Confronted by low sales, the president of Oaks Interna- tional Inc. asks a research company to study the activities of the customer relations department in the corporation. What are some of the important reasons that this research project may fail to make an adequate contribution to the solution of management problems?

    6 You have been approached by the editor of Gentlemen’s Magazine to carry out a research study. The magazine has been unsuccessful in attracting shoe manufacturers as advertisers. When the sales reps tried to secure advertising from shoe manufacturers, they were told men’s clothing stores are a small and dying segment of their business. Since Gentlemen’s Magazine goes chiefl y to men’s clothing stores, the manufacturers reasoned that it was, therefore, not a good vehicle for their advertising. The editor believes that a survey (via mail questionnaire) of men’s clothing stores in the United States will probably show that these stores are important outlets for men’s shoes and are not declining in importance as shoe outlets. He asks you to develop a proposal for the study and submit it to him. Develop the management–research question hierarchy that will help you to develop a specifi c proposal.

    7 Develop the management–research question hierarchy for a management dilemma you face at work or with an orga- nization to which you volunteer.

    8 How might you use data mining if you were a human re- sources offi cer or a supervising manager?

    Bring Research to Life 9 Using the MindWriter postservicing packaging alternative

    as the research question, develop appropriate investigative questions within the question hierarchy by preparing an exhibit similar to Exhibit 5-8 .

    10 Using Exhibits 5-6, 5-8, 5b-1, and 5b-2, state the research question and describe the search plan that Jason should have conducted before his brainstorming sessions with Myra Wines. What government sources should be included in Jason’s search?

    >discussionquestions

    mail survey a relatively low-cost self-administered study both delivered and returned via mail.

    main effect the average direct infl uence that a particular treat- ment of the IV has on the DV independent of other factors.

    management dilemma the problem or opportunity that requires a decision; a symptom of a problem or an early indication of an opportunity.

    management question the management dilemma restated in question format; categorized as “choice of objectives,” “gen- eration and evaluation of solutions,” or “troubleshooting or control of a situation.”

    management report a report written for the nontechnically ori- ented manager or client.

    management–research question hierarchy process of sequen- tial question formulation that leads a manager or researcher from management dilemma to measurement questions.

    manuscript reading the verbatim reading of a fully written presentation.

    mapping rules a scheme for assigning numbers to aspects of an empirical event.

    marginal(s) a term for the column and row totals in a cross-tabulation.

    matching a process analogous to quota sampling for assigning participants to experimental and control groups by having participants match every descriptive characteristic used in the research; used when random assignment is not possible; an attempt to eliminate the effect of confounding variables that group participants so that the confounding variable is present proportionally in each group.

    MDS see multidimensional scaling. mean the arithmetic average of a data distribution. mean square the variance computed as an average or mean. measurement assigning numbers to empirical events in com-

    pliance with a mapping rule. measurement questions the questions asked of the participants

    or the observations that must be recorded. measures of location term for measure of central tendency in a

    distribution of data; see also central tendency . measures of shape statistics that describe departures from the sym-

    metry of a distribution; a.k.a. moments, skewness , and kurtosis . measures of spread statistics that describe how scores cluster

    or scatter in a distribution; a.k.a. dispersion or variability (variance, standard deviation, range, interquartile range, and

    measures. mini-group a group interview involving two to six people. missing data information that is missing about a participant or

    data record; should be discovered and rectifi ed during data preparation phase of analysis; e.g., miscoded data, out-of- range data, or extreme values.

    mode the most frequently occurring value in a data distribution; data may have more than one mode.

    model a representation of a system that is constructed to study some aspect of that system or the system as a whole.

    moderating variable (MV) a second independent variable, be- lieved to have a signifi cant contributory or contingent effect on the originally stated IV-DV relationship.

    moderator a trained interviewer used for group interviews such as focus groups.

    monitoring a classifi cation of data collection that includes ob- servation studies and data mining of organizational databases.

    motivated sequence a presentation planning approach that in- volves the ordering of ideas to follow the normal processes of human thinking; motivates an audience to respond to the presenter’s purpose.

    multicollinearity occurs when more than two independent vari- ables are highly correlated.

    multidimensional scale a scale that seeks to simultaneously measure more than one attribute of the participant or object.

    multidimensional scaling (MDS) a scaling technique to simul- taneously measure more than one attribute of the participant or object; results are usually mapped; develops a geometric picture or map of the locations of some objects relative to others on various dimensions or properties; especially useful for diffi cult-to-measure constructs.

    multiphase sampling see double sampling . multiple-choice, multiple-response scale a scale that offers

    the participant multiple options and solicits one or more an- swers (nominal or ordinal data); a.k.a. checklist .

    multiple-choice question a measurement question that offers more than two category responses but seeks a single answer.

    multiple-choice, single-response scale a scale that poses more than two category responses but seeks a single answer, or one that seeks a single rating from a gradation of preference, in- terest, or agreement (nominal or ordinal data); a.k.a. multiple- choice question .

    multiple comparison tests compare group means following the fi nding of a statistically signifi cant F test.

    Key terms indexed at the end of the

    chapter and defi ned in the glossary.

    Glossary reinforces the importance

    of learning the language of

    research.

    Supplements offer the tools students and faculty ask for . . . and more. On the book’s Online Learning Center (www.mhhe.com/

    cooper12e), students will fi nd cases (like this new one) and

    data sets, a research proposal, a sample student project, and

    supplemental material for several chapters, including

    templates for charting data, how the research industry works,

    bibliographic databases searching tips, complex experimental

    designs, test markets, pretesting, and multivariate analysis.

    You’ll also fi nd 34 cases, nine of which are full video cases.

