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VOLUME 9, NUMBER 1
SPRING 2015
Jou r nal of t h e N ort h A me r ic a n
M anag e me n t Soci e t y
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Factors Affecting Acceptance of Organizational
Change: A Qualitative Analysis in the
Pharmaceutical Industry
Jennifer Bullerdick, Erin Fluegge-Woolf, &
Kenneth A. Heischmidt
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Journal of North American Management Society, Spring 2015
FACTORS AFFECTING ACCEPTANCE OF
ORGANIZATIONAL CHANGE:
A QUALITATIVE ANALYSIS IN THE PHARMACEUTICAL
INDUSTRY
Jennifer Bullerdick, Erin Fluegge-Woolf, and Kenneth A. Heischmidt
Southeast Missouri State University
This exploratory qualitative study examines the relationships between organizational change factors including the
occurrence of change, personal and work related barriers, and employee buy-in. The sample consisted of 20
individuals from seven different departments of a pharmaceutical products manufacturing firm that had recently
undergone a major organizational change that impacted the entire workforce. Research questions were formed to
examine the acceptance of organizational change, the perceived occurrence of organizational change, as well as
personal and work force barriers. Results from the interviews suggest that the occurrence of change as well as
personal and workforce barriers contributed to the participants’ acceptance levels towards change. These findings
suggest that it is vital for organizations to understand factors that relate to employees’ willingness to accept change.
Key Terms: Organizational Change, Pharmaceutical Manufacturing, Acceptance of Change
Change is perhaps the only constant in life and business. Organizations that support and implement
continuous and transformational change remain competitive and this is vital for long-term success
(Cohen, 1999). Organizations must be able to effectively implement the internal changes that expand
their goals and improve the way they do business. However, a variety of research indicates that the actual
failure rate of all organizational change initiatives is about 50-85% (Strebel, 1996; Reynolds, 1994).
Change initiatives fail not for lack of need or technical excellence, but may fail for multiple reasons
including underestimating the effect that a change has on people, and not realizing that people are the
ones who exert the actual change and determine the final outcome. Organizational change is about
making alterations to the organization's purpose, culture, structure, and processes in response to seen or
anticipated changes in the environment. Strategic management of change is all about identifying and
embedding in the organization those changes that will ensure the long-term survival of the organization.
Change is pervasive in our society and a fact of life in organizations (Goodfellow, 1985). Change is
about survival and is vital in today’s competitive environment.
In a study that included 40 “major” change initiatives, the results indicated that 58% failed and 20%
realized less than a third of their anticipated value (LaClair & Rao, 2002). Studies have shown successful
implementation of change (Briody, Pester, & Trotter, 2012) while other studies of various change efforts
have reported failure rates ranging from one-third to two-thirds (Beer & Nohria, 2000; Bibler, 1989) and
have reached levels as high as 80-90 percent (Cope, 2003). According to Strebel (1996) “Change
management isn’t working as it should. In a telling statistic, leading practitioners report that success rates
in Fortune 1,000 companies are well below 50%; some say they are as low as 20%” (p. 86). Although
companies look for enthusiasm, acceptance, and commitment (Nafel, 2014) from their employees, they
often receive much less. In actuality, their communication is staggered, implementation plans fall off
schedule, and overall results fail. Strebel (1996) suggests “This happens often enough that we have to ask
why, and how we can avoid these failures” (p, 86).
2 Journal of the North American Management Society
Bullerdick, Fluegge-Woolf, & Heischmidt
The overall purpose of this exploratory research was to examine the impact of personal and work force
barriers on the acceptance of organizational change as well as the occurrence of organizational change.
Additionally, this qualitative analysis investigates which factors, if any, affect the level of employee buyin individuals put forth to the organizational change. Specifically, factors such as occurrence of change,
personal and work barriers are investigated with respect to employee buy-in to organizational change.
The rationale for conducting qualitative research is to gain a better understanding of the true relationship
and impact of the participant’s responses. Thus, qualitative interviews were used to probe a significant
understanding of the interplay of these organizational change factors.
REVIEW OF RELATED LITERATURE
Research regarding organizational change is abundant. Research exists relating to the importance of
employee buy-in relative to the successful implementation of organizational change, how change impacts
an employee’s commitment to the organization, as well as how employees react to change. In addition,
studies have been conducted to determine the most feasible approach to implementing change within
various organizations. Previous literature encompasses the examination of an organization’s strategic
adaptation to environment changes (Kotter & Schlesinger, 1979; Romanelli & Tushman, 1994), and
includes appropriate processes and procedures used for implementing change within an organization
(Quirke, 1996; Schweigher & DeNisi, 1991; Miller, Johnson, & Grau, 1994). Latuch and Young (2011)
discuss perceptions toward change by young professionals. Paraschiv, Nemoianu, Langa, and Szabo
(2012) studied organizational change and corporate sustainability. A study by Fuchs (2011) discusses the
impact of management identification on perceived organizational justice and change-oriented behavior.
In addition, one study has shown the success of organizational change is dependent on the attitudes and
behaviors of the employees of the organization (Herold & Caldwell, 2002).
The majority of previous research follows an organizational (macro) perspective, rather than looking at it
from an individual’s point of view (Fedor & Herold, 2004). Although numerous studies are available
within the topic they do not seem to address the issue from an individual’s perspective. Why do
employees react to change? What factors contribute or deter their acceptance of change? This area is still
somewhat unknown, including how individuals perceive change, how their perceptions are affected due to
the type of change being implemented, and how other factors including the external environment
determine their ultimate responses to change (Fedor & Herold, 2004).
The information gathered from this study will help organizations understand how these factors contribute
or deter participation in organizational change and will therefore assist them in understanding their
employees, relating to them, and consequently implement more feasible courses of action that are
complimentary to their staff. Resistance to change is natural. However, by understanding these
components, an organization can work around them in order to focus on positive facets of the change, and
rally everyone together to focus on the big picture – succeeding in the implementation of organizational
change initiatives.
Managing Organizational Change
Change is a constant factor within today’s organizations. Organizations are not usually faced with the
option of whether or not to implement change. They are most likely subjected to external elements, such
as competitive pressures, economic or financial issues, and government regulations that create a situation
in which change is necessary for the survival of the overall organization. When this occurs, organizations
need to be able to respond quickly, which means they need to have the most appropriate and feasible
strategy necessary to ensure a successful implementation of such changes. Without such a plan,
individuals can begin to feel powerless and cautious, which is transferred into their resistance to the
change, and essentially resulting in chaos.
Acceptance of Organizational Change
Spring 2015, 3
Whether change is from mergers, acquisitions, outsourcing, downsizing, or restructuring, an organization
is not able to successfully implement the changes or meet their goals and objectives without support from
their employees. A study by the Conference Board of Canada found that “66 percent of organizations that
completed restructuring initiatives showed no immediate increase in productivity, more than 50 percent
realized no short-term profit improvement, and only 30 percent actually lowered costs” (St. Amour, 2001,
p. 22). Unfortunately these results may be typical among organizations who attempt to implement change
by focusing on factors such as processes, financial perspectives, and structure. In order for organizations
to effectively implement change they must determine the most appropriate strategy that embraces their
employees and focus their efforts in valuing, respecting, and communicating with them (St. Amour,
2001).
Managing change is one of the most common issues organizations are being faced with. This is an
ongoing problem which has yet to be resolved despite numerous attempts. Previous research has
examined the fundamentals of change and attempted to explain why successful implementation of change
is so difficult to achieve as well as providing numerous models and explanations have been developed to
aid organizations along the process of change (Beer, 1980, Bibler, 1989, Gagnon, et al, 2008, Kotler &
Schlesinger, 1979, Nord & Jermier, 1994). However, despite the variety of perspectives, theories,
models, and multi-step approaches, successful change initiatives are rare. Leaders lack a clear
understanding of change, the necessary components needed to manage change effectively, or the ability to
successfully engage organizational members in change initiatives (Armenakis & Harris, 2002). They are
unable to recognize or respond to individual needs during change, which contributes to the majority of
failures (Shook, Priem, & McGee, 2003). A previous study revealed how individuals were managed was
a significant motivating factor and ultimately molded their support towards management (Hebda, Vojak,
Griffin, & Price, 2007).
In order for organizations to effectively compete, it is crucial that they be able to adjust to issues
accordingly and make the necessary changes. Organizations must be able to evolve and change at a rapid
pace. However, the level of resistance that employees put forth, or the level of participation/ buy-in they
have, can be a determining factor of whether the change initiatives are actually successful. “Unless
managers define new terms and persuade employees to accept them, it is unrealistic for managers to
expect employees to fully buy into changes that alter the status quo” (Strebel, 1996, p. 87). For change
initiatives to be effective, they must be collectively owned, engineered, and implemented by all within the
organization. To achieve this, individuals that are facilitating the change must be motivated to do so. The
key is to understand what actually motivates the people in the organization to adopt the necessary change.
Noble and Mokwa (1999) identified implementation success as a primary outcome of commitment to a
strategy and defined it as “the extent to which an implementation effort is considered successful by the
organization” (p. 60). Implementation can be effective only when employees are committed (Paton &
McCalman, 2000). In fact, Conner and Patterson (1982) suggested the lack of employee commitment as the
most prevalent factor contributing to failed change projects. The inability or resistance of individual
employees to commit to a strategy and adopt the necessary behaviors for accomplishment of strategic
objectives often result in the failure of change relating to new strategies and strategic innovation
(Heracleous & Barrett, 2001).
Steps can be put in place to align the implementation efforts to coincide with the dynamics of the
workplace. Organizations can utilize change management as a way to effectively deliver on these factors.
Change management may be described as a set of processes, tools and practices used to manage the
people side of change. Change management connects the implementation of a solution with the
realization of the benefits associated with the change (Hiatt, 2006). In order for effective change
management to occur in any organization, employee buy-in and understanding is critical. By building
support and helping an organization’s employees understand why the change is occurring, and what is to
4 Journal of the North American Management Society
Bullerdick, Fluegge-Woolf, & Heischmidt
be gained from it, management can be assured a much greater success rate. However, just because it has
been determined that a process is needed, it does not necessarily indicate the best approach or strategic
design the change management efforts should include.
Resistance to Organizational Change
Findings indicate that support is a crucial and determining factor that is directly responsible for the
success of various facets of the business, including change initiatives (Cropanzano, Howes, Grandey, &
Toth, 1997). Since employees very often resist change efforts (Kotter & Schlesinger, 1979; Strebel,
1996), support should be addressed as an important underlying barrier to planned organizational change
(Watt & Piotrowski, 2008). Researchers have begun to include other elements such as crisis, politics, and
conflict in change models because resistance to change is so pervasive in planned change efforts
(Reynolds, 1994; Rowley, Lujan, & Dolence, 1997; Simsek & Louis, 1994). One example that reflects
these factors is Reynolds’ (1994) model for change. This particular model includes four stages of change:
denial, resistance, exploration, and commitment, and is pictured below in Figure 1.
FIGURE 1: MODEL FOR CHANGE (REYNOLDS, 1994)
Reynolds (1994) suggests that during the first two stages, denial and resistance, employees typically have
increased levels of tension and anger, translating into heightened levels of pandemonium in the
workplace. Once employees transition to the third stage, exploration, Reynolds (1994) indicates that the
movement towards change begins. At this point, organizations should focus on providing open
communication, relaying the overall vision, and focusing on relationships of trust (Reynolds, 1994). “It
appears that institutional readiness for change is inversely related to the resistance experienced during the
transformation effort. Reynolds also points out that once individuals move beyond the denial and
resistance phases, there is usually a great burst of energy and activity among institutional members”
(Keup, Walker, Astin, & Lindholm, 2001, P 4).
Wanberg and Banas (2000) suggest that the enlistment of employee participation and input in the change
process increases performance and commitment, and reduces resistance to change. The preceding
supports the argument that employee participation is a central component in the buy-in process for a
Acceptance of Organizational Change
Spring 2015, 5
change initiative. However, it does not determine “why” this is the case. Although the result of the study
is interesting, it does not indicate whether the individual’s personality was a contributory factor
explaining why the employee preferred to participate in such initiatives. It is likely that the participants
fell within certain personality characteristics, which could explain their need for involvement, which is
correlated to a high level of employee buy-in and commitment to change.
Nord and Jermier (1994) argue that “resistance” is often used as part of an agenda that could overshadow
employees’ actual reason for objecting to change. Nord and Jermier (1994) suggest that management
should not ‘‘resist resistance’’ and abandon the concept, but instead try to better address the employees’
subjective experiences in order to obtain a more valid understanding of why the resistance has developed.
Additional research regarding this topic suggests that resistance involves a collection of an employee’s
feelings, behaviors, and thoughts about the change. Here resistance is viewed as a multidimensional
attitude towards change, comprising affective, cognitive, and behavioral components, to capture the true
complexity of this phenomenon (Piderit, 2000; Oreg, 2003).
Factors Affecting Employee Buy-In
All changing organizations struggle with issues related to their staff. The majority of attention in an
organization is typically concerned with structure, processes, tools, measurements, policies and
procedures. However, for transition to be successful, people need to “buy-in” and be committed
throughout the implementation stages. Trader-Leigh (2002) argued that buy-in is comprised of several
variables, some of the most prominent being beneficial, rewards, goal agreement, and capacity for
additional work. Employees wanted to see at least some of their self interests being met by the change in
order to buy-in to the change initiative. However, to know if these interests are being met, one must first
identify what those interests are and how their employees perceive them in relation to other factors being
present. A deeper understanding can be made to ensure that organizations highlight or structure their
plans to align with factors their employees determine as the most valuable components to gain their full
participation and buy-in.
An employee's relationship to the organization shapes his or her interpretation of its actions (Rousseau,
During planned change, the quality of employment relationships plays an important role in
promoting employee acceptance and involvement (Pfeffer, 1994). Organizations are beginning to
understand the value of intra-organizational relationships (Menon, Bharadwaj, & Howell, 1996). The
quality of these complex relationships affects the overall health and well-being of the organization, but is
also an underlying contributing factor to knowing the employees and understanding how they perceive the
functionality of change. Managers should aim to create relationship commitment, trust, and satisfaction
among their employees. Employees who have quality relationships with their managers typically feel
more desire and duty to support an organizational change (Parish, Cadwallader, & Busch, 2008).
Therefore, the means to success in implementing change initiatives include choosing the right strategies
and effectively implementing those (Zeithaml, Bitner, & Gwinner, 2005). A key to effective implementation
appears to be in the understanding of an employee’s internal desire (Parish et al, 2008).
1995).
By focusing on the suggests above, organizations can use this strategic knowledge to determine what is
perceived as “most valuable” to their employees and structure their change strategies to encompass these
desires. The strategic implementation process requires establishing a common body of strategic
knowledge (Gagnon, Jansen & Michael, 2008). Strategic knowledge is a necessary precondition for
effectively committing to the organization's strategic goals. Although not all knowledge gained will lead
to commitment, organizations can view these circumstances about their strategic initiatives that result in a
decrease of commitment and negative implications to redesign their efforts to ensure proper
implementation. Gagnon, Jansen, and Judd (2008), suggest strategically committed individuals are
6 Journal of the North American Management Society
Bullerdick, Fluegge-Woolf, & Heischmidt
predisposed to engage in strategic-supportive behavior, and development of individual commitment to
strategic initiatives is likely to assist the enactment of strategic transformation.
Research Questions
This research study includes an analysis of various factors relating to personal, work barriers and the
occurrence of change in order to determine if these factors have a direct correlation to an employee’s
acceptance of change. By understanding the underlying relationships, an organization can appropriately
structure their strategies of change to better cater towards their employees in an effort to achieve
successful implementation. The results will be beneficial in that the findings, regardless of the outcome,
will help organizations in their implementation process for future change initiatives. A qualitative
research approach is used to investigate factors affecting the acceptance of organizational change relative
to the following two research questions:
Research Question 1: How does the occurrence of current changes within an individual’s life
describe the individual’s willingness to accept organizational change?
