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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