    Also, several written cases have video components included.

    coo21507_fm_i-xxvi.indd xicoo21507_fm_i-xxvi.indd xi 24/01/13 11:41 PM24/01/13 11:41 PM

     

     

    xii

    For undergraduate students just learning about research methods or graduate students advancing their research knowledge, each new edition of Business Research Meth- ods promises—and has continually delivered—not only a teachable textbook but a valued reference for the future. As a mark of its worldwide acceptance as an industry standard, Business Research Methods is available in nine international editions and four languages.

    When you are creating a 12th edition, you don’t want to tinker too much with what has made instructors adopt your textbook for their students or what has prompted research- ers to use it as a valuable shelf reference. But to ignore change in the research environment would be negligent.

    Leading

    We used the 2012 GreenBook Research Industry Trends (GRIT) Report as a starting point for creating the 12th edi- tion. This large study of research suppliers and research clients gave us clear direction on emerging techniques and how the research fi eld was changing. We focused our ef- forts on obtaining examples of these changes and they are included in content throughout the book and in Snapshots and PicProfi les—both contentwise and visually.

    Responsive . . . to Students and Faculty

    Snapshots, PicProfi les, and CloseUps are the way we re- veal what is timely and current in research. We wait until such issues are more mainstream before giving the topic a permanent place within the text. In fact, of the 82 Snap- shots and PicProfi les featured, 35 are completely new and one-half of the CloseUps had major updates. Of these new examples, you will fi nd topics dealing with biometrics, eye tracking via the Web, mobile surveys, online com- munities, listening tours, location-based tracking, talent analytics, incentivizing participants, data visualization, mixed mode surveys, mixed access recruiting, charting, as well as Internet research, cloud computing, using Excel in data analysis and presentation, Smartphone research, dirty data, gut hunches, wildcat surveys, and more. And you’ll discover research stories that relate to such organi- zations or brands as Mercedes-Benz, TNS-Infratest, NTT Communications, Next Generation Market Research, In- teractive Advertising Bureau, Groupon, TrustE, Decipher, Living Social, Troy-Bilt, among numerous others.

    There are currently about 200 images and text art sup- porting our learning objectives; you will discover that over one-quarter are new to this edition. We’ve updated our “From the Headlines” discussion ques tions, covering

    product introductions, employee issues, legal proceed- ings, advertising campaigns, and many more topics and added more research examples to the Instructor’s Manual, for use in class discussions or testing.

    Our book is designed for a one-semester course although under no circumstance is it imagined that the entire book be covered. In an effort to make the book more user friendly yet give faculty members tremendous fl exibility in choosing materials for the theme they set for their course, we have created an Online Learning Center for the text. Analogous to cloud computing, we stored regularly used data on McGraw-Hill’s servers that can be easily accessed through the Internet. Central to that design, we moved ma- terial from chapter appendices to the Online Learning Cen- ter thereby reducing the physical size of the book that our own students often carry with them. Among those items available at the Online Learning Center are How the In- dustry Works, Bibliographic Database Searches, Advanced Bibliographic Searches, Complex Experimental Designs, Test Markets, and Pretesting Options and Discoveries. Since many research methods courses for undergraduates don’t use multivariate statistics, we’ve moved our chap- ter “Multivariate Analysis: An Overview” to the Online Learning Center for the benefi t of graduate students. You’ll also fi nd written and video cases, questionnaires, data sets, a sample student project, and digital support materials re- lated to some of our Snapshots and CloseUps in the Online Learning Center.

    We continue to use chapter and end-of-text appendices for information that, given the differing skills and knowl- edge of their students, instructors may want to emphasize. We retained end-of-chapter appendices related to Craft- ing Effective Measurement Questions and Determining Sample Size, as well as end-of book appendices related to a sample proposal, a focus group guide, non-parametric statistics, and statistical tables.

    Fine-Tuned

    Process Series of Exhibits The core pedagogy of Business Research Methods is based on an understanding that student learners are of three types: visual, auditory, and kinesthetic. These exhibits offer a detailed, graphical map of the research process or a more detailed breakout of each subprocess, perfect for hands-on projects. Each of these exhibits is linked to others in the series with a consistent use of shape and color. You’ll fi nd 32 of these exhibits throughout the text. Changes in process exhibits, other exhibits, and embedded tables resulted in twenty- three major modifi cations using new information, data, or graphs throughout the text.

    >preface

    coo21507_fm_i-xxvi.indd xiicoo21507_fm_i-xxvi.indd xii 24/01/13 11:41 PM24/01/13 11:41 PM

     

     

    >preface xiii

    Online Learning Center There is a wealth of informa- tion, samples, templates, and more in this Web depository.

Case Study 1: W.L. Gore – Culture of Innovation

/in /by

Case Study 1: W.L. Gore – Culture of Innovation (page 555).

After reading the case, answer the following questions:

1. Describe Gore’s global organizational design challenge?

2. What should Gore do to build effective global teams?

3. How will Gore’s culture affect the virtual global teams?

4. What is Gore’s strategy for the 21st century?

In the attached document Gore Case Document is the case that needs to be studied and above questions to be answered.

Case Study Example 1 and Case Study Example 2 are completed and reference documents for understanding.

This case was prepared by Jay Rao, Professor of Technology Operations and Information Management at Babson College, based on published sources. It was developed as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. It is not intended to serve as an endorsement, source of primary data or illustration of effective or ineffective management. Copyright © 2012 Babson College and licensed for publication to Harvard Business Publishing (HBP). All rights reserved. No part of this publication can be reproduced, stored or transmitted in any form or by any means without prior written permission of Babson College.

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W. L. Gore—Culture of Innovation

―Why . . . couldn’t an entire company be designed as a bureaucracy-free zone?‖1

 

This was the thought that enthralled Wilbert (―Bill‖) L. Gore, a chemical engineer at E. I. du Pont de Nemours and Company (DuPont). This thought led him to break out of the traditional management practices and create a company that would cherish human imagination and freedom.