Research Question 2: How do barriers relating to personal and work-life contribute to, or influence,
the acceptance levels of an individual towards organizational change?
METHODS
Sample
The sample consisted of 20 employees at a pharmaceutical products manufacturer located within a large
metropolitan area in the Midwest. The company had recently faced major organizational change
throughout the entire workforce and all subsequent departments, and was therefore designated as an
appropriate venue to gather participant information and responses. A probability sample selection, from
selected departments, was used for selecting individuals to interviews so a wide variety of operational
areas were included in the sample. The participants in the sample were selected randomly from
representative departments after consultation with the office of human resources and used a probability
sampling procedure within each selected representative department, thus the student used a sampling of
the broader population within the organization that had experienced at least one important change within
the organization. A total of 20 interviews were completed over a two month period which was
appropriate given the limited resources of the interviewer/researcher. This sample size is appropriate
given the exploratory nature of this research. The majority of the sample was female (55%). Level of
responsibility consisted of 25% being classified as Upper Management (5 participants), 45% as Middle
Management (9 participants), and 30% as Lower Management (6 participants). Age of the participants
included 15% in their 20s (3 participants), 50% in their 30s (10 participants), 30% in their 40s (6
participants), and 5% in their 50s (1 participant). Participants represented a total of seven different
departments, as depicted in Table 1 below.
Procedure
All interviews were conducted on the company campus of a health products manufacturer located in the
Midwest that employed these participants. Each interview was held in the privacy of a reserved
conference room to insure confidentiality of responses. The interview focused on collecting primary
research through face-to-face, in-person interaction with the 20 consenting participants. The duration of
each interview was 30-45 minutes and each interview session was tape recorded for additional analysis as
needed. During the interview, the individuals were asked a standard set of questions to help gain a better
understanding of their feelings towards the selected personal and work-related barriers, as well as their
Acceptance of Organizational Change
Spring 2015, 7
rationale of why they do, or do not, accept change well, in both a work and personal setting. Interview
protocol is shown in Appendix A.
TABLE 1: PROBABILITY SAMPLING – DEPARTMENTS AND NUMBER OF
PARTICIPANTS.
Departments in Sample
Participants
Generic Drug Subsidiary
3
Branded Drug Subsidiary
3
Sales Representatives
2
Finance
2
Customer Service
2
QA/QC
2
Manufacturing/Production
6
Total = 7 Departments
20 Individuals
RESULTS
Occurrence of Change
The occurrence of change can influence an individual’s acceptance levels of future change. The results
indicated that 100% of the participants believe that this factor in some manner plays a contributory role in
how they perceive or respond to additional changes that occur (research question 1). All participants
within this study had experienced at a minimum one high impact change relative to the organization,
which was taken into consideration upon population and sampling selection. The more an individual
experiences change, the more versatile they may be in relation to future changes. Forty percent of the
participants felt that the more change an individual encounters results in a higher comfort level with
managing additional change. However, an increased level of occurrences of change can also create a
sense of “being overwhelmed” or cause “instability” which could lower acceptance levels of additional
change, which 60% of the participants felt was most likely the case. Regardless if the results are positive
or negative, the findings indicate that the occurrence of change does directly contribute to the levels of
acceptance to some degree.
The participants indicated that the occurrence of changes, primarily those of high impact, heightened their
awareness of other occurring changes that would not normally have played an substantial role in their
lives. For example, one individual indicated that smaller occurrences of change, such as last minute
scheduled activities or increased work load would not typically be stressful changes. However, given the
recent activities of various changes, additional changes along with their impact level seemed to add
additional unnecessary pressure. A quote from a participant illustrates this phenomenon:
“The occurrence of change does affect my acceptance level, but impact of those changes is what
influences me the most. Either several medium to low impact occurrences or one high impact
occurrence can play a tremendous part in how I react. I feel a combination of both occurrence and
impact levels are therefore relevant.”
8 Journal of the North American Management Society
Bullerdick, Fluegge-Woolf, & Heischmidt
Many of the participants had not only undergone the one high impact change that occurred companywide, but also experienced numerous other types of change and in a variety of impact levels within the
last year. Details surrounding specifics to the changes were not disclosed, however, the number of
occurrences of change they had undergone and the impact level associated with each change was tracked
for analysis purposes. The findings from this indicate that the participant responses have a diversified
experience not only in the amount of change they have encountered, but also the varying level of impact
which is expected to aid in the understanding of such occurrences.
Personal and Work-Related Barriers
Barriers related to an individual’s personal life, as well as barriers that are work-related, may have a
significant influence on the individuals acceptance of change. Personal barriers, which included finances
or relationship issues, were seen as being a substantial influence towards an individual’s acceptance level
regarding organizational change (research question 2). Following are several quotes from participants
indicating their thoughts on these barriers:
“Personal barriers, such as financial issues or relationship issues, would influence how I accept
change. The more stable my personal life, the more comfortable I would be in general which
would relay to how I react to additional conflict or external situations.”
“Barriers within my personal life often make dealing with change more difficult. Sometimes the
simplest issues or situations can be magnified out of proportion when coupled with other
emotional turbulences.”
“Although I enjoy my work, my personal life takes precedence. When personal barriers are at a
minimum I am able to be more open to change within the workplace. It is more likely that my
personal life would affect my work than my work to affect my personal life.”
“Personal barriers are more significant to me since I am more emotional involved – I have more at
stake. For instance, regarding the recent downsizing, my reaction to the change was primarily led
by my finances. I am fortunate to have an adequate savings which allowed me to not be as
stressed over the situation compared to others that were vocal about being financially
handicapped.”
The participants’ responses indicate that barriers pertaining to an individual’s personal life has a greater
impact on their level of acceptance regarding organizational change, more so than barriers related to the
actual work-related change that is occurring within the workplace. Results show that the majority of the
participants were influenced more by personal barriers than those that were work-related. Work-related
barriers were classified into four pre-determined sections, including management, communication,
involvement, and types of change. All have been discussed in previous literature and are shown to affect
the implementation of successful organizational change. Of the participants used within this study, the
majority viewed the type of change to be the contributing factor on how they accepted organizational
change. Communication and management, which were both closely rated, seemed to be critical factors,
but the style and importance of each were relative to the type of change that was being implemented.
DISCUSSION
In this study, relationships between associated factors and individual’s acceptance of organizational
change were analyzed. The research questions regarding the occurrence of change with personal and
work-related barriers were analyzed. Bringselius (2014) suggested a framework for addressing
management responses to organizational change. The findings within this qualitative analysis provide
some understanding factors that may affect employee’s acceptance of organizational change initiatives.
There was evidence that occurrence of change impacted how participants responded to additional change.
Acceptance of Organizational Change
Spring 2015, 9
In fact changes that occurred within the workplace, when respondents viewed their having minimal to no
control, seemed to create an increase in anxiety and tension for the respondents. All respondents felt that
the occurrence of change that they had recently undergone, which was defined as occurring within the last
12 months, directly affected their comfort level with change.
In addition to the occurrence of change, the participants all felt that the associated level of impact
regarding these changes played a contributing factor to their acceptance of additional change. In fact, the
level of impact seemed to have, in most cases, an increased concern among the participants regarding
their emotional state and their level of acceptance towards change. Based on these findings, the impact
level of the changes that occurred were found to be a critical factor on the individuals’ comfort level
regarding change, especially relating to organizational change in which they typically would have
minimal control of the circumstances.
Barriers that existed within their personal lives and the workplace also created an environment that
contributed to the participants’ acceptance levels towards change. Overall, both personal and workrelated barriers influence the levels of acceptance an individual had regarding organizational change. The
findings concluded that although both were relevant, personal barriers were much more significant.
Personal barriers varied amongst the participants, but were primarily related to finances and personal
relationships.
Limitations
Despite the efforts put forth, there are certain limitations within the sampling process that should be taken
into consideration when interpreting the results. The sample that was identified in this study was limited
in size, referenced only one type of industry (pharmaceutical) and included participants from only one
company. The population for this study was restricted to one pharmaceutical company located in a large
metropolitan area that had recently undergone high impact levels of organizational change. Generalizing
these exploratory results to other industries and/or companies may not necessarily be feasible. Another
limitation was that the organization had undergone dramatic levels of organizational change in the form
of significant downsizing within the previous year. The occurrence of this situation could lead to an
overly sensitive outcome of responses and limit individuals from responding in a manner that is more
reflective of their personality and feelings towards specific questions on the personality evaluation as well
as during the interview. Additional studies would be beneficial to determine accuracy of their responses
and to ensure consistency in analysis.
Future Research
Future studies could use these results along with additional quantitative and/or qualitative research to
determine specific emotional and physical barriers that affect individuals and associate the appropriate
level of impact those barriers have on the implementation of change. Additional research can also
incorporate specific geographical areas or specific age categories to help determine if these factors also
play a crucial role in an individual’s acceptance level of change. The relationship between personal
barriers and their influence on participant’s acceptance of organizational change is a rich area for
investigation of this topic in future studies. Results may also prove to be structured differently based on
the type of organizations that the individual contributes to, such as for-profit organizations versus nonprofit organizations.
Conclusion
For organizations to be successful on a long-term perspective, it is essential they determine the most
effective means of implementing change amongst their employees. To combat resistance, organizations
10 Journal of the North American Management Society
Bullerdick, Fluegge-Woolf, & Heischmidt
must focus on the individualized perspective and design their change implementation efforts in a manner
that is feasible. Focusing on factors relative to the occurrence and impact of change they have recently
experienced, and various personal and work-related barriers, organizations can structure the framework of
their change appropriately. Understanding the actual employees and implementing a strategy that fits
within the organization’s dynamics is necessary. By focusing on factors pertaining to the individual, an
organization is more likely to increase the level of acceptance, regardless of the type of change that being
implemented, and is able to effectively transition their organization for success.
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APPENDIX A
INTERVIEW PROTOCOL
1. How does the occurrence of current changes within an individual’s life describe the individual’s
willingness to accept organizational change?
•
How do you generally accept change in your life – Personal Change and Work Change?
•
Describe 1-2 changes you have experienced either within the last 12 months.
•
Exploring those changes, how did you react to the change? (Interviewer to select 1-2 changes
based on previous response.)
•
How has that change influenced your openness of future change?
•
When multiple changes are occurring in your life within a short period (3 months, 6 months, and
12 months) of time how does that affect your acceptance of additional change?
2. How do barriers relating to personal and work-life contribute to, or influence, the acceptance
levels of an individual’s towards organizational change?
•
Do you feel that barriers within your personal life contribute to how you react to change? How
has it impacted your reaction to “insert change”? (Change to be selected from previously
discussed occurrence).
•
Describe two personal barriers that exist within an individual’s life that could their acceptance of
organizational change? How do these influence their reaction to change?
•
In exploring various work-related barriers regarding the implementation of organizational change,
which of the following do you feel has the biggest influence towards acceptance levels? Why?
•
Explain how you feel barriers influence an individual’s reaction to change regarding low level
changes and high level changes?
•
Which do you feel plays a greater role in the acceptance of organizational change: an individual’s
personal barriers or work-related barriers? Why?
Journal of North American Management Society, Spring 2015
Executive Compensation in Higher Education:
Effects of Institutional Characteristics and Performance on
Presidents’ Compensation
Michael E. Dobbs, Eastern Illinois University
Elizabeth M. Schwindenhammer, Eastern Illinois University
While CEO compensation has been widely explored (Huang, 2010), there is also debate about whether university
presidents are equitably paid given university budget cuts and rising tuition rates (Ehrenberg, Cheslock, and
Epifantseva, 2001; Cotton, 2012). We explore possible determinants of compensation for university presidents of
419 private and 160 public universities. We hypothesize about the effects of enrollment, endowment, and employee
size; graduation and retention rates; and other institutional factors on presidents’ compensation and use regression
analysis to test these hypotheses. We find strong support for a positive effect of enrollment on university presidents’
pay levels, but this effect is moderated by institutional control.
Income inequality is increasingly the subject of much political and social debate (e.g., Fuller, 2014;
Obama, 2014; International Monetary Fund, 2014) and may be fueling increased scrutiny of the highest
paid employees of organizations, including chief executive officers (CEOs). Recently there has been
scrutiny over hefty compensation packages for a different type of chief executive -- university presidents
(Stripling, 2012a). Discussions and analysis abound concerning whether university presidents are being
paid fairly (Ehrenberg, Cheslock, and Epifantseva, 2001; Cotton, 2012), and faculty members on
university campuses have questioned university president pay compared to their own (Chen and Huang,
2009).
According to an analysis published in The Chronicle of Higher Education (Stripling and Newman, 2013),
four public university presidents were compensated more than $1 million in 2012, an increase from three
university presidents a year earlier. Additionally, thirty-six private university presidents, up from thirtythree a year earlier, also earned more than $1-million in 2010. It appears university presidents are
continuing to receive significant pay raises even as government funds are declining, tuition is rising, and
many universities are engaged in large-scale budget cuts (Belkin, 2013).
In light of this, many universities now feel the need to defend compensation packages awarded to their
presidents and how those packages are developed. In their defense, some argue that a president's salary
only makes up a small percentage of an institution’s budget and has no impact on tuition increases, and
also that corporate chief executives are rewarded with far greater compensation given comparable
organizational size and complexity (Stripling and Fuller, 2011). University presidents earn on average
one-third of the compensation compared to CEOs of companies with equivalent size (Chen and Huang,
2009). Also, according to the National Association of Independent Colleges and Universities (as cited in
Burnsed, 2011), searches for university presidents are highly competitive, and institutions must offer
compensation packages that attract highly skilled and qualified leaders. This could also contribute to
presidential pay continuing to rise if colleges and universities must meet labor market demands to attract
and maintain successful and capable presidents (Burnsed, 2011).
Some researchers have examined possible factors affecting college and university president’s pay, and
most of that work has focused on private colleges and universities. In this study we examine both public
and private sectors combined and separately. We follow the lead of Bartlett (2012) and draw from both
the limited body of research on university president compensation and the larger set of research on CEO
compensation to develop our ideas about variables that may affect university president compensation.
University President Compensation
Spring 2015, 15
The objective of this study is to provide new understanding and insight into the compensation
determinants of university presidents in both public and private universities. Below, we explain the
hypotheses we developed concerning determinants of university president compensation. We then
describe the data we collected that included the salaries and benefits paid to the presidents of 579
universities, along with other institutional characteristics such as institutional control (i.e., public or
private1), enrollment, tuition, admission standards, and more. We discuss the multiple regression
modeling we used to test our hypotheses, both in a combined data set and then separately by institutional
control. Finally, we tease out additional insights by plotting some of our models as graphs and then
discussing limitations and extensions for further research.
HYPOTHESES
Researchers have consistently found that firm characteristics and performance are significant
determinants of CEO pay (e.g.; Pfeffer and Blake, 1987; Garen, 1994; Rose and Shepard, 1997).
However, there has not been nearly as much research on university president compensation over the years
(e.g., Pfeffer and Ross, 1988; Ehrenberg et al., 2001; Chen and Huang 2009; Bartlett, 2012). Most of this
research has examined private universities and has relatively ignored the public sector. Therefore, the
bases for our hypotheses are closely related research topics rather than previous work examining the same
combination of data and variables.
Institutional Size
Ehrenberg et al. (2001), Monks (2004), Banker, Plehn-Dujowich, and Xian (2009), and Chen and Huang
(2009) focused on institution size and its correlation to a university president’s pay using student
enrollment as a proxy. In these studies they find that university presidents at larger institutions (measured
by student enrollment) are paid more than university presidents at smaller institutions. Chen and Huang
(2009) reason that larger universities require a president with more talent to manage the complexity that
comes with handling more students, which causes larger universities to offer higher pay to attract and
maintain university presidents fit to manage a larger institution.
