Peters & Waterman: In Search of Excellence

Question 1

What did the excellent companies survey find?

Answer 1

Virtually all of the better performing companies had a well-defined set of guiding beliefs.

Less well performing institutions had:
No set of coherent beliefs & Financial objectives e.g. Earnings per Share (Only motivated the top % of people, not employees lower down)

Question 2

Through what means are values transmitted (in reference to Selznick, 1957)?

Answer 2

• Values are not transmitted through formal written procedures but diffuse by softer means -e.g. stories, myths, legends and metaphors.

Question 3

What differs between the value-shaping leader and the value-shaping manager?

Answer 3

• Value-shaping leaders are concerned with visions that generate excitement and enthusiasm for everyone in the organisation.
• Value-shaping managers have attention to detail in the and persistence in being visible in the organisation e.g. by walking around in the organisation and spending time with juniors.

Question 4

Does performance of excellent companies post 1982 agree or contradict Peters and Waterman’s claims?

Answer 4

• Some contradictions, companies such as Dana, filed for bankruptcy in 2006 but some companies like Boeing are still performing well (until 737 Max…?)

Question 5

What is the hands on-value driven style of management?

Answer 5

The explicit attention organisations place on value systems. Leaders instil value systems which creates an environment were all employees have the same set of core values and beliefs.

Question 6

What final correlation do Peters and Waterman find between excellent companies? Hint – HP managers were evaluated by a similar concept.

Answer 6

The extent to which leaders unleash excitement. HP managers were evaluated in terms of their ability to create enthusiasm.

Question 7

What do Peters and Waterman use to support their conclusion that senior managers need to be homogenous?

Answer 7

United Airlines CEO Ed Carlson: Travelled 100,000 air miles each year and insisted the top 15% of employees do the same.

· Enabled the top 15% to show their faces to the rest of the company and become approachable.

· Homogeneity reinforced through regular meetings – Delta Airlines all senior staff meet informally every day.

Question 8

What main critiques did Daniel Carroll (1983) have of Peters and Waterman (1982)?

Answer 8

Huge issue of sampling bias with the dependant variable – correlations were found between sampled companies but how were companies selected to be in the sample?

· How do succesful companies compare with unsuccessful companies?

· Too reliant on secondary sources. Anecdotal examples used throughout to support claims.

· Too reliant on American companies, lack of European, Japanese (etc) companies.

· Do Peters and Waterman actually add to the management field or are they attempting to sell books? Mckinsey backgrounds

Question 9

What problem arises with homogeneity in upper management?

Answer 9

‘Yes’ man syndrome – any idea by senior management are encouraged and no suggestions of improvement are offered which may result in conflict.

· But, ‘yes’ man syndrome inspires confidence in leaders.

Question 10

What are the three common beliefs in excellent companies?

Answer 10

· Sourcing opportunities for innovation from every person in an organisation

· Supporting failure/making mistakes and learning from them

· Creating an informal environment to foster communication