W. L. Gore & Associates, Inc. (referred to as W. L. Gore, or just Gore, in what follows) was founded in 1958. It was a privately held company headquartered in the suburbs of Newark, Delaware. In 2011, it was ranked for the 14th consecutive year among the ―100 Best Companies to Work For‖ by Fortune magazine. Also, for several years in a row, it was named one of the best workplaces in the United Kingdom, Germany, France, and Italy. In recent years, it had appeared in the Sweden and Spain lists as well.2

The voluntary turnover rate at Gore was around 5%—one-third the average rate in its industry (durable goods) and one-fifth that for private firms of similar size.3 In 2012, it had ―more than 9,500 employees, called associates, located in 30 countries worldwide, with manufacturing facilities in the United States, Germany, Scotland, Japan, and China, and sales offices around the world.‖4

1 Gary Hamel with Bill Breen, The Future of Management (Boston: Harvard Business School Press, 2007), p. 85. 2 W. L. Gore & Associates, Inc., ―Working in Our Unique Culture,‖ W. L. Gore & Associates Web site, http://www.gore.com/en_xx/careers/whoweare/ourculture/gore-company-culture.html, accessed March 10, 2012. 3 Rebecca Serwer, ―Creating Competitive Advantage in Today’s Labor Market: Lessons Learned from Three Model Companies‖ (Master of Professional Studies thesis, University of Denver University College, 2008), p. 54. 4 W. L. Gore & Associates, Inc., ―Gore Locations Worldwide,‖ W. L. Gore & Associates Web site, http://www.gore.com/en_xx/aboutus/locations/index.html, accessed March 19, 2012.

 

 

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Though the company did not publish its financials, it had reportedly been profitable every year since its inception, and its revenues were approximately $3 billion.5

When Bill Gore embarked on his dream to create an innovative enterprise over a half century ago, he had a lot of questions:

Could you build a company with no hierarchy—where everyone was free to talk with everyone else? How about a company where there were no bosses, no supervisors, and no vice presidents? Could you let people choose what they wanted to work on, rather than assigning them tasks? Could you create a company with no ―core‖ business, where people would put as much energy into finding the next big thing as they did into milking the last big thing? And could you do all of this while still delivering consistent growth and profitability?6

 

Background and Brief History

In April 1938, Dr. Roy J. Plunkett, a research chemist at DuPont, discovered PTFE (polytetrafluoroethylene resin), which was trademarked under the brand name Teflon.7 Bill Gore, during his 17-year career at DuPont, was assigned several times to small R&D task forces, the last one of which was responsible for finding a meaningful commercial use for Teflon. While they were working on this assignment, another group at DuPont came up with a way to make thermoplastics out of Teflon. Hence, DuPont felt no need for Gore’s group to continue. Gore observed, ―Du Pont felt that [the thermoplastic version of Teflon] was good enough, and our group was dissolved.‖8

Gore believed that DuPont was largely underestimating the potential of this ―slick, waxy fluoropolymer,‖9 so he continued to work on it in his spare time. Gore knew Teflon’s unique properties as an electrical insulator and was trying to coat wire with it. Finally, in the fall of 1957, with help from his son Bob, he succeeded in producing a good ribbon cable by sandwiching wire between Teflon tapes. DuPont, with its traditional business of supplying raw materials, didn’t want to enter the wire business. Nonetheless, it granted Bill Gore permission to start his own company and agreed to provide the required supply of Teflon.10

In 1958, Bill and his wife, Genevieve (‖Vieve‖), both 45 years old, invested their life savings to form W. L. Gore & Associates, which operated from the basement of their home in the suburbs outside of Newark, Delaware. The company’s first product was the Multi-Tet insulated wire and cable. In 1960, Gore received its first major order for 7.5 miles of insulated ribbon cabling from

5 W. L. Gore & Associates, Inc., ―About Gore,‖ W. L. Gore & Associates Web site, http://www.gore.com/en_xx/aboutus/index.html, accessed March 9, 2012. 6 Hamel, p. 86. 7 ―Dr. Roy J. Plunkett, Discoverer of Fluoropolymers,‖ obituary, The Fluoropolymers Division Newsletter, Summer 1994, p. 1, available at http://www.fluoropolymers.org/news/PlunkArt94.pdf, accessed March 10, 2012. 8 Alan G. Robinson and Sam Stern, Corporate Creativity: How Innovation and Improvement Actually Happen (San Francisco: Berrett-Koehler, 1998), p. 177. 9 Hamel, p. 85. 10 Robinson and Stern, pp. 177–178.

 

 

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the Denver Water Company. This required increased manufacturing capacity and prompted the company’s move from the family basement into its first manufacturing plant nearby.11

In 1969, Bob Gore discovered that rapidly stretching PTFE did not break the material but made it strong, highly porous, and extremely versatile. This new polymer, expanded polytetrafluoroethylene (ePTFE), was the first step towards Gore-Tex, the waterproof and breathable fabric that made the company famous. This polymer found its way into shoes, gloves, head gear, and other outdoor adventure wear that was used in expeditions to the North and South poles and Mount Everest.12 In 1981, the spacesuits worn by NASA astronauts on the space shuttle Columbia were made with Gore-Tex fabric.13

By 2011, Gore held more than 2,000 patents worldwide in fields ranging from fabrics, electronics, medical devices (implant biomaterials), consumer products, pharmaceuticals and polymer processing.14 More than 25 million people around the world had Gore’s medical implants. Gore also supplied the most technologically advanced portfolio of Membrane Electrode Assemblies (MEA products) for the fuel cell industry.15 Refer to Exhibit 1 for some other notable events in the history of the company.