In addition to student enrollment, other researchers have examined the number of faculty as a measure of
institutional size having an effect on university president compensation. Tang, Tang, and Tang (2000)
state that the number of full time professors at a university can influence the amount of students who are
interested in attending that university. A large number of professors can mean more programs, training,
and specialized degrees offered to students. If a larger number of professors can attract a higher student
enrollment, then the institution’s size will increase by both the number of professors and student
enrollment. Tang, Tang, and Tang (2004) and Pfeffer and Ross (1988) measured institution size by both
student enrollment and full-time professors and found a positive correlation with university president pay.
As for CEO compensation, Sapp (2008) also found the complexity of a job to grow with the increase in
an organization's size. Larger companies require more talent and skills necessary to accomplish the
required job. To attract the leaders essential for the position, companies must offer competitive pay (Sapp,
2008; Kaplan 2013). Universities require leaders with talent and skills comparable to chief executives of
corporations to manage a university just as well (Cornell, 2002). In their study, Chen and Huang (2009)
found university president compensation to be closely related to institutional size as a proxy for job
complexity. Given the competitive labor market, boards may offer a higher compensation package to
attract high-quality university presidents (Chen and Huang 2009; Pfeffer and Ross, 1988). Banker et al.
(2009) also found the compensation of university presidents to be significant and positively associated
with an organization’s complexity. Thus, regarding institutional size, we hypothesize the following.
1
For-profit institutions were not included.
16 Journal of the North American Management Society
Dobbs & Schwindenhammer
Hypothesis 1a: The number of university students will be will be positively related to the annual
compensation package of university presidents.
Hypothesis 1b: The number of university employees will be will be positively related to the annual
compensation package of university presidents.
A major role that presidents play in many if not all universities is overseeing the fund raising activities of
the university, including increasing and managing the school's endowment funds (Bartlett, 2012, Tang et.
al., 2000). The Chronicle of Higher Education surveyed university presidents and found more than half
spent part of nearly every day on fund raising (Chen and Huang, 2009). Ehrenberg et al. (2001) found
that universities with a higher endowment per student paid their presidents more. Bartlett (2012) also
measured a university’s endowment based on the university’s student enrollment and found limited
evidence that it is positively associated with university presidents' pay. Therefore, because universities
with higher endowments are more likely to have more financial resources with which to pay employees
(including presidents) and higher endowments are indicative of larger organizational size and complexity,
we expect there to be a positive correlation between endowment and university president compensation
and hypothesize the following.
Hypothesis 1c: University endowment levels will be will be positively related to the annual
compensation package of university presidents.
Institutional Performance
Agency theory (Fama & Jensen, 1983; Eisenhardt, 1989) is used by scholars and others to describe
situations in which resource owners, called "principles," delegate work to another group, called "agents,"
and problems arise from this arrangement. Specifically, problems occur when the goals of the two parties
conflict (e.g., a CEO is motivated to maximize personal wealth rather than shareholder wealth) and it is
difficult for principals to verify or monitor the actions of agents. Many researchers have investigated
CEO compensation from an agency theory perspective and they have generally found mixed results.
Common variables representing performance have been return on assets or equity (Finkelstein &
Hambrick, 1989; Miller, Wiseman, & Gomez-Mejia, 2002; Lilling, 2006; Ghosh, 2006; Vieito, Khan,
Cerqueira, & Brandao, 2008) and stock price or market capitalization (Rose & Shepard, 1997; Miller,
Wiseman, & Gomez-Mejia, 2002; Lilling, 2006).
In the case of universities, the board of trustees may be viewed as the principal (representing broader
ownership interests) with the university president serving as the agent. The board of trustees presumably
monitors the university president using measures of performance, and compensation may be one control
mechanism used to manage this principal-agent relationship (O’Connell, 2005). Perhaps two of the most
direct education-related performance measures for universities are retention and graduation rates. Both of
these measures are closely related to the mission of any university. In addition, they are readily available
and hence, more easily and inexpensively monitored by principals. However, there has only been
minimal research regarding retention and graduation rate impacts on university president compensation.
Retention and graduation rates influence a university’s performance. However, there has been minimal
research on retention and graduation rates associated with university president compensation. Langbert
(2006) found that retention rate was highly correlated with university president pay, but was insignificant
in more robust regression modeling. We argue that 1) since retention rates and graduation rates are some
of the more direct measures of academic performance for universities, and 2) boards of trustees are
charged with monitoring such measures and holding presidents accountable for performance in these
areas, that president pay will be linked to these measures as hypothesized below.
University President Compensation
Spring 2015, 17
Hypothesis 2a: University performance, measured by retention rate, will be positively related to the
annual compensation package of university presidents.
Hypothesis 2b: University performance, measured by graduation rate, will be positively related to
the annual compensation package of university presidents.
Institutional Quality Indicators
Other than direct educational performance measures, more indirect measures of university quality could
be used by boards of trustees to evaluate university president performance. High-status universities are
frequently associated with higher admissions test scores (Bartlett, 2012). Tang, Tang, and Tang (1996)
argue that universities with the best academic reputations will be the ones to attract the most intelligent
students with the highest SAT scores. Universities with the more prestige may, therefore, recruit more
talented university presidents with superior human capital skills to lead their institutions. If a university
wants to uphold its status, it needs a strong leader that can take on the difficult tasks of maintaining the
quality of students and professors, thus higher compensation packages will be necessary (Banker et al.,
2009). Chen and Huang (2009) and Ehrenberg et al. (2001) found positive and significant correlations
between SAT scores and university president compensation and we similarly hypothesize the following
relationship.
Hypothesis 3a: Student admission test scores will be positively related to the annual compensation
package of university presidents.
Tuition can also be an indirect marker of university performance as a measure of what the market
(students, parents, etc.) believe to be the value of the educational experience and benefits of a particular
school. Beyond just a measure of quality and therefore of interest from an agency theory perspective,
tuition has the added impact of actually impacted revenue generated by universities. Bartlett (2012)
found that both companies and universities with more revenues possessed the assets and resources
necessary to reward executives with more compensation. Several researchers (Tang et al., 2000;
O’Connell, 2005; Chen and Huang, 2009) also found positive and significant relationships between
university revenues and president salaries for both private and public institutions. We hypothesize a
relationship between tuition rates and president compensation consistent with prior research as follows.
Hypothesis 3b: University tuition and fee rates will be positively related to the annual compensation
package of university presidents.
Institutions with higher tuition levels will generate more revenues, which may be used to pay higher
salaries for not only university presidents, but for employees as well. In addition, universities with high
quality reputations are found to be more financially supported by their graduates which can also lead to
higher salaries for all kinds of university employees. O’Connell (2005) found faculty salaries to have one
of the strongest linear relations with university president compensation. This may also be indicative of an
overall compensation philosophy of a university. We therefore hypothesize the following concerning
employee pay levels and university president compensation.
Hypothesis 3c: University faculty salary levels will be positively related to the annual compensation
package of university presidents.
Institutional Control
Public and private institutions compete for similar resources, such as funds, students, and professors,
however they remain differentiated based on their institutional characteristics and performance (Tang et
al., 2000). Chen and Huang (2009) and Monks (2004) both found public universities to pay their
18 Journal of the North American Management Society
Dobbs & Schwindenhammer
presidents less than private universities. Chen and Huang’s (2009) results showed public university
presidents earned about one-third less than their private university counterparts, while Monks (2004)
found that public university presidents received about 50 percent less. Pfeffer and Ross (1988) argued
that running a public university is less challenging due to a more stable budget and the higher student
enrollment that comes with a more attractive tuition rate. In addition, public universities depend on
political support and less on donations, whereas private universities depend more on donations and high
tuition costs as their major sources of funding because they do not receive funding from the government
(Pfeffer and Blake, 1987). Therefore, it is conceivable that public university presidents are paid less
because they are not required to have the same skill set need for successful management of private
universities. Consistent with previous research, therefore, we hypothesize the following relationship
between institutional control and president compensation.
Hypothesis 4: University presidents at private institutions will receive higher compensation than
university presidents at public institutions.
METHODS
The purpose of this study is to examine the compensation packages of university presidents in order to
understand more deeply the factors that affect pay levels and why those pay levels vary. We used
multiple regression techniques to model the effects of theoretical and control variables on university
presidents’ pay levels (dependent variable where:
President’s Annual Compensationi = β0 + β1x1i + … + βkxki + ui
Data concerning university president pay were available from The Chronicle of Higher Education (2013).
We gathered the total compensation packages for university presidents at 419 private universities during
the 2011 calendar year and at 160 public universities for the 2012 fiscal year. Fiscal years usually run
from July 1 to June 30 but can vary by institution, so the fall of 2011 is included in fiscal 2012. Total
compensation is not exactly the same between public and private institutions as reported by The
Chronicle. Compensation for presidents of private nonprofit institutions included some different
categories, such as the value of various nontaxable benefits. Also, the total compensation between public
and private universities differs by when in the year it is reported.
The Integrated Postsecondary Education Data System (IPEDS) was used as the source of data for the
theoretical variables used in this study: full-time equivalent (FTE) enrollment, FTE employees,
endowment, retention rates, graduation rates, admission scores, tuition and fees, and average salary of
full-time instructional faculty (U.S. Department of Education, 2014).
There were three measures of institutional size used in this study: FTE student enrollment (H1a), FTE
employees (H1b), and endowment level (H1c). FTE student enrollment for the fall of 2011 was a
combination of full-time and part-time student headcounts of both undergraduates and graduates for each
institution. The part-time component of FTE student enrollment was determined by multiplying a
school’s part-time headcount by a fractional factor determined by the type of institution (e.g., public fouryear university part-time students were multiplied by a factor of .403543, while their private school
counterpart’s corresponding factor was .392857). The fractional factors used by IPEDS were developed
by the U.S. Department of Education (2014). The measure of FTE employees was calculated by IPEDS
by summing the total number of full-time employees in the fall of 2011 and adding one-third of the total
number of part-time staff. As for endowment levels, private university endowments were measured as the
value of endowment assets at the beginning of the fiscal year July 1, 2010 – June 30, 2011. Public
university endowment levels were measured as the value of endowment assets at the beginning of the
fiscal year July 1, 2011 – June 30, 2012. According to IPEDS, endowment assets consist of “gross
University President Compensation
Spring 2015, 19
investments of endowment funds, term endowment funds, and funds functioning as endowment for the
institution and any of its foundations and other affiliated organizations.”
To examine the relationship between university president compensation and direct educational
performance measures two measures were used: retention rate (H2a) and graduation rate (H2b). The
retention rate represented the number of full-time, bachelor degree-seeking first-year students from the
fall of 2010 who returned to the institution for the fall of 2011. The graduation rate represented the
number of students who completed their degree programs within 150% of the normal time of completion.
For our data set, this would most typically measure the percentage of first-year students from the
academic year 2006-2007 who graduated by the spring/summer of 2012 or before.
Measures of indirect performance and institutional quality included student admission scores (H3a),
tuition and fees (H3b), and faculty salary levels (H3c). We chose to use the 75th percentile ACT
composite score to measure student admission scores. While most universities report scores for both the
Scholastic Aptitude Test (SAT) and the American College Testing program (ACT), a number of
universities only report scores for one or the other rather than both. (Note: 42 universities were deleted
in this process because they had neither SAT nor ACT scores documented on IPEDS.) For the 25
universities not reporting ACT scores but reporting only SAT scores, we converted the SAT scores for
critical reading and math for the 75th percentile into comparable ACT scores using the ACT-SAT
concordance published by the producers of both exams (ACT, Inc., 2014). Tuition and fees were
measured by the price of attendance for full-time, first-time undergraduate students for the full academic
year as documented for IPEDS. Faculty salary levels were calculated using the average salary of fulltime instructional faculty equated to 9-month contracts.
The final variable addressed in our hypotheses (H5) was institutional control. We created a dummy
variable coded “1” if the university was privately controlled and “0” if the university was a public
institution.
We included 579 institutions in our data set and Table 1 includes descriptive statistics (mean, minimum,
maximum, and standard deviation) and correlations for all of the variables included in the study. We used
Stata (StataCorp, 2007) to analyze data, run regression models, and graph results. The values of the
dependent variable, annual university president compensation, included several amounts that seemed to
be significantly higher than the rest. For example, the president of Pennsylvania State University,
Graham B. Spanier, received $1.2 million in severance pay and $1.2 million in deferred compensation
that are included in the amount reported for his compensation (Stripling, 2012b). This amount is atypical
for university president compensation packages and we considered dropping this institution and others
with similar variable values. However, to do so would have required that we investigate the details of
each and every compensation package in our data set of 579 universities. Given the tradeoff between
time and data set size, we chose to maximize the number of institutions in the study and rely on the data
as reported in The Chronicle, with whatever flaws may exist.
Another variable of some concern to us was the level of endowment assets. Out of 579 universities, only
10 exceeded $5 billion with the four schools highest being Harvard, $27.6 billion; Yale, $16.5 billion;
Princeton, $14.8 billion; and Stanford, $13.9 billion. To control for this skewness, we calculated a logtransformation of endowment and used it in our regression models. The results were not very different
from the results without the transformation and interpreting results (and graphing results) was much
simpler without the transformation, so we elected to include endowment without a log transformation.
20 Journal of the North American Management Society
Dobbs & Schwindenhammer
Other transformations of variables were considered, as well. We examined quadratic (x2) and polynomial
(x3) transformations of several of the independent variables. Results were sometimes significant;
however, most of the significance of the squared or cubed terms occurred outside the vast majority of
observed values. For example, there were statistically curvilinear effects for endowment; but when the
resulting equations were plotted, the curve was only applicable to the extreme outlier values and did not
provide valuable insight for the vast majority of institutional values. In effect, such models became linear
in nature once again when they were plotted for more expected values. Therefore, we elected to use
straightforward linear regression models.
With multiple measures of the same constructs of institutional size, performance, and quality,
multicollinearity was expected to occur between independent variables and was found in abundance.
While certainly not an ideal quality of a data set, high multicollinearity is no worse than a very small
number of observations or variables with small variances (Achen, 1982, p. 82). Regression models
account for multicollinearity and frequently produce wider confidence intervals, insignificant t-ratios,
and/or high R2 values with few significant t-ratios (Gujarati, 1988, pp. 290-293). Therefore, we assert
that issues relating to multicollinearity within our data are adequately addressed in our choice and
implementation of regression modeling.
RESULTS
Table 2 displays the results of regression models testing the hypotheses using the complete data set with
579 observations. In equations that examined the relationships between theoretical variables by
themselves and the dependent variable, every variable but institutional control was statistically significant
at the p < .001 level and in the direction hypothesized. In addition, each of those models (again, with the
exception of the institutional control model 9) was statistically significant at the p < .001 level. Model 8
which included faculty salaries as the independent variable had the highest R2 value of .34. Other high R2
values were observed for models 2 (.22 for FTE employees), 4 (.19 for retention rate), 6 (.18 for ACT
scores), and 5 (.16 for graduation rate).
We used a stepwise regression technique to develop a multiple regression “best” model with multiple
theoretical variables included (StataCorp, 2007). Individual variables not significant at the p < 0.01 level
University President Compensation
Spring 2015, 21
were excluded one at a time until we developed model 10. Model 10 includes theoretical variables
representing FTE enrollment, FTE employees, graduation rate, tuition, and faculty salaries. All variables
and the model itself are significant at the p < .001 level, and the R2 value is .43. However, the coefficient
for graduation rate is in the opposite direction as predicted.
