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and trust one another。 They need to be able to accept conflict as a healthy 
reality and work through it to a successful oute。 
Good leadership 
First…class leadership is perhaps the most important characteristic that distinguishes 
winning teams from the also…rans。 However good the constituent 
parts; without leadership a team rapidly disintegrates into a rabble bound 
by li。。le but a pay cheque。 (See later in this chapter for more on leadership。) 
THE BOARD OF DIRECTORS 
One team stands apart from all the others within an organization – the 
board of directors; usually reduced to the title ‘the board’。 Directors in 
major or public panies have a role outside of that of simply heading 
up a function such as production; sales or marketing; though they may 
Organizational Behaviour 131 
perform one of those functions too。 There is o。。en confusion as to where the 
ultimate power rests in a pany; with the directors or the shareholders。 
In private panies they are o。。en one and the same body but in public 
panies; even where family ties remain; they are distinct and separate。 
In law a pany is an entity separate from both its shareholders and 
directors。 According to a pany’s articles of association; some powers 
are exercised by directors; while certain other powers may be reserved 
for the shareholders and exercised at a general meeting。 If the powers 
of management are vested in the directors; then they and they alone can 
exercise these powers。 The only way in which shareholders can control the 
exercise of powers by directors is by altering the articles; or by refusing to 
re…elect the directors of whose actions they disapprove。 Some of a director’s 
duties; responsibilities; and potential liabilities are: 
。 To act in good faith in the interests of the pany; this includes 
carrying out duties diligently and honestly。 
。 Not to carry on the business of the pany with intent to defraud 
creditors or for any fraudulent purpose。 
。 Not knowingly to allow the pany to trade while insolvent; directors 
who do so may have to pay for the debts incurred by the pany 
while insolvent。 
。 Not to deceive shareholders and to appoint auditors to oversee the 
accounting records。 
。 To have regard for the interests of employees in general。 
。 To ply with the requirements of the panies Acts; such as providing 
what is needed in accounting records or filing accounts。 
position of the board 
The board is made up of two types of directors; internal and external; and 
typically the board would exercise major decisions through a number of 
mi。。ees: 
。 Internal directors: Usually headed up by a chairman who runs board 
meetings; a CEO (chief executive officer) or managing director who 
runs the operating business and a number of other directors。 
。 External directors: Known as non…executive directors; they are usually 
people of stature and experience who can act as both a source of wise 
independent advice and a check on any wilder elements on a board。 
Venture Investment Partners Ltd (ventureip。uk) and The 
Independent Director Initiative (independentdirector。uk); 
a joint venture between Ernst & Young and the Institute of Directors; 
have information on the role of non…executive director; as well as being 
132 The Thirty…Day MBA 
potential sources of appointments in smaller panies that might 
appeal to an ambitious; risk…happy MBA。 
。 mi。。ees: The main board mi。。ees are those that oversee remuneration 
(particularly for directors); auditing; social responsibility (and 
‘green’ ma。。ers); mergers and acquisitions; and regulatory affairs。 
PEOPLE 
If structures are the skeleton of an organization; people are its blood and 
guts。 Douglas McGregor; a founding faculty member of MIT’s Sloan School 
of Management; began his management classic The Human Side of Enterprise; 
published in 1960; with the question: ‘What are your assumptions (implicit 
as well as explicit) about the most effective way to manage people?’ This 
seemingly simple question led to a fundamental revolution in management 
thinking。 McGregor went on to claim: ‘The effectiveness of organizations 
could be at least doubled if managers could discover how to tap into the 
unrealized potential present in their workforces。’ 
Finding the right people; keeping them onside; motivating; managing and 
rewarding them are the defining distinctions between the most successful 
organizations and the mediocre。 Over the past 30 years or so; organizations 
have acquired centralized HR (human resources) departments whose 
purpose is to facilitate people issues; as they o。。en quaintly term their work。 
McGregor anticipated their arrival with this pithy quote: 
It is one of the favourite pastimes of management to decide; from within their 
professional ivory tower; what help the field organization needs and then 
to design and develop programs for meeting these needs。 Then it bees 
necessary to get the field organization to accept the help provided。 This is 
normally the role of the Change Manager; to implement the change that noone 
asked for or wants。 
None of this is to suggest that HR departments can’t contribute to helping 
with ‘people issues’。 It’s just that people issues are too important to exclude 
their immediate superiors from。 At the very least; MBA skills include 
a sound grasp of the key tasks that the HR department is charged with 
performing。 
Recruitment and selection 
Taking on new employees is o。。en a more expensive exercise than buying 
a major item of machinery or a heavy goods vehicle。 If that sounds improbable; 
just check out the figures; the advertising for a middle…ranking 
executive on a salary of; say; £40;000 may well cost £6;000。 If they are taken 
on using a recruitment consultant you can expect a bill of around a fi。。h of 
Organizational Behaviour 133 
the first year’s pay (£8;000)。 Three days’ interviewing; psychometric testing; 
preparing a contract of employment; perhaps paying a share of the 
new employee’s removal expenses will bring the total bill up to around 
£20;000。 If you get the wrong candidate; and there is a good chance of that 
happening if you fail with any element of the recruitment process; then you 
may have to double that figure。 Then; of course; there is the cost of not getting 
the job done that you were recruiting for in the first place。 
These are the key stages in the recruitment process。 
Writing the job description 
O。。en employers draw up the job description a。。er they have found the 
candidate。 This is a mistake; having it from the outset narrows down your 
search for suitable candidates; focuses you on specific search methods 
BEBO 
Michael Birch had what might be seen as six dummy runs before cofounding 
Bebo。 He was a pioneer in the social networking site world; 
starting up Ringo back in 2003; selling it on quickly – with the benefit 
of hindsight perhaps too quickly。 Operating out of a 120 sq ft office in 
the suburbs of San Francisco; overwhelmed with the initial site traffic 
and lacking finance; they sold Ringo within six months。 
Birch and his wife Xochi met up while studying physics at Imperial 
College; London。 After a six…year slog at Zurich Insurance in puter 
programming he left; frustrated by the overly bureaucratic environment; 
a lesson in organizational behaviour that he was to apply to advantage 
in future ventures。 The Birches then started out on their path as serial 
entrepreneurs。 Their first three dot start…ups were unsuccessful; but 
then their luck changed。 BirthdayAlarm; initially a simple alert 
service that evolved into an e…cards business; was followed by Ringo; 
whose sale gave them some cash to roll on to a more substantial 
venture。 Applying everything they had learnt from Ringo and what 
wasn’t working on MySpace; the Birches aimed Bebo squarely at the 
thirty…something age group; but rapidly refocused on teenagers; the 
site’s early adopters。 
Within two years of starting; Bebo became the most visited social 
networking site from within the UK; attracting 10。6 million unique visitors; 
an increase of 63 per cent over the start of the year; ahead of Myspace。 
; with j

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