Lattice Enterprise; No Hierarchies

―I spend a significant amount of time focusing on the environment at Gore. I’m a firm believer that if you get the environment right, the business stuff is easy.‖ —Terri Kelly, CEO, Gore16

Gore’s mission statement put the culture of the firm ahead of its employees and its products

(Exhibit 2).

While at DuPont, although Bill Gore was part of a much bigger organization, the small, focused teams that he used to work in had innate passion, initiative, and courage. The freewheeling spirit and operational autonomy that drove these small teams energized Gore, and he knew they invigorated his colleagues, too. 17 Further, Bill Gore’s philosophy of management was deeply inspired by two sets of management theory: Abraham Maslow’s hierarchy of Needs, published in 1943, and Douglas McGregor’s 1960 bestseller, The Human Side of Enterprise.18

Maslow suggested that there are five human needs—physiological, safety, belonging, esteem,

and self-actualization—and these needs are in a hierarchical order in the shape of a pyramid. At 11 W. L. Gore & Associates, Inc., ―Our History,‖ W. L. Gore & Associates Web site, http://www.gore.com/timeline/, accessed March 10, 2012. 12 Hamel, p. 85. 13 W. L. Gore & Associates, Inc., ―Our History,‖ W. L. Gore & Associates Web site, http://www.gore.com/timeline/, accessed March 10, 2012. 14 Ibid. 15 W. L. Gore & Associates, Inc., ―About Gore,‖ W. L. Gore & Associates Web site, http://www.gore.com/en_xx/aboutus/index.html, accessed March 10, 2012. 16 Terri Kelly, ―Nurturing a Vibrant Culture to Drive Innovation,‖ talk given on December 9, 2008 at Wong Auditorium, MIT Sloan School of Management, Cambridge, MA, available from MIT World video collection, http://mitworld.mit.edu/video/643, accessed March 9, 2012. 17 Hamel, p. 85. 18 Ibid., p. 86.

 

 

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the base of the pyramid are the most basic physiological needs—food, water, shelter, and

clothing. At the next level of the need pyramid is safety, i.e., security in one’s person, finances, and health. At the next level is belonging, which is about friendship, intimacy, and family. Esteem needs include achievement, confidence, and respect. Finally, at the top of the pyramid is self-actualization, which includes creativity, morality, and problem solving. 19

McGregor challenged the prevailing management beliefs of his time, which he labeled Theory X. According to him, Theory X assumes that the average human being has an inherent dislike of work and will avoid it if possible. Most people need to be forced to put in effort adequate to attain organizational success. By contrast, Theory Y assumes that the average human being finds work a source of satisfaction and will exercise self-direction and self-control in achieving the objectives he or she is committed to.20

These beliefs have been at the core of Gore’s culture since its founding (Exhibit 3). Bill Gore deliberately set up his fledgling firm with the notion that an entire company can be designed to be bureaucracy-free:

The simplicity and order of an authoritarian organization make it an almost irresistible temptation. Yet it is counter to the principles of individual freedom and smothers the creative growth of man. Freedom requires orderly restraint. The restraints imposed by the need for cooperation are minimized with a lattice organization.21 A lattice organization is one that involves direct transactions, self-commitment, natural leadership, and lacks assigned or assumed authority. Every successful organization has a lattice organization that underlies the façade of authoritarian hierarchy. It is through these lattice organizations that things get done, and most of us delight in going around the formal procedures and doing things the straightforward and easy way.22

While W. L. Gore & Associates seemingly had a divisional structure, underneath it was a very

flat lattice organization: ―no traditional organizational charts, no chains of command, nor pre- determined channels of communication.‖23 Each person in the lattice could interact with every other person without an intermediary. All employees were known by the same title, ―Associate.‖ There was no hierarchy of communication. Associates were free to go directly to whoever they believed had an answer.

The lack of a formal organizational chart meant that the associates had to build their own network through personal relationships. It was their personal responsibility to connect and build their own lattice on their own initiative. This heavy emphasis on relationships extended beyond associates to customers, vendors, and surrounding communities. Direct face-to-face communication and phone calls were found to work best in collaborating, building, and maintaining long-term relationships.24 So co-location of facilities and plants was very important

19 Abraham Maslow, ―A Theory of Human Motivation,‖ Psychological Review, 50: 376–390. 20 Douglas McGregor, The Human Side of Enterprise (New York: McGraw-Hill, 1960). 21 ―The Lattice Organization‖ (slide presentation), (Newark, DE: W. L. Gore & Associates, Inc., n.d.), p. 13, available at http://www.boozersclass.org/Gore_lattice.pdf, accessed April 10, 2011. 22 Ibid., p. 2. 23 W. L. Gore & Associates, Inc., ―Our Culture,‖ W. L. Gore & Associates Web site, http://www.gore.com/en_xx/aboutus/culture/index.html, accessed March 10, 2012. 24 W. L. Gore & Associates, Inc., ―Working in Our Unique Culture,‖ W. L. Gore & Associates Web site, http://www.gore.com/en_xx/careers/whoweare/ourculture/gore-company-culture.html, accessed March 19, 2012.

 

 

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for Gore. For instance, there were 15 sites clustered around their headquarters, in Delaware, and 10 plants around Flagstaff, Arizona. This density enhanced both cross-functional and cross-team communication and collaboration.25 Further, most of Gore’s buildings were very un-corporate- like: unassuming, bland, boring, and unimpressive.26

The company had four major divisions: fabrics, electronic products, medical products, and industrial products. It had small, product-focused business units, with all the company-wide support functions to ensure smooth day-to-day operation. No business unit was allowed to grow beyond a certain size and, with only a few exceptions, facility and manufacturing sites were limited to no more than 250 associates. Bill Gore believed that the firm had ―to divide so that you can multiply.‖27 A cluster of small plants in proximity allowed for everyone to know everyone else, have a sense of ―ownership and identity,‖28 as well as accountability for their decisions. This closeness also helped associates to move easily between projects.