Models 1-8 provide limited support for hypotheses 1a, 1b, 1c, 2a, 2b, 3a, 3b, and 3c. Model 10 provides
even stronger support for hypotheses regarding enrollment, number of employees, tuition, and faculty
salary; but the earlier support for graduation rate is contradicted. Only hypothesis 4 is not supported at
all, and this was very unexpected given that significant differences existed in previous research between
private and public universities. We believed this warranted further investigation. We calculated separate
descriptive statistics and correlations for private universities (N=419) and public universities (N=160) to
further explore the effects for each institution control type. These data are found in Tables 3 and 5. Once
again, significant multicollinearity is present in both data sets and this may have been the primary cause
of the lack of significance in the combined data set model for the public/private dummy variable. To
determine if variables remained positively and significantly related to university president compensation
for both public and private institutions, we ran individual regression models for each type of institutional
control. These results may be found in Tables 4 and 6 and indicate that public and private universities
have different values and significance for each theoretical variable regressed on university president
compensation.
Just as with the combined data set, all theoretical variables for private universities were significant at the
p < 0.001 level and positively related to university president compensation. Also, all models were
significant at the p < .001 level. The same was true for public universities, except that tuition and faculty
salary were only significant at p < 0.01 level, and those models were only significant at the p < .01 level.
Therefore, once again, our hypotheses were supported by simple, single-variable linear regression models
-- this time for private and public universities analyzed separately. We again used stepwise regression
techniques to attempt to find best models of combined independent variables for both data sets. Model 9
22 Journal of the North American Management Society
Dobbs & Schwindenhammer
in Table 4 shows the best model for the variables in the private institution data set. This model included
FTE enrollment and average faculty salary, was significant at the p < .001 level, and had an adjusted R2
value of .56. No such model was possible with the public university data set. All attempts to find a
multiple regression model with statistical significance and a higher R2 value were futile. The best model
for the public data set was Model 1 in Table 6. We surmise this was due to a combination of
multicollinearity between existing independent variables and unaccounted for independent variables that
drive public university president compensation.
As is evident comparing adjusted R2 values between Table 4 and Table 6, much more variation of private
university president compensation was explained than for public institutions. Table 4 indicates FTE
University President Compensation
Spring 2015, 23
enrollment and faculty salary contained the highest adjusted R2 values of .42 and .48 respectively,
indicating they were major factors in determining university president compensation for private
universities. Table 6 indicates FTE enrollment had the highest adjusted R2 value of .16 for public
institutions. This means FTE enrollment was the variable explaining the most variation in public
university president compensation. Examining the differences in R2 values between private and public
universities, it is clear that the theoretical variables for public universities explained far less of the
variation in university president compensation than for private universities -- and by a wide margin.
DISCUSSION
Table 7 presents a summary of our hypotheses and their support from the various regression models.
While all the hypotheses received some levels of support, FTE enrollment was the theoretical variable
with the most support. To explore this relationship further, we plotted university president compensation
against FTE enrollment separately for public and private institutions.2 The resulting plots are presented
in Figure 1. The slope of the line for private universities is much steeper compared to that of public
universities. For public universities, president compensation increases more gradually with increases in
enrollment. However, as enrollment increases at private universities, its presidents’ compensation rises at
a much faster rate. Public universities are generally much larger than private universities, which is why
enrollment size begins around 7,000 students; whereas private university enrollment size begins at a
lower amount, below 1,000 students. Even though public universities have significantly higher
enrollment levels than their private school counterparts, private universities still pay their presidents at a
much higher level. To reach the $1 million compensation threshold, a public school would be predicted
to need an enrollment of about 60,000 students while a private school would only need about 15,000
students.
Returning to another of the interesting results of this research -- the much lower explanatory power of our
models for public institutions vs. private ones -- our best models only accounted for about 25% of the
2
!!!!!!!!!!!!!!!
In an unreported regression model for the combined data set, FTE enrollment and institutional control
(the variables plotted in Figure 1) combined to make up a very strong model: both variables and the
model itself were significant at the p < .001 level with an adjusted R2 of .25.
24 Journal of the North American Management Society
Dobbs & Schwindenhammer
variation in public university presidents’ pay compared to nearly 60% of pay for private university
presidents. Clearly there were variables missing from our models that would have added significantly to
their predictive value. In future research regarding public universities in particular, measures of research
orientation, athletic programs, and state and local politics and economics may improve the value of the
models. Also, it may be worth noting The Chronicle of Higher Education omitted a surprisingly high
number of public institutions compared to the number of private institutions, and this may be another
reason why the theoretical variables used in this study did not have the expected effect on public
university president compensation. In addition, The Chronicle did not always report figures for university
presidents that accurately reflected impacts of one-time disbursements such as retirement windfalls. We
did not include such payments in the total compensation data and were limited to the quality of The
Chronicle’s reporting.
We chose information and resources that were available and accessible in a timely manner for this study.
There are still more measures not included in this study that may have impacts on university president
compensation. We used cross-sectional data. Perhaps a more longitudinal orientation examining growth
rates of some variables would be beneficial. For example, is president compensation linked to change in
graduation rates or retention rates rather than just the rates themselves? Also, personal characteristics of
the presidents were not included in this research3 and future research may possible benefit from their
inclusion (e.g., tenure at the university, academic background, personal wealth, age, etc.).
A few conclusions are strongly supported by this project. First, there is strong evidence that university
size, as measured by number of students enrolled, is positively related to university president pay.
However, this effect is moderated by the type of institutional control. Private university presidents are
paid much greater amounts to oversee enrollments of much smaller numbers of students than their public
3
!!!!!!!!!!!!!!!
Information regarding the sex of each president was collected and analyzed. Never was gender found to
be a significant variable in any regression equation.
University President Compensation
Spring 2015, 25
university counterparts. This gap in presidential earnings may pose problems for public universities in
recruiting and attracting highly skilled and talented presidents due to private institutions being able to
offer much more attractive compensation packages. Further investigation of these relationships is
warranted, especially if the difficulty public universities may have in attracting highly qualified applicants
results in marked declines in institutional quality and performance.
26 Journal of the North American Management Society
Dobbs & Schwindenhammer
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Journal of North American Management Society, Spring 2015
Supply and Demand Considerations for the U.S. Health Care
Workforce: What May the Future Hold?
Michaeline Skiba, Leon Hess Business School, Monmouth University
David P. Paul, III, Leon Hess Business School, Monmouth University
Five factors that influence supply and demand within the health care workforce are demographics, education, the
healthcare delivery system, the economy, and context. These factors are interdependent and powerfully influence
stakeholders involved in health care administration. All of them are in constant flux and heavily rely on the
economy and context – two of the five factors that gained prominence since the Great Recession and determine
strategy and policy related to future employment in all professional sectors. This paper reviews these factors from
the vantage points of selected health care professions, and examines the opportunities and threats that lie ahead.
Keywords: health care, workforce issues, supply and demand
INTRODUCTION
In their 2008 health care administration book entitled “Health Care Delivery in the United States,”
Kovner and Knickman identified five factors that influence supply and demand within the health care
workforce: demographics, education, the health care delivery system, the economic system, and context
(the U.S. culture, government, and political systems). To produce a desirable balance in terms of supply
and demand, these factors must attain market equilibrium in which “… there are enough workers wanting
the jobs employers have, at the wages they are offering” (Kovner & Knickman, 2008, p. 324).
The health care workforce and its sites of service are diverse and widespread. On the demand side, the
challenges posed by the sheer size of the Baby Boomer population will be significant since their health
care needs will escalate with age, while on the supply side their departure (or partial departure) from the
workforce will create shortages within all employment sectors and, perhaps most acutely, in health care.
Six years ago, Swenson (2008, p. 64) predicted that “human capital resources are about to reach true crisis
proportions. The growth in the demand for health care occupations is twice that of non-health
occupations, resulting in the need for more than 4.3 million health professional workers to fill the job
openings created by departures and new positions between 2004 and 2014.”
According to the most recent 2010-2020 Bureau of Labor Statistics (BLS) projections, the growth in
demand for health care workers will be significantly higher than that estimated by Swensen (2008). Jobs
within health care that include public and private hospitals, nursing and residential care facilities, and
individual family services are expected to grow by 33 percent, or 5.7 million new jobs, and within this
group the need for registered nurses (RNs) will grow by nearly three-quarters of a million (Bureau of
Labor Statistics/Occupational Outlook Handbook, 2013).
DEMOGRAPHICS
A large proportion of the Baby Boomer generation (the demographic group born between 1946 and 1962)
is facing traditional retirement age. At the present time, the oldest are now 68 and eligible for Social
Security. If this older group follows the lead of their parents – a generation that reaped the benefits of the
creation of Medicare, the expansion of Social Security, and richly funded employer-defined pension plans
– their exodus from the workforce into retirement will create profound employment and medical
challenges unprecedented in the United States.
!
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Skiba & Paul, III
It is estimated that by the year 2030, the number of individuals 65 and older will have nearly doubled
from that of 2005, totaling approximately 70 million nationwide (Institute of Medicine, 2008). By the
year 2015, over 20% of the workforce is expected to be aged 55 and over, an increase of nearly 50%
(AARP Public Policy Institute, 2006). These statistics alone warrant an examination of how and why
both private sector employers and the U.S. health care industry must modify their approach to the
inevitable consequences caused by these changing demographic and employment market conditions.
Differences in geographic health care services and spending practices comprise another demographic
variable. At the present time, policymakers are seeking strategies to reduce one aspect of this variable:
Medicare costs. There is a great deal of debate regarding whether cutting payment rates to high cost areas
of the country would save money without adversely affecting Medicare beneficiary health care quality
and outcomes. In March of 2013, the Board on Health Care Services for the Institute of Medicine (IOM,
2013) stated that if there are substantial differences in provider practice patterns within regions, cutting
payments to all providers within a region would unfairly punish low cost providers in high spending
regions and unfairly reward high cost providers in low spending regions.
Although there are other variables including but not limited to income and race, age is a demographic
variable that will significantly affect the health care workforce in terms of Affordable Care Act
implementation. In a review of a book published nine years ago and entitled “Health Insurance Coverage
in Retirement: the Erosion of Retiree Income Security” by Weller, Wenger, and Gould, a BLS author
noted that while the book excludes the impact of two important reforms – the Medicare Modernization
Act and the Patient Protection and Affordable Care Act (ACA) – it contains important historical
perspectives and trends in health care coverage. Several years before the Great Recession, the authors of
this book prophetically observed that both income security for retirees and the percentage of retirees with
employer-sponsored insurance would fall and will continue to fall (Moehrle, 2013). Another age-related
challenge will occur at the opposite end of the spectrum: young, healthy adults. In 2013, open enrollment
for health insurance exchanges (HIEs) commenced under the ACA, and the Obama administration
.encouraged millions of young people to enroll and offset the costs associated with more expensive
populations covered by the Act. According to a Kaiser Family Foundation poll, “51 percent of 18-29year-olds are unaware that the Affordable Care Act is still the law, and with outside parties’ campaigns to
dissuade this key demographic, convincing them to choose coverage over a fine could be a tough sell”
(Sofastaii, 2013. online). Conversely and in another Kaiser poll, approximately 74% of people age 30 and
younger feel it is very important to have health insurance coverage (Moehrle, 2013). It remains to be seen
how and where this demographic group will choose its insurance coverage.
EDUCATION
Among other criteria, access, outcomes assessments, safety measures and quality improvements require a
health care delivery infrastructure that is based upon well qualified and well trained and educated
professionals. Here, we examine how some prominent medical professions have evolved over time, and
what will be required from them to meet current health care industry changes.
Nurses
As the need for health services continues to increase as the population ages, fewer people are entering and
staying in the nursing profession (Sochalski, 2002), where Baby Boomers comprised half of the
workforce (Blythe et al., 2008). Partially due to the result of required and extensive training and
education, the average age of many workers in the health care professions tends to be older than the
national workforce average. Nurses are no exception to this generalization, as the current average age of
a registered nurse in the U.S. is 44.6, and for a licensed practical nurse, it is 43.6 (Health Resources and
Services Administration, 2013). This is actually an improvement in average age for nurses, as Hatcher et
Supply and Demand Considerations for US Health Care Worker
Spring 2015, 31
al., (2006) had predicted that, by 2010, approximately 40% of the U.S. nurse workforce will be over 50
years of age. Large numbers of retirement-age nurses will begin leaving the profession at or shortly after
that time, according to the Nursing Management Aging Workforce Survey that polled nearly 1,000 nurses
and determined that more than 55% of respondents intended to retire between 2011 and 2020 (Orlovsky,
2006).
A shortage of nurses in the future should thus be of no surprise, and has, in fact, been forecast since 1998
(Buerhaus, Auerbach & Staiger, 2007) as nursing “mirrors the trend in population” by aging with the rest
of the population (Fitzgerald, 2007 p. 237), with some predictions of the shortfall as large as 500,000 by
2025 (“Despite Americans’ high regard”, 2008). While this shortage may be a bit less than predicted
(Buerhaus, Auerbach & Staiger, 2007), due to larger than expected numbers of older workers entering the
nursing profession (Auerbach, Buerhaus & Staiger, 2007; Christmas & Hart, 2007) and an increasing
percentage of foreign-trained nurses in the U.S. (Polsky, Ross, Brush, & Sochalski, 2007), a substantial
shortage of nurses – especially hospital nurses (Buerhaus et al., 2007; Buerhaus, Needleman, Mattke, &
Stewart, 2002) - appears to remain imminent. In addition, two-thirds of the nurses who joined the
workforce in 2005 were aged 50 or greater, so the increase in supply of nurses will be short lived
(Buerhaus, Donelan, Ulrich, Norman, & Dittus, 2006).
Other, quite credible estimates of the magnitude of future shortage of RNs exist. According to the Bureau
of Labor Statistics’ Employment Projections 2012-2022 (http://www.bls.gov/news.release/
ecopro.t08.htm), the demand for RNs is projected to grow by 19%, reaching 3.24 million in 2022. During
this period, the Bureau also anticipates the need for over half a million replacement nurses, bringing the
total number of job openings for RNs to over a million by 2022. The website of the American
Association of Colleges of Nursing (http://www.aacn.nche.edu/media-relations/fact-sheets/nursingshortage) notes several recent studies relating to the projected shortage of nurses:
•
Juraschek, Zhang, Ranganathan, & Lin, (2012) forecasts a shortage of RNs spreading across the
country until 2030, becoming the most intense in the South and the West.
•
The Robert Wood Johnson and the Institute of Medicine (Committee on the Robert Wood
Johnson Foundation Initiative on the Future of Nursing, at the Institute of Medicine, 2011)
released a landmark report calling for increasing the number of baccalaureate-degreed nurses in
the workforce to 80% and doubling the number of nurses with doctoral degrees by 2020. These
are lofty goals, as the current nursing workforce in the U.S. falls far short of these
recommendations. As of 2013, only 51% of RNs have obtained baccalaureate degrees
(Campaign for Action, 2014).
•
Buerhaus, Auerbach & Staiger (2009) noted that, despite the current easing of the nursing
shortage due to the recession, the U.S. nursing shortage was projected to grow to over 250,000
RNs by 2025. The researchers pointed to a rapidly aging workforce as a primary contributor to
the projected shortage.
•
Data from the 2008 National Sample Survey of Registered Nurses (Health Resources and
Services Administration, 2010) indicates the effect of magnitude of projected retirements from
the nursing profession. Although 444,668 RNs received their license to practice between 2004
and 2008, the total number of RNs in the U.S. grew by only 153,806 bring this period, probably
indicating that the anticipated large-scale retirements of older RNs has begun.
While these data are significant, what may be more important are the replacement costs, the loss of
intellectual capital, and the potential impact on the safety and quality of care of patients who are affected
by this exodus. Older nurses have been found to be more courteous and committed than many younger
32 Journal of the North American Management Society
Skiba & Paul, III
nurses, and have a more in-depth understanding of patients’ needs, as they bring wisdom and experience
developed through years of patient care (Gillies, 2003; Watson, Manthorpe, & Andrews, 2003). Older
nurses also have been shown to have more organizational loyalty, more respect for authority and a
stronger work ethic than their younger counterparts (Letvak, 2003; Sherman, 2006). Older nurses have
been described as hard working, knowledgeable, dedicated, intuitive and accomplished in decisionmaking skills, more adventurous and more optimistic (Hatcher et al., 2006). In short, older nurses possess
valuable experiential knowledge (Fitzgerald, 2007), and their loss results in significant departure of
institutional memory and intellectual memory (Swenson, 2008). A report by the Robert Wood Johnson
Foundation (Hatcher et al., 2006, p. 10) concluded that the loss of older nurses “might well have a
negative impact on quality of care, patient satisfaction and safety, productivity and organizational
performance.”
A report written by the National Academy of Sciences (2010) recommended that nurses should practice to
the full extent of their education and training; licensing requirements and rules governing the scope of
practice across states need to be unified for advance practice nurses who have master’s or doctoral
degrees; and residency programs for nurses must include training in community health, public health, and
geriatrics. Although some progress has been made – states have dropped barriers to allowing nurses to
practice their profession to the full extent of their education and training – many have not. For example,
66% of states do not allow nurse practitioners to practice without physician supervision (Robert Wood
Johnson Foundation, 2014). Clearly, governmental, administrative and clinical stakeholders will need to
continue to work together to achieve these integration goals.
Physicians
For several decades, some health planners have forecasted a surplus of U.S. physicians (Cooper, 2004;
Salsberg, & Grover, 2006), while others have predicted a shortage (Fleming, Evans and Chutka, 2003;
Sheldon et al., 2008). This disparity in assessment is not confined to the supply of physicians in the U.S.;
some researchers believe that the world itself is facing a surplus of physicians (Scheffler, Liu, Kinfu, &
Dal Poz, 2008), while others predict a shortage (Thistlewaite, Leeder, Kidd, & Shaw, (2008). Although
the reasons for these diametrically opposed conclusions are often unclear, the fact that the methodologies
employed are often diverse and subjective [see Scheffler et al., (2008) for a discussion of needs-based
versus economic analysis, and Dumpe, Herman and Young (1998) for a review of some of the forecasting
models for physicians] contributes to the discrepancy. However, those who predict a shortage of
physicians appear to have the more powerful and compelling arguments.
The demographic argument itself is difficult to refute. On the provider side, like the overall workforce in
the U.S., the physician workforce is a component of the Baby Boomer generations, and as such is aging
as a group: in 2008, over 30% of physicians were over 55 years of age, and the number 65 years or older
is forecasted to double by 2020 (Sheldon et al., 2008). Similarly, on the health care recipient side,
patients are also part of the Boomer Generation, and the elderly not only require additional health care as
they age; they are strong advocates for health care (Cooper, 2004).
Certainly, whether one agrees or not with the projection of an overall shortage of physicians, there
appears to be little or no argument that a shortage of physicians who specialize in treating or who
predominately treat the elderly will occur. An obvious example is the practice of geriatric medicine. The
healthcare workforce trained to treat the elderly, especially the physicians in this discipline, is and will
continue to be inadequate to meet patients’ needs as the Baby Boomers age, as exemplified by the fact
that nursing home occupancy in the U.S. is expected to double by 2030 (Lee & Sumaya, 2013). Too few
physicians adequately trained to understand and treat the complex constellations of chronic conditions of
the elderly exist today (Bragg et al., 2012), and this situation is expected to become worse in the future
(Egan, 2011). In 2012, there were approximately 7,300 geriatricians in the U.S. By 2030, approximately
Supply and Demand Considerations for US Health Care Worker
Spring 2015, 33
30,000 geriatricians will be needed to care for the estimated 27 million older Americans. Conservatively,
this would require training 1,200 geriatricians annually over the next 20 years to meet projected demand
(American Geriatrics Society, 2012). While some (Scherer, Bruce, Montgomery, Bell, 2008) argue that
the shortfall in the number of geriatric care providers can be mediated by increasing the numbers of
Advanced Practice Nurses with training in gerontology, the shortage in number of nurses overall makes
this argument difficult to accept, especially when one considers that only 4% of social workers, 1% of
nurses and 1% of physician assistants identify themselves as specializing in geriatrics (Mezey & Kovner,
2003; Rowe, 2009).
Despite the growth of training programs in geriatrics, and increasing exposure of undergraduate medical
students and internal medicine residents to geriatric medicine, Fleming, Evans, & Chutka (2003) note
that, per capita, the number of practicing geriatricians has declined. Certainly, geriatrics is perceived by
medical students and residents to be an unpopular specialty due to complicated patients combined with
low compensation and status for their treating physicians (Goldman, Silverman & Mintzer, 2012). The
perception of low compensation should not be surprising: a board eligible specialist in Internal Medicine
or Family Practice must undertake an additional one year Fellowship in geriatrics to become board
eligible in that field, after which he/she will, on average, make less than they would have had they not
specialized in geriatrics, a situation which has persisted you decades (Rubin and Beck, 1994; Szot, 2013).
The number of physicians entering geriatrics fellowship training continues to drop, despite the fact that
under provisions under the ACA, Medicare pays through 2015 a 10% bonus to physicians, including
geriatricians, for evaluation and management (Langston, 2012; Span, 2013). Other difficulties associated
with increasing the number of geriatricians include few appropriately trained faculty, the need for
relationships with nontraditional training sites, and lack of funding (Thomas et al., 2003). Certainly, the
shortage of individuals trained in geriatrics is likely to worsen, with potentially dire consequences for a
patient population group expected to grow rapidly in both absolute numbers and health care requirements.
Physicians’ practice patterns and workloads will soon undergo dramatic change because of the new
requirements associated with the implementation of the ACA. Grogan (2011) has observed that several
states in the southern and mountain regions of the country continue to have a shortage of primary care
physicians, and these same states will experience large increases in Medicaid enrollments under the ACA.
Similarly, Whitcomb (2011) observed that the combined effects of the ACA, the increase in chronic
diseases, and the aging population will create a larger demand for medical services at the same time as the
relative size of the physician workforce itself begins to decline.
Comparable to the nursing and physician shortages, the supply of practitioners of physiatry (formerly
known as physical medicine and rehabilitation) has been forecast to be insufficient for some time (Hogan
et al., 1996). This problem will be exacerbated by the pressure on physiatry training programs to reduce
the number of training positions (DeLisa, Subbara, & Christodoulou, 2001). Compounding this difficulty
is the fact that physiatry, as was noted above for geriatrics, is not an economically rational specialty for
physicians to pursue: using the Medicare fee schedule as a basis of comparison, psysiatrists’ hourly
compensation is the lowest of all specialists and subspecialists groups (Berenson et al., 2010).
A McKinsey survey confirmed what many other researchers have reported, and what is being updated
within this paper. It revealed that while U.S. Baby Boomers control nearly 60% of U.S. net wealth, 60%
of this population will not be able to maintain a lifestyle close to their current one without continuing to
work, and the same percentage of older boomers already suffers from chronic health problems (“Meeting
boomers’ retirement expectations”, 2008).
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THE HEALTH CARE DELIVERY SYSTEM
For over twenty-five years, the evolution of managed care plans created more cost-effective forms of
health care delivery. Unfortunately, however, it also streamlined both the number and the compensation
of physicians and nurses. As managed care plans moved from HMO to PPO structures, they still did not
address persistently rising health care costs within the entire health care system, increased deductible and
coinsurance payments from insurance plans, discontent from physicians and nurses, or health care system
integration. Thus, in 2010 when national health reform took effect with the ACA, accountable care
organizations (ACOs) gained prominence and were designed to ameliorate these issues, even though
patients-consumers would have to limit their provider choices in exchange for coordinated care and
lowered out-of-pocket costs.
Accountable Care Organizations (ACOs)
Kovner and Knickman (2011, p. 58) believe that “…there is now evidence that organizations, such as the
Geisinger Health System in Pennsylvania (which functions like an ACO), offer a more comprehensive,
organized, and integrated experience for patients that is seen as favorable to consumers and effective at
improving quality.” Although the Centers for Medicare & Medicaid Services (CMS) has tested
demonstration projects and created comprehensive and complex regulations to promote the creation of
ACOs, some health care administration experts concede that little is known about how these organizations
might work in actual practice (Shi & Singh, 2013). Regardless of these viewpoints, as of May of 2013,
CMS completed 250 ACO contracts across the country and thousands of others are being designed.
Many large health plans expect widespread ACO growth. For example, Cigna has 60 ACO contracts
covering 650,000 lives and it anticipates almost doubling that number to 100 contracts covering a million
covered lives. Similarly, Aetna has 17 ACO contracts and intends to have 30 by the end of 2013 and 60
by the end of 2014 (Wehrwein, 2013). While determining the total number of ACOs in the U.S. at any
given time is difficult, Lewis, Colla, Carluzzo, Kler, & Fisher, (2013) identified a total 270 ACOs in the
U.S., serving areas 55% of the population, and The Commonwealth Fund identified 428 ACOs as of
January, 2013 (Damore et al., 2013).
ACOs are unique entities because they are designed not only to bear total clinical responsibility for the
entire spectrum of care that is offered to defined patient populations but also to share the financial
responsibility of the savings and losses associated with providing care to these patients. Therefore, it is
not surprising that these dual responsibilities have been viewed by different health care stakeholders with
both optimism and skepticism.
In terms of financial risk, ACO provider configurations are commonly described in terms of the medical
specialties that are involved (McClellan, McKethan, Lewis, & Roski, 2010). However, attention must
also be focused on how ACOs organize with either firm organization contracts (that extend organizational
boundaries to include a newly employed physician or medical discipline) or market organization contracts
(in which physicians remain autonomous and are paid on a fee-for-service basis). Without a balanced
treatment of firm and market organization considerations, some warn that “… ACOs’ potential [may be]
limited in successfully taking on [both] clinical and financial accountability for patient outcomes”
(Hayen, van den Berg, Meijboom, & Westert, 2013, online).
From the plan/payer standpoint, one leader portrays his organization’s payer and provider relationships as
harmonious. Dr. Richard B. Salmon, Cigna’s lead executive on ACO development, stated that his
company conducts quarterly and joint operating committee meetings with its ACO providers, and that
“now, we [the company] are active collaborating partners with physicians. We are adding value”
(Wehrwein, 2013). Another article acknowledged that a great amount of time and involvement will be
required from physicians (Marcille, 2013).
Supply and Demand Considerations for US Health Care Worker
Spring 2015, 35
The provider views appear to be cautious yet optimistic. Dr. Barney Newman, chief medical officer of
Westmed Medical Group, a multispecialty group of 250 physicians in Westchester County, New York,
said that “[Our] ACO contracts are much more of a partnership with the providers than an adversarial
relationship. There is sharing of data, support for care management, and attempts to coordinate the
different levels of resources available between plans and provider” (Wehrwein, 2013). The benign,
collaborative nature of the payer-provider relationship has been echoed by other providers, including a
retail pharmacy chain, as follows:
•
Dr. G. Alan Kurose, president of Coastal Medical, a 100 physician (and mostly primary care)
group, envisions increased access to nurse care managers. This is a medical discipline that may
grow as a result of the emphasis on overall care management.
•
Michael Murphy, CEO of Iowa Health System’s ACO, admits that his ACO is invading the
insurer’s space while keeping costs down and taking more responsibility for the management of
outcomes.
•
As a health services company, Walgreens formed its own ACO and has co-branded materials and
licensed software that develops care plans for patients in their practices in Florida, New Jersey,
and Texas. The company’s vice-president for health care solutions commented that they view
themselves as extensions of primary care doctors (Wehrwein, 2013). Again, this business
strategy also may increase the demand for more pharmacists in the near future.
Regina Herzlinger, a Harvard business school professor and author of well-regarded health care
administration books, is vociferously skeptical about ACOs. Although she acknowledged that health care
systems such as Kaiser Permanente have had a great deal of experience with developing a team culture,
most new ACOs will fail, and for several reasons. In an interview with Managed Care Magazine (Burns,
2012, p. 29), she made the following observations: “I hope I’m wrong about this, but I believe that with
some exceptions, ACOs will not succeed. ACOs will implode just as capitated HMOs imploded in the
1990s. People say that won’t happen because we have better data now. Wish it were true, but we don’t
have better data now. The electronic medical record systems don’t talk to each other and the public
health insurance exchanges are largely a dream waiting to happen, rather than a reality.” Herzlinger also
commented on the payer-provider relationship: “One way they [insurers] are confronting their fears is by
buying providers, which is not going to work. The idea that insurers can manage providers is just as
unrealistic as the idea that providers can manage insurance.” She went on to voice her concerns about
limitations related to specialized care, coverage limitations, and patient-consumer choice restrictions.
ECONOMIC FORCES
Indisputably, the most obvious and disconcerting economic force affecting the entire U.S. workforce is
the Great Recession, which started in December, 2007 and ended in June of 2009 (National Bureau of
Economic Research, 2010). The consequences of this financial meltdown have been and will continue to
be worrisome for many years, simply because it has wrought so many negative repercussions in all
employment sectors, including health care.
Although the unemployment rate has very slowly declined since the Great Recession, underlying forces
have slowly eroded the fiscal health of the workforce – especially the segments of the workforce that
want to continue or begin to seek active, full-time professional employment (Newman, 2012). At this
juncture, it is important to revisit the status of one of the largest and most influential groups – the Baby
Boomers – to see how they have fared through this fiscal crisis.
36 Journal of the North American Management Society
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Older adults’ view of retirement is changing from a complete cessation of work to an assortment of
employment choices (Townsend, 2008). Based upon a Harris online survey, Collinson (2012) found that
56% plan to work past age 65 or not to retire, and only 19% do not expect to work after retirement.
Considering that the percentage of adults stating that they were “not to” or “not at all” confident of having
the financial wherewithal to retire rose from 25% in 2009 to 38% in 2012 (Morin & Fry, 2012), the fact
that 74% of workers in 2011 stated that they planned to work in retirement (Helman, Copeland, &
VanDerhei, 2011), 65% of Baby Boomers planned to put off retirement for financial reasons
(Careerbuilder, 2011) and 12% did not feel that they would ever be able to retire (Careerbuilder, 2013)
should not be surprising.
What is surprising is the fact that many workplaces have not adapted well to older workers. While 94%
of businesses think that it is important to retain older workers (Bank of America Merrill Lynch Workplace
Benefits Report, 2011), approximately 30% of firms expect in the next five years to have a significantly
higher percentage of older workers but state that their firms are not effectively adapting their human
resources strategies to cope with this situation (Economist Intelligence Unit, 2011).
On a more positive and employer-based note, progressive organizations that included BP American, LLP,
Ford Motor Company, IBM, JP Morgan Chase and Shell International participated in a Conference Board
study that reported the following:
•
Companies that adapted to potential retirees by recruiting, retaining and developing flexible work
schedules for them were ahead of competitors who view the aging workforce largely as a strain
on pension plans and costs
•
Industries feeling the greatest pain in terms of skill shortages were oil, gas, energy, health care
and government
•
Approximately half of companies interviewed for the report believed the loss of older workers
presented potential knowledge vulnerabilities (“Aging workforce offers”, 2005).
Similar to the disparity in opinion regarding the under- or over-supply of health care professionals, the
opinions regarding the value of older workers have varied. Haight & Miles (2005) believed that the aging
of the Baby Boomer workforce posed serious concerns for employers; however, one study that primarily
examined physiological changes nevertheless asserted that “the culture and values of the older worker are
significant assets for the companies that choose to attract and retain them. These values include
commitment and loyalty to the employer, fewer sick days, reduced injuries, and enhanced length of
service” (McMahan & Sturz, 2006, p. 54). Other studies have noted the professional value of older
workers. Hill (2004) found that older workers were more conscientious, more agreeable, more
emotionally stable and made fewer mistakes due to their work experience, and Lockwood (2005, p. 7), in
a report for the Society for Human Resource Management, noted that experiential knowledge of the older
workforce was “at the very heart of the organization's future and its sustainability in an ever increasing
competitive marketplace.”