Bill Gore was not in favor of manuals or bureaucratic rules for prescribing a fixed solution in any given situation. So, according to Terri Kelly, president and CEO, policy manuals were quite useless, since every situation was different, and they took judgment away from individuals.29 Gore’s associates had the freedom to analyze and come up with their own conclusion as to the best way to deal with different situations. Rather than providing a playbook, the firm used a set of four guiding principles, originally articulated by Bill Gore, to help associates with their decisions and behaviors:

 Freedom: The company was designed to be an organization in which associates can achieve their own goals best by directing their efforts toward the success of the corporation; action is prized; ideas are encouraged; and making mistakes is viewed as part of the creative process. We define freedom as being empowered to encourage each other to grow in knowledge, skill, scope of responsibility, and range of activities. We believe that associates will exceed expectations when given the freedom to do so.

 Fairness: Everyone at Gore sincerely tries to be fair with each other, our suppliers, our customers, and anyone else with whom we do business.

 Commitment: We are not assigned tasks; rather, we each make our own commitments and keep them.

 Waterline: Everyone at Gore consults with other associates before taking actions that might be ―below the waterline‖—causing serious damage to the company. 30

At Gore, a governing metaphor was ―the Gore Ship‖: every ship has a ―waterline.‖ If you

make one bad decision, and that makes a hole in the ship above the waterline, the ship may be damaged, but it will survive and not sink. You can learn from that experience and move on. But if you make a hole below the waterline, the ship could sink.

25 Hamel, p. 93. 26 Alan Deutschman, ―The Fabric of Creativity,‖ Fast Company, December 19, 2007, http://www.fastcompany.com/magazine/89/open_gore.html?page=0%2C1, accessed March 12, 2012. 27 Simon Caulkin, ―Gore-Tex Gets Made Without Managers,‖ The Observer, November 2, 2008, http://www.guardian.co.uk/business/2008/nov/02/gore-tex-textiles-terri-kelly, accessed March 10, 2012. 28 Ibid. 29 Kelly, ―Nurturing a Vibrant Culture.‖ 30 W. L. Gore & Associates, Inc., ―What We Believe,‖ W. L. Gore & Associates Web site, http://www.gore.com/en_xx/careers/whoweare/whatwebelieve/gore-culture.html, accessed March 10, 2012.

 

 

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At most firms, guiding principles tended to be nice displays in entrances and in hallways or brochures. At Gore, the associates had to live them every day, since there were no job descriptions or direct reports.

Leaders, Sponsors, and Associates; No Titles or Bosses

―[Gore] is a tough place to lead.‖31

There were no fixed or assigned authorities at Gore. Even the CEO did not have direct

reports.32 Leaders at Gore focused on decentralization, made working groups cross-functional, and allocated resources. Leaders could not make commitments for others. Extreme freedom and autonomy meant that all associates had to understand their own capabilities and limits, set their own agendas, and make commitments to deliver results. Results were evaluated by their peers.

Hiring was considered a ―waterline‖ decision, so candidates were interviewed by a broad and diverse team. The hiring process was heavily weighted towards a candidate’s fit with the values and the culture, rather than merely a technical fit. Gore hired fiercely motivated people who were able to take initiative, felt free to pursue ideas on their own, communicated effectively, built their own networks, and collaborated to create innovative products. Gore cherished the notion of ―natural leadership.‖33

Natural leadership was defined by followership. It was not possible to be a leader at Gore unless you had followers. No one started as a leader at Gore. Leadership was earned over time. Most often, leaders emerged naturally by demonstrating special knowledge, skill, or experience that advanced business objectives. A leader had to keep re-earning the respect at every step, because teams had the liberty to fire their chief at any time. ―We vote with our feet,‖ [said] Rich Buckingham, a manufacturing leader in Gore’s technical fabrics group. ―If you call a meeting, and people show up, you’re a leader.‖34 A leader who had repeatedly earned such a label was free to use the word ―leader‖ on his or her business card.35

Leadership was defined by one’s ability to influence followers: leadership without authority. Influence was cultivated by building credibility. This required a great deal of preparation, validation, and people skills to marshal the resources, rather than dictation based on authority. This lack of authority also meant that leaders were often required to explain their decisions and actions. As Steve Young, a consumer-marketing expert hired from Vlasic Foods, quickly discovered, ―If you tell anybody what to do here, they’ll never work for you again.‖36

Kelly’s path to becoming CEO, one of the very few titles at Gore, reflects the company’s overall approach to leadership.37 In 1983, Kelly joined Gore as a process engineer. During her early years at Gore, she focused on gaining experience as a product specialist with the then- small military fabrics business unit. She later led the unit and helped it grow into a leading producer of protective products for the armed forces globally. In 1998, Kelly gained recognition

31 Kelly, ―Nurturing a Vibrant Culture.‖ 32 Jeffrey Hollender, ―Inventing the Future of Management: Part IV,‖ JeffreyHollenderPartners: The Next Generation of Business, http://www.jeffreyhollender.com/?p=309, accessed March 10, 2012. 33 Deutschman, ―The Fabric of Creativity,‖ p. C2. 34 Hamel, p. 88. 35 Ibid. 36 Ibid., p. 92. 37 Hamel, p. 88.