Since the recession ended, the global economic slowdown, the housing crisis, and the increased erosion of
work and workplace benefits have banished many older workers from the workforce. Furthermore, one
of the most disturbing aspects of the new economy is the rapid rise of the temporary employee. For
example, one analyst from the Associated Press reported that the biggest job gains have occurred in
lower-paying fields, such as hotels, restaurants, and retail, and while average hourly pay increased, the
average workweek (and weekly paychecks) declined (Rugaber, 2013). While many workers struggle to
achieve economic stability, the temporary staffing industry is experiencing an economic “boom.”
Staffing Industry Analysts, a firm based in Mountain View, California, projects a six percent annual
Supply and Demand Considerations for US Health Care Worker
Spring 2015, 37
increase in temporary staffing revenue over the next two years (Green, 2013). While one might think that
these gains originate from the industries that historically pay lower wages in general, temporary
placements also have increased in heretofore professional level, full-time disciplines. Daryl Gaugler, a
senior vice president with Quintiles Transnational Holdings Inc., stated that the top five pharmaceutical
companies have increased their temporary staffing of sales and marketing professionals from five percent
to as much as 20 percent of their workforces, and in the northwestern part of the country, health care
systems are more than doubling their use of temporary nurses and various care therapists (Green, 2013).
The increased use of temporary employees continues to decimate several age groups. For example, those
who have remained unemployed or are persistently underemployed may continue to drain what remains in
their savings or not be able to save at all, and this includes younger generations of workers. In terms of
the health care workforce, many young people who want to pursue a higher education within a health care
profession may now defer or completely ignore their aspirations because of their own or their parents’
inability to absorb the costs now or in the immediate future.
CONTEXT: CULTURE, GOVERNMENT, AND THE POLITICAL SYSTEM
Schiller (2005) predicted that the U.S. was going to experience a tremendous shortage of health care
workers in the future. The phenomenon of globalization has compounded this problem even further.
Strictures applied to immigration requirements will inevitably affect the estimations of future supply and
demand employment figures related to all levels of health care professionals (Clark, Stewart, & Clark,
2006).
Without an increase in job growth, the labor market will remain sluggish. According to Daniel Aaronson,
vice-president and director of microeconomic research and Scott Brave, senior business economist with
the Chicago Federal Reserve, substantial improvement in trend employment growth is critical to
economic growth. Their analysis reveals that “…payroll employment was about 6 million jobs, or 4%,
below trend in 2012. Closing this gap by 2016, for instance, would require payroll employment growth
of about 195,000 per month on average over the next four years” (Aaronson & Brave, 2013, p. 1). It is
important to note that these authors cited both future labor force participation and immigration as integral
forces that determine how their estimates will evolve.
The implementation of the ACA is intended to financially transform the health care workforce – not to
mention the lives of all Americans – by providing insurance coverage to millions of the currently
uninsured by 2014. Through the expansion of Medicare eligibility and a mix of subsidies and mandates
that encourage workers to purchase health care insurance, other purposes of the Act include lowering
overall health care costs and implementing ACOs to address such issues as cost containment, access, and
quality of care. Notwithstanding these noble goals, the enforcement of the Act poses problematic and
controversial concerns.
In late 2012 and prior to the outcome of the presidential election, popular press outlets reported that
Republican and Democratic governors from a number of states expressed their confusion over whether
state-based, federally administered, or a combination of state and federal health insurance exchanges
(HIEs) should be created. At that time, the HIEs were scheduled to start enrolling people by October of
2013. While several governors were prepared to follow the law, others such as Wisconsin’s Governor
Scott Walker faced conflicting pressures from their state legislators and interest groups (Goodnough &
Cooper, 2013). During that same timeframe, another issue arose over whether further reductions to
Medicare or Medicaid spending – apart from the projected savings anticipated through the ACA – should
be considered as part of the federal budget deficit. According to one source, short-term cuts to Medicare
are not urgently needed and Medicaid should not be cut further “… lest it discourage states from
38 Journal of the North American Management Society
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expanding coverage, unless the savings are achieved through better health care management” (Editorial
Board, The New York Times, 2012, p. A30).
Political and private industry constituents continue to impede ACA implementation. In April of 2013, a
paper written by the National Association of Insurance Commissioners (NAIC) analyzed state-specific
methods for lowering premium increases (Pear, 2013). Anticipating the ACA’s limitations on insurers
charging higher premiums based on age, pre-existing conditions, and the uninsured, the paper expressed
the NAIC’s concerns about the young adults whose premiums would become higher. According to Sandy
Praeger, the Kansas insurance commissioner, “you don’t want to price young, healthy folks out of the
market” so that many of them decide not to buy insurance, leading to higher average costs and higher
rates for all participants (Pear, 2013, p. 3). After the paper was issued, another NAIC spokesperson
claimed that most Americans will not experience significant changes in 2014 because they receive quality
insurance from their employers. This view is fallacious, given the rise in temporary employees who
cannot qualify for health coverage. In sharp contrast to some of these views, state regulators have
calculated widely different data. New York estimates that premiums will be half of what they are at the
present time, while Indiana warned of an average 72 percent increase, and Florida projects 30 to 40
percent increases (Appleby, 2013). Although state rates will vary because state regulations differ, Larry
Levitt, a senior vice-president at the Kaiser Family Foundation, a nonpartisan health policy research
organization, dryly commented that “premiums across states vary a whole lot less than the spin does”
(Appleby, 2013). Many insurers fail to recognize that people with low and moderate incomes – such as
younger adults – will be able to receive tax credits for any premium increase offsets.
In the private industry/employer sector, positive experiments are underway. There is a growing trend
among some large employer groups, including the California Public Employees’ Retirement System, in
which employees are given the choice of selected hospitals that charge only a fixed amount for a given
test or procedure, such as a CT scan or knee replacement. Otherwise, employees who opt for a doctor or
hospital that charges a higher rate will incur these expenses privately (Abelson, 2013). While this is not a
new concept, it exerts greater pressure on some of the Byzantine pricing structures within hospital
settings. How this trend will affect the health care provider workforce in terms of compensation and other
incentives is unclear at this time.
As mentioned earlier, the employer mandate requiring companies to provide their employees with health
insurance is postponed until 2015. While this change may give employers the opportunity to adapt to
administrative and reporting requirements, it does not bode well for states that already have announced
their HIE rates (Sullivan, 2013). Thus, the broader debate over the ACA continues.
SUMMARY AND CONCLUSIONS
As seen in all of the five forces reviewed here, demographically and educationally, the U.S. population
has dramatically shifted within only a few years. In 2008, prior to sweeping health care reform and at the
height of the Great Recession that rocked the entire U.S. population, findings gleaned from MetLife’s
Sixth Annual Employee Benefits Trends Study revealed that retention was rated by employers as their
number one benefits objective (Eldred & Madden, 2008) This study was a geographically and industry
dispersed, two-pronged project: an employee survey of 1,380 full-time employees age 21 and over, and an
employer poll consisting of 1,652 interviews with benefits decision-makers at companies with a minimum
of two employees. Interestingly and regardless of age, 45% of the employees cited benefits as an
important reason why they remained with their current employer – up from 33% in the previous year.
The study also suggested several strategies that employers should consider to increase the value of their
benefit plans, including the provision of better decision support tools (product calculators on products and
coverage levels), a broader range of options (including health and wellness programs and broader
Supply and Demand Considerations for US Health Care Worker
Spring 2015, 39
resources for aging workers), and personalization (customization for various life-stage groups) (Eldred &
Madden, 2008).
In terms of the aging workforce and its societal ramifications, the Conference Board Research Working
Group on Mature Worker Engagement elicited feedback from health care companies that included but
were not limited to Bon Secours Richmond Healthcare, CVS Caremark, Deere & Company, and
GlaxoSmithKline. Conclusions from this report offered these practical approaches for employers to
follow:
•
Identify potential vulnerabilities and target interventions, use strategic workforce planning more
diligently to assess the impact of approaching retirements
•
Recruit mature workers since they are a priority for employers that face a shrinking supply of
younger workers, or who want a workforce that mirrors their mature customer base
•
Prepare for inevitable retirements, knowledge transfer from mature to younger staff must be key
to succession planning
•
Band together to conduct workforce planning industry-wide, and partner with other employers,
government programs and nonprofits (“Reinventing an aging workforce”, 2007).
Almost a decade ago, when progressive employers were starting to pay closer attention to the large
departures from the workplace, others – notably, health care insurers – were seeking marketing and
distribution opportunities among the Baby Boomer population. One study suggested that new groups of
health care consumers could be reached through marketing relationships with assisted living facilities,
specialty medical associations, and condominium developers and associations in popular retirement
locations. An example of this strategy was created by UnitedHealthcare, in partnership with the
American Association of Retired Persons (AARP), which offered Medicare supplemental insurance,
hospital indemnity insurance, and comprehensive insurance for seniors not yet eligible for Medicare, as
well as health advice through a nurse line for the AARP’s 35 million members (Bleil, Lewis, & Singhal,
2005).
After several post-recession years, the erosion of employer-sponsored health care benefits combined with
the changes in full-time (benefitted) employment and the potential specter of longer periods of
unemployment and underemployment have created serious challenges regarding health care coverage.
Furthermore, older, more experienced (and better compensated) workers lost their jobs and resorted to
either temporary employment or the pursuit of positions for which they were over-qualified – in other
words, the jobs that normally would be “reserved” for the opposite end of the age demographic: the entrylevel or younger workers. Obviously, these disturbing shifts have had incalculable financial effects on all
work sectors, including the health care sector. In addition to what we have briefly described here, we
presume that the psychological effects of these employment phenomena have placed an added burden on
behavioral and mental health care workers, another health care workforce factor that is not examined in
this paper.
For various socioeconomic and psychosocial reasons, all generations most likely will continue to work
beyond their parents’ retirement ages. This decision is predicated in part on the high cost of health
insurance and a decrease in health benefits, especially at older ages, both of which have encouraged
mature workers to remain working to retain employer-based health insurance or to return to work after
retirement to obtain health insurance through their employers. It is conceivable that impending health
care reform legislation will, in part, improve employment opportunities and health care cover to enable
these generations to realize their work-related objectives. However, it is premature to speculate how the
40 Journal of the North American Management Society
Skiba & Paul, III
unpredictability of immigration reform legislation will modify these and other general and health carespecific workforces.
Over time, the funding and provision of health care increasingly became the responsibility of the private
sector. During the recession, Mercer, the consulting firm that chaired the Advisory Board of the World
Economic Forum project, claimed that “governments almost universally are shifting the responsibility for
funding and, in some cases, the provision, of health care to employers or individuals” (“Mercer”, 2008, p.
76). Today, these same responsibilities are about to shift even further with the advent of the ACA, which
may offer more and unique employment opportunities within the health care sector. The Act requires all
HIEs to create and manage their own quality rating systems which will require additional staff. There
will also be a need for administrators who oversee subsidies and educate potential enrollees (Tabor,
Torda, Thomas, & Zutz, 2013). Myrl Weinberg, chief executive officer of the National Health Council,
believes that inconsistencies and unexpected interpretations of the Act will signal the creation and
enforcement of a uniform appeals process (Weinberg, 2013), another new function that could increase
hiring. Thus, the demand for health care administrative personnel may increase during the next few
years.
Employment prospects for health care providers remain unclear and mixed. In addition to quality of care
and access dimensions, ACOs will also and more carefully scrutinize why and how physicians –
especially specialists – are compensated for their services, and this, in combination with the economic
utility of pursuing longer and more expensive education to attain specialization, may delimit the number
of new entrants.
On a positive note, the implementation of the ACA will encourage a greater number of primary care
physicians; however, a shortfall already exists, and one must wonder whether the build-up of dire
predictions regarding severe capitation and oversight will only exacerbate the shortfall. We predict that
the demand for nurses and especially nurse practitioners will increase as these professionals assume
broader responsibilities for patient care and the chronically ill – a population that continues to grow and
require coordinated care. As briefly mentioned earlier, pharmacists will assume more active roles as
patient counselors and educators; their numbers are also predicted to grow.
In 2012, Robert Reich, the Chancellor’s Professor of Public Policy at the University of CaliforniaBerkeley and former Secretary of State in the Clinton administration, remarked about a Kaiser Foundation
study in which employer-paid expenditures for health care insurance markedly dropped from a nine
percent figure in 2011 to less than half that amount, four percent. While many might believe this drop
was good news, Reich believes otherwise with the following: “When it comes to health insurance,
employees increasingly have to choose between health insurance policies with sky-high premiums or with
sky-high copayments and deductibles. And since they can’t afford the former they’re opting for the big
copayments and deductibles – or no insurance at all” (Reich, 2012). Irrespective of the ACA, Reich is
concerned about health care waste – repeated tests, excessive paperwork – and, more importantly,
patients-consumers who go untreated and become chronically ill or have a crisis, simply because they do
not comprehend their own insurance coverage or their own ability to pay for its limitations. Ironically,
these same concerns will apply to the phased implementation of the ACA.
Finally, whatever choices are made by the constituents mentioned in this paper or elsewhere, it is
abundantly clear that the health care coverage concerns of all U.S. citizens will warrant sober and serious
attention – not only for themselves but also for the generations that follow them.
Supply and Demand Considerations for US Health Care Worker
Spring 2015, 41
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Journal of North American Management Society, Spring 2015
The Fallacy of Leadership Transparency
Jay Johnson, Fontbonne University
Jim Maddox, Friends University
The word “transparency” has become a staple of current organizational speak and a popular concept for leaders to
incorporate into their leadership persona. They attempt to create the perception that information and the rationale
for decisions will be clear and openly communicated. The purpose of this paper is to explore the apparent fallacy of
leadership transparency. That is, that often times, the more the word transparency is used by leaders in an
organization, the less actual transparency there is. The paper explores the allure of Leadership transparency and
offers reasons why the fallacy occurs. In this context, the role of overkill, intentions, and power and politics are
addressed. The authors describe what a transparent organization looks like and provide recommendations for
leaders. As a part of this research, the authors’ next step is in developing a means of measuring transparency. The
intent is to create a Transparency Index; A scale and assessment of an organization’s level of leadership
transparency.
INTRODUCTION
The word “transparency” has become a staple of current organizational speak and a popular concept for
leaders to incorporate into their leadership persona. Every few years organizations go through new terms
that are catchy and ultimately end up being more trendy than substantial. Though rooted in good
intentions, the term “transparency” has become somewhat of a joke as it is a term used by a number of
leaders seeking credibility. Leaders often follow the letter of the law in terms of financial transparency.
At the same time, they overuse the concept of transparency in their leadership style. They attempt to
create the perception that information and the rationale for decisions will be clear and openly
communicated. So why is there this discrepancy between the intention of transparency and the reality of
a lack of it?
The purpose of this paper is to explore the apparent fallacy of leadership transparency. That is, that often
times, the more the word transparency is used by leaders in an organization, the less actual transparency
there is.
LEADERSHIP TRANSPARENCY DEFINED
The definition of leadership transparency seems to vary by the person using the term. Leaders with actual
executive positions have a different perception of its meaning than those being led in the lower ranks.
According to Merriam-Webster's dictionary, "transparency" denotes an individual or system that is "free
from pretense or deceit and readily understood," A general definition for leadership transparency in this
paper is when an organization has an open communication policy in which all organizational members are
valued, trusted with the truth, and given any information pertinent to their organizational charge.
INTENT OF LEADERSHIP TRANSPARENCY
The simple intent of leadership transparency is to create a culture of candor in which all employees are
free to perform their job duties with an adequate amount of information flowing freely within the
organization (Bennis, Goleman, & O’Toole, 2008). With this intent, the idea is that organizations will be
more efficient and productive with employees performing at an optimal level. Though this seems like a
utopian concept, this outcome is technically possible. According to the survey by Deloitte (2008), 72
percent of respondents agree that if their boss was more open about his/her need to take time off during
Fallacy of Leadership Transparency
Spring 2015, 49
regular work hours for personal reasons, it would create a more engaging and productive environment.
Overall, the survey found data that supports leadership transparency making a positive impact on
employee productivity.
ALLURE OF LEADERSHIP TRANSPARENCY
What is the allure of the concept of transparency? Bennis (2009) asserted more companies are choosing
transparency for two reasons: they have less choice -- and it works. Technology is driving transparency.
According to Bennis, the technology has democratized power in a way that must shock those who
previously monopolized it. While knowledge is still power, as it becomes more widely distributed, so
does the power it generates. The notion of leadership is beginning to change as power is democratized.
In addition, the term “leadership transparency” is sexy. Some weak leaders tend to use sexy terms that
have a certain allure. It is a very enticing proposition for a leader to claim they are being transparent,
however, is this really possible? What may be transparent to one person is not to another, thus we may see
the creation of a toxic organization where cynicism rules the day. Once cynicism sets in and the toxicity
of the organization reigns supreme, the culture of trust that supports transparency will disappear. After
that, the term “leadership transparency” loses its allure and only becomes a simple buzz word scoffed by
cynics, using the term to prove a point opposite to the intent of the leader.
WHAT IS THE FALLACY?
When considering the concept of leadership transparency, what is the fallacy? The definition of the word
“fallacy” is a deceptive, misleading, or false notion, belief, etc. Organizations often have espoused values
or behaviors that are not lived out in their actions. Organizational leaders and members say they believe
and do one thing, when in reality, their actions are just the opposite of what they proclaim.
Therefore, the fallacy of leadership transparency is that the actions and behavior of the leader who is
espousing transparency are often misleading and deceptive. If you hear the leadership constantly talking
about how important transparency is and how the organization will be transparent, chances are just the
opposite is occurring. The more the organizational leadership talks about leadership transparency, the
less transparency there usually actually is.
WHY THE FALLACY OCCURS
With the term transparency being used freely, and often recklessly, it is possible that there is now a
fallacy being professed whenever the term is uttered. From use by our political leaders, to use in our own
organizations, transparency elicits emotions based on a number of issues. How is this possible? How did
such a great concept as leadership transparency become a variable rather than a constant? The authors
suggest several possible reasons.
One, we must consider the possibility that the leader(s) knows they are not being transparent and is just
using the concept to present the perception and to appear transparent and open. The leader is self-aware
of themselves not being transparent but is using the term as a type of manipulation. This fake
transparency allows the leader’s behaviors to “hide in plain sight”. Organization members want to
believe their leader and want the organization to be successful and to be transparent, therefore they
automatically assume that transparency exists. Organizational politics, power, and deception through
manipulation, are all potentially at play when a leader is falsely proclaiming transparency.
50 Journal of the North American Management Society
Johnson & Maddox
A second possible explanation might be when the leader is not as self-aware and inaccurately believes
they are being transparent. They may think that they are openly sharing but in reality they are not openly
sharing what is occurring. Leaders may assume certain information is widely known.
A third possibility may occur when the leader is selective in what is shared. There is not any
manipulation or deception, the leader just withholds some information. Leaders may believe that
individuals not in senior management do not care to know.
They may be avoiding key data or
information. They may filter what is shared, and they may use the phrase, “need to know basis” to avoid
sharing information.
FAKE TRANSPARENCY: FACT VS. TRUTH VS. REALITY
One suggestion of a cause for a lack of leadership transparency is so-called “fake transparency”. This
exists when organizational players in leadership roles are actually telling a truth about a given situation in
an organization, but the facts behind the truth are spun where other organization members unaware of said
facts are made to believe a spun “truth” rather than knowing the facts that created the actual truth. Thus
the reality is hiding in plain sight, but only those choosing to not believe the fake transparency actually
see the real story behind the new organizational truth. Confusing? Yes. However, that is the genius behind
“fake transparency”. While people are naturally inquisitive, members of organizations are easily subject
to “fake transparencies” due to the simple desire to believe in a mission and a leader.
Not all leaders create a “fake transparency” on purpose. Some leaders are simply incompetent and cannot
help the decay of transparency in their organizations. A phenomenon known as the Dunning-Kruger
effect provides an explanation:
“The Dunning-Kruger effect describes a cognitive bias in which people perform poorly on a task, but lack
the meta-cognitive capacity to properly evaluate their performance. As a result, such people remain
unaware of their incompetence and accordingly fail to take any self-improvement measures that might rid
them of their incompetence” (Hawes & Grazioplene, 2010).
In essence, the Dunning-Kruger effect implies that some leaders are so incompetent, they refuse to make
any changes to improve themselves. Rather, these poor leaders attempt to shift everyone else’s reality to
accommodate their incompetence as an actual high standard. This phenomenon influences the level of
transparency.
TRANSPARENCY OVERKILL
Another suggestion for a cause in the decline of leadership transparency is so-called “transparency
overkill”. Related to “fake transparency”, “transparency overkill” is when an organization doesn’t let
transparency happen naturally. The more the organization talks about how transparent things are, the less
transparency there actually is. It is observed that some organizations create an excessive amount of
policies designed to legislate honesty and reality. While pure in intent, a side effect of this is cynicism in
employees tired of being watched by big brother. As the conversation around transparency leads to new
governance, naturally occurring transparency disappears due to the lack of trust implied by layers of
policies.
Though many organizations come to mind that worked to model open communication and transparency as
their culture, Harrah’s was an extreme example of such practice. As observed in 2007 by one of the
authors, the culture of Harrah’s was an example of our concept of “transparency overkill” in that it was an
expectation that information flowed freely to a fault. While that sounds great, it was observed that the
sheer amount of open communication expectations was somewhat overwhelming to the employees and
led to some cynicism. While management bragged that they value their employees and listen to their
Fallacy of Leadership Transparency
Spring 2015, 51
thoughts, concerns, and opinions, employees rolled their eyes at these mandated attempts at transparency.
Many strategies were developed to accomplish the mandate such as the monthly fold, technology kiosks,
and strategically placed Harrah’s communication propaganda posters.
The monthly fold. Harrah’s created new organizational terms such as “the monthly fold” in order to
demonstrate open communication and transparency. “The monthly fold” was an insert given to all
employees to put in the back of their lanyard badge that had all of the employee and public events
scheduled for the next month. It was called a “fold” because you had to fold it so it would fit into the
lanyard badge sheath. The information on the “fold” was in a tiny font to maximize the space available on
the “fold”. This was a strategy of Harrah’s to demonstrate that everyone was aware of everything going
on in the facility because they had documentation of it on their person the entire time they are in the
facility. Some employees reported liking this, while others felt like it was a little overwhelming that they
had to be aware of everything all the time, rather than focusing on the job at hand.
Technology kiosks. At key employee lounging and break areas Harrah’s placed technology kiosks that
were designed for collecting employee ideas and feedback. These “pac-man-esque” looking machines
would collect data employees offered and report it back to management. Though it wasn’t demonstrated
in the observation, it was reported that great ideas were implemented and the employee submitting the
idea was rewarded in some way. Employees reported that they liked having the opportunity to share their
ideas with corporate and seeing them implemented, but they also expressed concern that the reward
doesn’t benefit the employee as much as the ideas benefit the company, which resembled some level of a
feeling of exploitation.
Propaganda. While a typical casino floor, lobby, or restaurant is usually elaborately decorated, the back
rooms and hallways where employees exist are quite mundane – almost reminiscent of a call center. This
is no different at Harrah’s, except there was a number of posters covering the walls that have employee
and communication affirming messages. From employee events to a board celebrating employee
accomplishments, it is clear that Harrah’s worked to make sure their employees felt as if they were
important to the operation. However, some employees reported seeing through this as propaganda to
make them feel better about a job that was not their passion. The amount of work required of an employee
to maintain communication standards on top of the simple job they were being paid to do made the
communication pieces posted by Harrah’s not as effective as intended.
ORGANIZATIONAL POWER AND POLITICS
A final suggestion for a cause of the fallacy of leadership transparency is the simple existence of
organizational power and politics. The level of leadership transparency in organizations is directly related
to the power struggles and political games in all organizations. Since leaders exist at all levels of an
organization, the nature of the cause of the decline in this area is subjective and could be related to the
previous two suggestions presented by the authors. Bennis, Goleman, and O’Toole (2008) suggest that
leaders often do not handle information properly, and that the structure of the organization often impedes
information flow. In essence, a leader’s use of power and strategic alliances can either increase or
decrease the amount of transparency.
WHAT DOES A TRANSPARENT ORGANIZATION LOOK LIKE?
True leadership transparency is really reflected in a transparent organization. There are several
distinguishing characteristics of organizations that led by leaders who are authentically transparent. The
following list describes these characteristics:
52 Journal of the North American Management Society
Johnson & Maddox
•
Open, honest dialogue
•
Shared information that is freely dispersed without conditions Threat-free Communication –
across all directions in the organization
•
An organization structure that provides open access to different departments, groups, and levels
throughout the whole organization
•
An organizational culture of trust, empowerment, honesty, and genuine caring for people.
An organization that strives for leadership transparency must embrace simple trust. Organizations are
basically designed to be huge, cross-functional teams that come together to accomplish a task of some
nature. Mission and vision defines the task, but what defines the team? Lencioni asserts “teamwork
begins by building trust. And the only way to do that is to overcome our need for invulnerability” (p. 61,
2002). With that in mind, one can assume that trust is the foundation of the teamwork that makes
organizations accomplish their mission and vision with greatness. This can mean a lot of things. It can
mean that we need our leaders to be human and show actual emotion. It can also mean that in a shared
leadership environment that everyone must know everyone else’s weaknesses in order to build on each
other’s strengths. Trust comes into play in either scenario because if one person on the team begins to
bully or exploit a teammate’s weakness, team morale and productivity will decline.
RECOMMENDATIONS FOR LEADERS
Authentic personal presence
Leaders must be authentic. Their behavior must be consistent with their words and their beliefs and
values. Leaders must have a personal presence that is genuine and sincere. People can see through
people who are phony and manipulative. Part of being authentic is a willingness to be vulnerable. A
willingness to be wrong, to not have all the answers, to be open to opposing perspectives. It also requires
an openness to listening and being available. This all requires a real level of self-awareness and overall
high level of emotional intelligence.
Open to Sharing Honest Facts
Mentioned earlier, there is a difference between fact, truth, and reality. It is nice to think that they are all
pure terms, but each term can be influenced by honesty or dishonesty. Leaders must share the honest facts
to employees or colleagues as they become important enough to be shared. Sharing honest facts is
sometimes a function of whether someone has the permission to share. People must understand that
leaders can’t disobey a directive. This is an unfortunate “truth” in some organizations, but in order for
transparency and open communication to still be present the leader must be trusted by followers that
understand the leader’s “reality”. However, “trust is an outcome of all a leader’s accumulated actions
and behaviors” (Bennis, Goleman, & O’Toole, 2008, p. 62). Sharing of honest facts when the leader can
share will build credibility that will assist in times when full disclosure is not allowed. Leaders must not
hide behind the mantra of “need to know basis”.
Culture Creation
Leaders must work to create a culture of trust and open communication and abide to that culture without
fail. Leaders set the tone for culture, so use of inaccurate or shallow terms can kill any progress made in
building a great culture. It is advised to not use the term “transparency”, but more organic terms that are
consistent with a leader’s leadership style. If a leader does not believe in transparency, but more a culture
Fallacy of Leadership Transparency
Spring 2015, 53
of trust, it is inappropriate to say otherwise; just as it is appropriate for the organization to expect
otherwise. If the culture of trust is to exist, leaders must “accept, even welcome, unsettling information. If
leaders regularly demonstrate that they want to hear more than incessant happy talk, and praise those with
the courage to articulate unpleasant truths, then the norm will begin to shift towards transparency”
(Bennis, Goleman, & O’Toole, 2008, p. 42). The bottom line is that good communication can happen
without transparency, but not without a consistent leader that can be trusted
WHERE DO WE GO FROM HERE?
The concept of leadership transparency is here to stay. It is not a fad and it will not go away. The way
leaders operate in terms of knowledge sharing, power distribution, access to information, and shared
decision making are rapidly changing and transforming the way leaders lead. This clearly reflects the
need for additional research into the concept of leadership transparency
As a part of this research, the authors of this paper are in the process developing a means of measuring
transparency. The intent is to create a Transparency Index; A scale and assessment of an organization’s
level of leadership transparency.
REFERENCES
Anonymous. (2008). Deloitte 2008 Ethics &Workplace Survey Finds Transparency by Leadership Makes a
Positive Impact on Employee Productivity. PR Newswire [New York] 08
Bennis, W. (2009). New Transparency. Leadership Excellence 26.12 (Dec): 7.
Bennis, W. & Goleman, D. (2008). Transparency: How Leaders Create a Culture of Candor. Jossey-Bass.
Hawes, D., Grazioplene, R., & D'Ardenne, K. (2010, June). When ignorance begets confidence: The classic
dunning-kruger. Retrieved from http://www.psychologytoday.com/blog/evolved-primate/201006/whenignorance-begets-confidence-the-classic-dunning-kruger-effect
Lencioni, P. (2002). The five dysfunctions of a team: A leadership fable. San Francisco, CA: Jossey-Bass.
Lipman, V. (2013, July). Why transparency is always the best leadership policy. Retrieved from
http://www.forbes.com/sites/victorlipman/2013/07/01/why-transparency-is-always-the-best-leadership-policy/
Stark, P. (2011, November). What is transparent leadership. Retrieved from
http://www.peterstark.com/2011/transparent-leadership-2/
Wolfe, G. A., Talaga, J. A., Bernard, L. (2009). A Matter of Transparency. T + D 63.6 (Jun): 64-67, 8. Apr.
Journal of North American Management Society, Spring 2015
A GRADUATE MANAGEMENT OF INFORMATION
TECHNOLOGY COURSE PROJECT:
WEB ANALYTICS
Brandi N. Guidry Hollier, University of Louisiana at Lafayette
It is often difficult to create thought-provoking projects that allow students the ability to apply their knowledge in a
real-world setting. This is particularly challenging in a graduate level Management of Information Technology
course that covers a vast array of topics throughout. In an effort to expand student knowledge of web analytics and
to encourage professional development, a web analytics course project is assigned. The project presented within
offers a proposed experiential learning opportunity for students enrolled in this (or similar) course. Project
learning objectives and specifications are presented. Teaching Notes are also provided.
Keywords: web analytics, management of technology, graduate management of technology course
INTRODUCTION
The web analytics project presented in this paper is included as part of the requirements for a Master of
Business Administration course entitled, “Management of Information Technology.” Although the class
covers a wide array of topics including strategic information systems planning, e-commerce, and the
creation and impact of organizational information systems, the underlying focus is on the optimal
deployment of information systems and information technology resources necessary to achieve an
organization's strategic imperatives. Thus, the project described herein is offered as an extension of this
underlying foundation. It also provides a service learning and professional development opportunity for
students.
Today, organizations are very mindful of the many strategic advantages a successful web presence offers,
but many are not aware of the power of analytical tools designed to help with this endeavor. As Internet
use continues to grow, websites continue to be developed, and competition grows, it is important for
organizations to have a better understanding of website analytics. How do users interact with the site?
Where are those users coming from? What about navigational issues? Answers to questions such as
these can help an organization to improve the usability of their website and increase conversion rates.
Performance metrics provide necessary support and direction for improvements in website design and
optimization strategies, all of which are important determinants of website success.