 

 

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as part of the leadership team for the global Fabrics Division and helped establish Gore’s first Asian fabrics manufacturing plant, in Shenzhen, China. Concurrently serving on the Enterprise Operations Committee, she also contributed to guiding the company’s strategic direction.38 In 2005, when Chuck Carroll retired as CEO, the management asked associates to choose someone they would be willing to follow. They weren’t given a pre-defined list of names and were free to choose anyone. As Kelly recalled, ―To my surprise, it was me.‖39

Every associate had a personal sponsor, someone who had voluntarily made a commitment to the associate’s development, maximizing his or her contribution to the organization.40 All understood that their job was to make everyone else successful.41 The sponsors helped newcomers with their commitments and in fulfilling what it would take to deliver on them. They guided new recruits in finding a good fit between their skills and the needs of a particular team. During the first few months, a new associate was likely to experience different teams and be audited for a role. As the associates’ commitments and needs changed, they or their sponsors were free to determine whether changes were needed, or even a new sponsor. Similarly, teams could choose whether they wanted to adopt a new member.42 So, if an associate had difficulties finding a sponsor or a team, it was a strong indication that the associate would not be a good fit at Gore.43

One of the primary responsibilities of a sponsor, as a positive advocate, was to collect

360-degree information and feedback regarding the associate’s personal development. This information, gathered from peers and leaders, was then shared with the appropriate compensation committee. Most sponsors were responsible for about five to seven associates. Leaders at Gore had four overarching requirements, centered on ―living the culture‖ (see also Exhibit 4).

Leading Self—Be introspective, determine your capabilities, how your actions could impact the enterprise. Getting it done—Be capable of doing the work, influencing others to get the necessary work done in an appropriate amount of time. Shaping the vision—This differentiates a ―Leader‖ and ―Associate,‖ the ability to shape or define the vision. Leading others—One cannot go it alone and then have the ability to influence others to complete the tasks. Living the culture—Did the leader uphold the values of culture in the process of getting their work done? 44

 

38 Kelly, ―Nurturing a Vibrant Culture.‖ 39 Hamel, p. 89. 40 Ibid. 41 Kelly, ―Nurturing a Vibrant Culture.‖ 42 Hamel, p. 89. 43 Kelly, ―Nurturing a Vibrant Culture.‖ 44 Paraphrased by casewriter from Kelly, ―Nurturing a Vibrant Culture.‖

 

 

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While these requirements described what was expected, certain behaviors did not fit with the culture. Self-promotion, being a ―know-it-all,‖ declaring, ―I am an expert,‖ and displaying a Lone Ranger45 type of behavior were disdained at Gore. It would be evident when an associate did not exhibit the behaviors consistent with the culture. When this happened, the associate’s sponsors and mentors would try to work with the individual to create an action plan to correct these behaviors; otherwise, the parties would look at other options—including voluntary or involuntary termination.

Only Commitments; No Assignments

Associates were responsible to managing their own workload and would be accountable to others on their team. Only the associate could make a commitment to do something—a task, a project, or a new role. Once the commitment was made, the associate was expected to meet it. New associates were regularly cautioned against overextending themselves, and associates could reject any request. But once someone said, ―I will do this,‖ it was considered a near-sacred oath.

Projects and teams were not formed by assignment; rather, a product or project concept was usually formed by an individual, who garnered support to move forward. As the project progressed, project founders—not managers—had to sell their idea to other associates who they felt had the necessary technical, market, and organizational skills to advance the project.

Objectives were set by those who made them happen. This strategy was based on the belief that associates who were allowed to choose which projects to sponsor—by committing their resources—would more likely be motivated, because they would choose projects they believed in and felt they had an ownership stake in their success. Further, small teams with highly motivated associates supporting a project or product concept were more likely to succeed, because they believed in what they were doing. Exhibit 5 highlights this link between associate engagement, autonomous teams, and business success.

Teams were usually quite diverse, consisting of mathematicians, engineers, accountants, machinists, and chemists. All these small, multi-disciplinary and boundary-crossing teams were freewheeling R&D groups who shared two common goals: to make money and have fun. Project teams were usually one-of-a-kind teams. They did not regroup over and over for subsequent projects. The composition of teams was opportunity driven—each one required different types of people with different kinds of expertise.

Anyone Can Be an Innovator; Nerds Are Mavericks

All associates were given free dabble time. They could spend up to 10% of their work hours in pursuing their own purpose.46 When associates joined Gore they wouldn’t have endless freedom; rather, the dabble time had to be earned.47 Associates competed for the discretionary time of other talented individuals who were keen to work on something new and exciting and be

45 Business jargon for going it alone on decisions rather than consulting and including others in setting priorities and objectives. Based on a fictional character of radio and television shows, although the business connotation is a reductionist version of the character’s ethic. See http://en.wikipedia.org/wiki/Lone_Ranger. 46 Deutschman, p. C2. 47 Kelly, ―Nurturing a Vibrant Culture.‖

 

 

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part of promising projects. Assembling a self-motivated team to work on a new idea was, according to Kelly, ―a process of giving away ownership of the idea to people who want to contribute. The project won’t go anywhere if you don’t let people run with it.‖48

As an instance, Dave Myers, an engineer who was principally developing cardiac implants for Gore’s medical products division, used the Gore-Tex polymer to coat his mountain- bike cables as a grit repellent. That dabbling went on to become Gore’s Ride-On line of bike cables. That in turn led to improving the strings that controlled large puppets at Walt Disney World theme parks and Chuck E. Cheese’s restaurants.49 Impressed with the results, Myers continued his experimentation with the concept. He thought that such a coating could be ideal for guitar strings, as it would prevent skin oil buildup on the string and help retain its tonal qualities. Gore’s absence from the music industry and Meyers’s lack of expertise with guitars did not prevent him from spending his dabble time working on the guitar project. Instead, he sought volunteers with knowledge of guitars to help with the R&D. 50

He was joined by Chuck Hebestreit, an engineer and a guitarist, and later by John Spencer, a musician himself. Together, they convinced six other associates to help with the project.51 After three years of informal experimentation, the team thought they had hit a home run with a guitar string that could hold the tone three times longer than traditional ones did. But merchants refused to carry Gore’s $15 Elixir guitar strings. Elixir was priced nearly four times more than the most expensive string on the market in 1996. So Gore went directly to the backstage—the shows and subscriber lists of guitar magazines—and gave away 20,000 samples in the first year.52 The artists were hooked and Elixir quickly became the leading brand of acoustic guitar strings in the United States.53

At any given time, Gore had hundreds of projects at various stages of development.54 While this proliferation could be perceived as chaotic, there was discipline behind it. First, most of the opportunities were clearly rooted in Gore’s deep knowledge and mastery in ePTFE. Applications and adjacencies were explored and filtered using this technology boundary. Almost all of Gore’s thousands of products were based on just that one very versatile polymer (Exhibit 6). Second, ideas died if associates didn’t sign up for projects. Product champions gave the gift of a new opportunity, and in return other associates donated their talent, experience, and commitment. So Gore could be considered as a ―gift economy.‖55 Associates had to ―gift‖ their dabble time and get involved in their colleagues’ projects.

 

48 Hamel, p. 91. 49 Deutschman, p. C2. 50 Hamel, p. 90. 51 Deutschman, p. C2. 52 Deutschman, p. C3. 53 Ann Harrington, ―Who’s Afraid of a New Product? Not W. L. Gore. It Has Mastered the Art of Storming Completely Different Businesses,‖ Fortune, November 10, 2003, available at http://money.cnn.com/magazines/fortune/fortune_archive/2003/11/10/352851/index.htm, accessed March 18, 2012. 54 Ibid. 55 Hamel, p. 91.

 

 

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―Real, Win, Worth‖56

Gore did not care for me-too products. They pursued opportunities that were ―unique and valuable.‖57 Gore aimed for quantum improvements that gave them a highly differentiated positioning in the market place.

The belief at Gore was that it was tough to plan for innovation, but it was possible to organize for it.58 ―We have a methodical way of how we do innovation,‖ according to Kelly.59

At Gore, the journey from dabbling to profitability was guided by three ―reality checks.‖ According to Gore’s former president, Chuck Carroll, ―We go through an exercise called Real, Win, Worth. . . . Is the opportunity real? Is there really somebody out there that will buy this? Can we win? What do the economics look like? Can we make money doing this? Is it unique and valuable? Can we have a sustained advantage [such as a patent]?‖60 Each post-dabble project was scrutinized with periodic cross-functional reviews that required the project to survive these checks.61

Early on, the product champions identified critical hypotheses and tested fundamental assumptions in low-cost ways. The company never invested big until all the key uncertainties were resolved. Associates had a lot of latitude and discretionary time to experiment and test their ideas. But to take the project beyond the dabble stage, the team needed to show that the product opportunity was real. The team had to demonstrate that the opportunity solved a genuine customer problem for which the customer would be willing to pay—usually a premium. This step was crucial in order to attract resources to the project.62 ―It starts with the consumer. If we have a new technology but if it is not matching a consumer need, then it won’t go far,‖ [said] Christy Haywood [product manager from Gore’s fabric division].63

As a project evolved from dabble-time experiment to one that sought formal support, the team prepared to participate in a series of peer reviews in which they were pressed on the fitness of the project. First, did the opportunity create a unique and differentiated product? Did the company get a technological advantage that it could defend? And did Gore have the resources and capabilities to make sure the product would do what the team said it would do?

Purpose, Passion, Persistence, Patience

―Gore has immense patience about the time it takes to get it right and get it to market,‖ says Bob Doak, who leads a Gore plant in Dundee, Scotland. ―If there’s a glimmer of hope, you’re encouraged to keep a project going and see if it could become a big thing.‖64

56 Harrington. 57 Ibid. 58 Hamel, p. 96. 59 Kelly, ―Nurturing a Vibrant Culture.‖ 60 Harrington. 61 Ibid. 62 Hamel, p. 95. 63 Emily Walzer, ―Ingredients for Innovation, ‖ Textile Insight, May/June 2010, p. 18, available at http://www.gore.com/MungoBlobs/861/698/TextileInsightW_L_Gore.pdf, accessed March 18, 2012. 64 Deutschman, p. C4.

 

 

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Project teams self-organized or coalesced around passionate champions. Promising projects got nurtured for as long as they continued to pique the interest of a few associates and were not ―burning through too much cash.‖65 Concepts were given ample time, sometimes even years, to take form, and there were no cut-throat timelines or calendar marks. However, the company often knew when to pull the plug on a project, whether it was a new initiative or a successful business.

For instance, the origin of Glide dental floss dated back to 1971, when Bill Gore tried to use a Gore-Tex fabric ribbon to floss his teeth. For about twenty years, the company wasn’t able to take the product to market, as it could not get health care product companies to adopt its technology or local drug stores to put the product on its shelves. In 1991, John Spencer came up with the idea of promoting the floss as a medical technology product instead of a normal consumer product. He gave away free samples of the floss to dentists, who were impressed with its shred resistance and helped build a strong followership among dental hygienists.66 By 2003, when it sold the dental floss business to Procter & Gamble, Gore had reached dental floss sales of over $45 million in the U.S. market. Chuck Carroll commented on why Gore sold its successful Glide business to P&G: ―To stay in that market long-term, you really need a whole family of health-care products. The Wal-Marts don’t want to buy floss from one guy and toothpaste from another.”67

Freedom to Experiment; No Fear of Failure

Ideas were encouraged, action was prized, and making mistakes was viewed as part of the creative process. There were very low barriers to experimentation, as there was always ready access to equipment and materials. A project failure did not necessarily mean the team failed. Associates were ultimately judged by the success of the entire organization, and the individual’s contribution to the enterprise was evaluated by a thorough 360-degree review process to score and rank the individuals in a team. When a project failed, there was a post-mortem: Was the concept flawed? Were there poor decisions made along the way? Was it a flawed approach to the solution, or was it simply poorly executed? The goal of this post-mortem was to learn from the experiment and to leverage it in other parts of the enterprise. When an initiative was killed, they ―celebrated‖ with beer and Champagne.68

Compensation for associates was based on contribution. It was determined by a committee of leaders with expertise in the functional area. The committee reviewed and rank- ordered the associates on the basis of input from the leaders as well as the associate’s peer group regarding his or her impact and effectiveness.69 Even if projects failed or couldn’t hit targets, contribution was judged on the basis of the associate’s overall impact on the enterprise. For instance, coaching new hires was considered as a significant contribution. To ensure fairness and competitiveness externally, Gore continually compared compensation packages with similar

65

Hamel, p. 95. 66

Lindsay Hunt, “W. L. Gore, MarketBuster,” p. 2, available at http://www.marketbusting.com/casestudies/WL%20Gore.pdf, accessed March 18, 2012. 67

Harrington. 68

Deutschman, p. C3. 69

Hamel, p. 92.

 

 

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firms and rewarded associates accordingly. They were also compensated through stock and profit-sharing programs.70 ―We are all in the same boat.‖71

After one year of employment, all associates were eligible to be owners in the firm. Employees owned nearly 25% of the firm.72 Both risks and rewards were shared, with a commitment to long-term success. Investment decisions were based on long-term payoff. The costs and resources associated with experimentation and research were not looked upon as ―expenses‖ but rather as ―investments.‖73 Associates were encouraged to treat investments as if they were using their own money.

Freedom with Discipline

While there was very little bureaucracy within Gore, it was not as though there was endless freedom. It was not a free-for-all environment. Knowing that distributed leadership could very quickly devolve into chaos, Gore had several sources of ―Key Disciplines‖ (Exhibit 3). Gore had very methodical ways of describing opportunities, leveraging core technologies, evaluating opportunities in terms of business results, demanding peer-review processes, giving associates discretion to explore (earned over time), pursuing rigorous patent protection of its intellectual property, and ensuring sponsors’ personal commitment to the success of associates.74

Culture across Cultures

In 2012, Gore was operating in 30 countries. One would have expected that a strong culture like Gore’s would be quite a challenge to implement in certain countries, especially in Asia. Gore had made sure that there was room for adaptation. For instance, in Korea it was inconceivable not to have business cards with clearly labeled titles. It was critical for communication with customers and business partners, as well as for the associates’ families. So Korean associates had all kinds of fancy titles on their business cards. Yet they very well knew that these titles didn’t mean anything internally, and having them didn’t mean they could behave differently.75

While sub-cultures existed within Gore around the world with subtle differences, some of the fundamental beliefs of Gore were held sacrosanct. According to Kelly, ―The values are the same in Asia. Who doesn’t want to be believed in? Who doesn’t want to feel they can make a huge contribution? Most people want to be part of a team.‖76

Fifty years after its founding, a majority of the core tenets of Bill Gore’s management philosophy were still thriving at W. L. Gore & Associates—not just in the U.S. operations, but in several of its divisions around the world.

70 Dawn Anfuso, ―1999 Optimas Award Profile W. L. Gore and Associates Inc.,‖ Workforce, March 1, 1999, available at http://www.workforce.com/article/19990301/NEWS02/303019952, accessed March 18, 2012. 71 Kelly, ―Nurturing a Vibrant Culture.‖ 72 Anfuso. 73 Kelly, ―Nurturing a Vibrant Culture.‖ 74 Ibid. 75 Kelly, ―Nurturing a Vibrant Culture.‖ 76 Tina Nielsen, ―WL Gore (Company Profile),‖ Director, February 2, 2010, http://www.director.co.uk/magazine/2010/2_Feb/WLGore_63_06.html, accessed April 4, 2012.

 

 

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Exhibit 1 A Few Notable Events in W. L. Gore’s History

 

Year Event

1958 The enterprise’s first product was Multi-Tet insulated wire and cable. Early

associates were paid in part with awards of Gore stock, establishing a tradition

of associate ownership through shareholding.

1960 The company issued its first profit share to associates

1963 The company earned its first patent. U.S. Patent 3,082,292 was issued to Bob

Gore for the “Multiconductor Wiring Strip” known as Multi-Tet cable.

1972 Gore’s annual sales reached $10 million.

1981 Gore fibers were used in space suits in the inaugural space shuttle mission.

1986 Bill Gore died while hiking in Wyoming at age 74. Bob Gore became CEO.

1992 Glide dental floss was introduced nationally.

1997 Elixir guitar strings were introduced.

2000 Chuck Carroll became president and CEO.

2005 Vieve Gore passed away at age 91. Terri Kelly succeeded Chuck Carroll as

president and CEO.

2007 Gore hit the $2 billion sales mark.

Source: Casewriter’s extracts from ―50 Years of Gore History Online,‖ W. L. Gore & Associates Web site, http://www.gore.com/timeline/, accessed March 11, 2012.

 

 

 

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Exhibit 2 The Mission

Nurture a vibrant Culture that engages talented Associates who deliver innovative Products

that create extraordinary value for all of our stakeholders

 

Source: Casewriter, adapted from Terri Kelly, ―Nurturing a Vibrant Culture to Drive Innovation,‖ talk given on December 9, 2008 at Wong Auditorium, MIT Sloan School of Management, Cambridge, MA, available from MIT World video collection, http://mitworld.mit.edu/video/643.

 

 

 

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Exhibit 3 Gore Culture

 

 

Source: Casewriter, adapted from Kelly.

 

 

 

 

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Exhibit 4 Leadership Expectations

 

 

Source: Casewriter, adapted from Kelly.

 

Exhibit 5 Setup for Success

 

 

Source: Casewriter, adapted from Kelly.

 

 

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Exhibit 6 Product Mix: Core Technology as a Common Link

 

Source: Casewriter, adapted from Kelly.