Importantly, web analytics is a real and emerging element of business intelligence (Chaudhuri, Daya, and
Narasayya, 2011). Whether the data is used alone or coupled with other business intelligence data, these
insights can lead to more informed decision making, better customer relationships, and improved strategic
initiatives (Iyer and Ramer, 2011; Chin, Chiang, and Storey, 2012). Such intelligent analytics can also
help organizations to establish a competitive advantage (Iyer and Ramer, 2011). In light of this, the
proposed project is beneficial to both local organizations and graduate students as they work to enhance
their knowledge in this area.
Various versions of this project have been offered for six semesters spanning over a five-year time period.
The project has been modified over the years based on student feedback, comments from the target
organizations used in past projects, and instructor experiences and reflections. The project is suitable for
use in a graduate level Management of Information Technology or Management Information Systems
(MIS) course. A scaled down version of this project may also be suitable for undergraduate courses in
these same areas.
Management of Information Technology Course Project
Spring 2015, 55
The web analytics project learning objectives, specifications, and description of deliverables follow.
Teaching notes are available upon request.
PROJECT LEARNING OBJECTIVES
The course project is intended to be completed in groups of four, with each student contributing an equal
amount to its completion. The learning objectives for the project are presented below:
1) To provide each student with an opportunity to develop and improve their problemanalytical, and creative abilities.
solving,
2) To gain insight about the use of information technology (IT) for strategic decision-making
purposes.
3) To deepen knowledge and understanding of the importance of web-based design practices and
web analytics as part of the overall strategy of the firm.
PROJECT DESCRIPTION
Students are required to employ Google Analytics to an organization’s (nonprofit, for-profit, or
governmental) website in order to evaluate and assess the effectiveness and impact of an online presence
on the target business. Google Analytics is freely available. In order to allow Google Analytics to work
with a website, it is necessary for a particular SCRIPT code (available from Google Analytics) to have
been inserted within the organization’s webpage. Ideally, Google Analytics Script Code should have
been embedded within the site of the target organization for at least one year, as this will allow students to
identify trends in the data.
Avinash Kaushik defines web analytics as: The analysis of qualitative and quantitative data from your
website and the competition, to drive a continual improvement of the online experience that your
customers, and potential customers have, which translates into your desired outcomes (online and offline)
(Cutroni, 2010, page. 5).
As the definition suggests, all of the data, measurement, and analysis must drive a process of
continuous improvement (Cutroni, 2010). Your group must make recommendations on how to
take action on the data that is revealed through the analysis. As part of this process, students are
required to perform segmentation analysis. Segmentation (e.g. viewing website traffic based on
the physical location of the visitors) allows you to delve deeper into the data to understand how
specific segments of traffic influence the overall performance of the website (Kaushik, 2010).
The use of advanced segmentation involving other relevant variables may provide additional,
and more sophisticated, insights as well. Students may also use the Google Analytics social
tracking feature and/or other features that will aid in their overall analysis.
PROJECT SPECIFICATIONS
1) Select a target organization (for-profit, nonprofit, or governmental). Ideally, Google Analytics Script
Code should have been embedded within the site of the target organization for at least one year, with rare
exceptions granted.
56 Journal of the North American Management Society
Hollier
2) Obtain permission and necessary instructions from the target organization to access Google Analytics
Data.
3) Prepare a project proposal that consists of the following: name of target organization, brief
background of target organization, outline of tasks to be performed to ensure timely completion of
project. This plan/outline should be developed using project planning software such as Microsoft Project
or OpenProj.
3) Set up initial interview with key representatives from the target organization. Students need to focus
on understanding the mission and strategic imperatives of the target organization first. Students then need
to learn the goals of the website (e.g. to provide visitors with information, to seek donations, to sell
products or services, etc.). This information must be obtained prior to beginning the analysis.
4) Provide a broad overview of the most pertinent analytics data. At a minimum, you are required to
assess the following within the analytics software: unique visitors, new visitors, returning visitors, page
views, page views per visitor, geographic location of visitors , bounce rate, referring pages/sites, visitor
language, browser type, visit duration, visitor paths, conversion rates (if appropriate goals have been set
within the analytics software).
5) Reviewing raw data is only part of this analytical process, as it is necessary to delve deeper to truly
understand user behavior and interactions. As such, look beyond the data presented in the analytics
software by surveying users and/or potential users of the website in an effort to gain a deeper
understanding of the data. Some qualitative data should be obtained through the use of these surveys, as
this is often very helpful in the overall analysis of the website.
6) After a careful review and analysis of the data, come up with a list of 5-7 actionable recommendations
to improve the website. These recommendations should be supported by the underlying data and
academic and/or professional literature on website design and usability. By providing actionable
recommendations, the target organization has the information necessary to move forward with
implementing the suggestions with minimal effort.
PROJECT DELIVERABLES
Each team must:
(1)
Prepare a report that clearly and concisely details the project, results, and actionable
recommendations. The inclusion of charts, graphs, interview transcripts, references, survey questions,
and survey results is highly encouraged.
(2) Prepare a 15 minute PowerPoint or Prezi presentation that reflects the essence of the project.
Students may wish to consider the use of embedded videos within. The presentation should summarize
the evaluation and assessment of the target business/organizational website. Please also include some
discussion of the actionable recommendations. All of the members of the group should participate in the
development of the presentation in some way.
(3) Complete peer evaluations. Students are required to evaluate each of their team members on
the following criteria:
completion of assigned tasks; contribution of useful ideas;
quality/accuracy of work, quantity of work; timeliness of work completion; attendance of group
meetings;
participation
in
group
meetings;
reliability;
quality
of
interactions/support/communications with other team members.
Management of Information Technology Course Project
Spring 2015, 57
TEACHING NOTES
As mentioned in the manuscript this project is offered as an extension to the material that is presented in
the class. As such, I educate students on the basics of web analytics in several different ways (e.g. guest
speakers that actively engage in web analytics and truly understand the importance of this data in strategic
decision making, educational videos on the art of web analytics, mini-lectures on various elements of
analytics) in order to prepare them to begin work on this project. A few links to sample videos that have
been either shown in class and/or posted to the electronic learning platform specific to the course follow:
http://www.youtube.com/watch?v=trfp2XdpgXI;
https://www.youtube.com/watch?v=Jx8OChGCtIY&feature=relmfu
YouTube videos featuring the Analytics Academy are also very helpful in helping students to
learn more:
https://www.youtube.com/playlist?list=PLpFemNRJ7CfiIOMvA07VGX_urp3YT07D7 )
TEACHING NOTES FOR PROJECT SPECIFICATIONS:
1) Project specification: Select a target organization (for-profit, nonprofit, or governmental). Ideally,
Google Analytics Script Code should have been embedded within the site of the target organization for at
least one year.
Teaching Note: In most circumstances, students will select their own target organization. In some
cases, however, organizations will contact the professor and ask to be included. In this case, the
professor will assign a particular organization to a group or simply randomly select a group if more
than one group is interested in preparing a report for that organization.
2) Obtain permission and necessary instructions from the target organization to access Google Analytics
Data.
Teaching Note: The target organization will provide students with the necessary login information
to access their data.
3) Prepare a project proposal that consists of the following: name of target organization, brief
background of target organization, outline of tasks to be performed to ensure timely completion of
project. This plan/outline should be developed using project planning software such as Microsoft Project
or OpenProj.
Teaching Note: This project proposal should be brief, but informative. Students need to show an
understanding of project planning. Students taking the class have been exposed to basic project
management skills and planning processes. In light of this, the professor does not spend any class
time explaining how to use project management software. Students not able to prepare a basic
timeline and outline of tasks using this software are directed to relevant online educational resources
(see https://www.youtube.com/watch?v=sPwURRG9_Gs, for example). Students may include the
following in their outline of tasks: date they expect to gain access to analytics data; date(s) they plan
to work on preparing interview questions for representatives from the target organization; date of
interview; date they plan to take an initial in-depth look at analytics data; date they will prepare
usability survey that will be administered by way of an online survey instrument*, date that progress
report is due; date(s) they will work on analysis of survey results; date(s) they will take a final look at
analytics data: date they will being to prepare final report.
58 Journal of the North American Management Society
Hollier
* Students will either ask their classmates or various other potential users of the website to complete
the survey.
4) Set up initial interview with key representatives from the target organization. Students need to focus
on understanding the mission and strategic imperatives of the target organization first. Students then need
to learn the goals of the website (e.g. to provide visitors with information, to seek donations, to sell
products or services, etc.). This information must be obtained prior to beginning the analysis.
Teaching Note: Although survey questions will vary depending on the target organization, some
(general) sample interview questions follow:
•
What is the mission of your organization?
•
What are the long-term/short-term goals of the organization?
•
How long have you had a web presence?
•
What are the goals of your website?
•
Do you have a social media presence?
•
If so, do you attempt to drive traffic to your website from these social sites?
5) Provide an overview of the most pertinent analytics data. At a minimum, you are required to assess
the following within the analytics software: unique visitors, new visitors, returning visitors, page views,
page views per visitor, geographic location of visitors , bounce rate, referring pages/sites, visitor
language, browser type, visit duration, visitor paths, conversion rates (if appropriate goals have been set
within the analytics software).
Teaching Note: As part of the report, students should include snapshots of various analytics data,
with an explanation that follows. Please see the teaching note associated with step 6 for more
information on what this explanation should include.
6) Reviewing raw data is only part of this analytical process, as it is necessary to delve deeper to truly
understand user behavior and interactions. As such, look beyond the data presented in the analytics
software by surveying users and/or potential users of the website in an effort to gain a deeper
understanding of the data. Some qualitative data should be obtained through the use of these surveys, as
this is often very helpful in the overall analysis of the website.
Teaching Note: Students should prepare this usability survey using an online survey instrument such
as the free version of SurveyMonkey or Google Forms. Although survey questions will differ based
on the target organization, students generally pose questions about the following: overall
impression, ease of use/navigation, visual appeal, organization of information, clarity of
information.
Open-ended questions often lead to very useful suggestions for website improvements.
examples of open-ended questions that may be posed follow:
•
What did you like most about this website? Please explain.
Some
Management of Information Technology Course Project
Spring 2015, 59
•
What did you like least about this website? Please explain.
•
What changes or additional features would you suggest for this website?
*Students use Likert scales for the more objective questions. Survey questions and results should be
included in the final report.
Importantly, survey results/findings are often used to explain the analytics data. For example, if
bounce rates are high on the home page, then students will look at the survey results to help determine
why. They may also search the web or academic literature to determine ‘reasons for high bounce
rates.’ A combination of the survey results and research findings should be used in the discussion
related to all figures, as this helps the target organization to gain a deeper understanding and
appreciation of the analytics data. Students are expected to use within text references and prepare a
full reference listing at the end of the report.
7) After a careful review and analysis of the data, come up with a list of 5-7 actionable recommendations
to improve the website. These recommendations should be supported by the underlying data and
academic and/or professional literature on website design and usability. By providing actionable
recommendations, the target organization has the information necessary to move forward with
implementing the suggestions with minimal effort.
Teaching Notes: Although actionable recommendations vary according to the outcomes of
the analysis and the goals of the target organization’s website, there are several (more
general) recommendations that tend to surface in many of the reports. These are as follows:
•
Increase stickiness of the site
•
Use Multivariate testing (A/B testing) to determine best layout/design of site
•
Set goals in Google Analytics
•
Change in color schemes or layout
•
Reach out to potential referring sites to increase website visits
•
Make the website mobile-friendly
Clearly, some recommendations are specific to the reason for the site’s existence (e.g., provide
visitors with information, seek donations, sell products or services, etc.). For example, sites that exist
to seek donations from visitors should make certain the donate tab is front and center on each and
every page of their site.
Students are expected to provide an in depth description of how the company can put these
recommendations into action. Again, students are also required to provide the necessary support
(e.g., survey data; academic or professional references) for these actionable recommendations.
60 Journal of the North American Management Society
Hollier
REFERENCES
Chen, H., Chiang, R.H., & Storey, V.C. (2012). Business intelligence and analytics: From big data to big impact.
MIS Quartely, 36(4), 1165-1188
Cutroni, J. (2010). Google Analytics. California: O’Reilly Media, Inc.
Iyer, L.S., & Raman, R. M. (2011). Intelligent Analytics: Integrating business intelligence and web analytics.
International Journal of Business Intelligence Research, 2(1), 31-45.
Kaushik,A. (2010). Web analytics 2.0: The art of online accountability and science of customer centricity.
Indiana: Wiley Publishing, Inc..
Chaudhuri, S., Dayal, U., & Narasayya, V. (2011). An overview of business intelligence technology.
Communications of the ACM, 54(8), 88-98.
JOURNAL OF THE NORTH AMERICAN MANAGEMENT SOCIETY
GUIDELINES
The Journal of the North American Management Society [JNAMS] is the official journal of the North American
Management Society [NAMS]. JNAMS is a multidisciplinary, online journal of interest to scholars,
professionals, students, and practitioners in a broad range of management thinking. The fields of study
encompasses human resources, industrial relations, general management, organizations, ethics, leadership,
entrepreneurship, global strategy, nonprofit, and public management. This is not an exclusive list. JNAMS is
an inclusive journal publishing peer-reviewed articles from any discipline that addresses management issues.
Non-peer-reviewed materials such as essays, research-in-progress, pilot studies, or commentary are also
published after review for quality and appropriateness. JNAMS is committed to developing theoretical and
practical knowledge about management and welcomes the full and equal participation of scholars and
practitioners alike.
General Information
Submissions should be written in standard American English, following the style outlined in The Publication
Manual of the American Psychological Association, 5th Edition. The reference style of all papers should follow APA
style, except that no line of the reference should be indented; all lines in the references should be flush left.
JNAMS Invites Submissions in the Following Categories
Peer-reviewed Articles
Full-length manuscripts are sought on research, theory, or reviews of the literature. In human resource
management, manuscripts are sought on topics that encompass compensation and benefits, international HR
and labor relations, labor and industrial relations, legal issues (EEO, ADA, FLMA, etc.), performance
appraisal, collective bargaining, recruitment and selection, safety and health, training and career development,
HRM applications, HR new technologies, and teaching HR.
Under general management, manuscripts are sought on topics that encompass organizational behavior, managing
quality initiatives, organizational theory, organizational change and development, organizational
communication and decision making, organizational culture and climate, managing diversity in organizations,
organizational management applications, managing organizations, emerging organizational forms, and
teaching management.
Under ethics and management, manuscripts are solicited that address ethics in management in all forms; ethical
decision-making in relation to suppliers, employees, customers, and investors; in ethics and the law; and
teaching ethics in the management curriculum.
In nonprofit management, works are invited which address areas of volunteer management, fund development
management, board and staff selection and training, planning and outcomes assessment, as well as other
topics related to the realities and challenges in the management of nonprofit organizations.
Under the broad topic of global strategy, manuscripts are invited on the topics of business functions,
communications, organizational management, distance learning, human resource management, information
management, industrial/organizations psychology, operational management, and business education.
62 Journal of the North American Management Society
Guidelines
For the broad topic of entrepreneurship, manuscripts are solicited in the topics of theories and models of
entrepreneurship, identifying and developing entrepreneurs, family-owned businesses, small business
planning,
small
business
life
cycles,
innovation
and
entrepreneurship,
corporate
entrepreneurship/intrapreneurship, entrepreneurship and economic development, new venture finance,
cyberpreneurship, entrepreneurial applications, and teaching entrepreneurship.
Leadership manuscripts are invited on the topics of leadership and leading, studies of leaders in resl-life
settings, paradigms of leadership, leadership applications and practice, research methods, cross-cultural
leadership practices, leadership development, leadership strategy, leadership education and training, leaders as
change agents, leadership in different contexts, entrepreneurial leadership, and teaching leadership in the
management curriculum.
The above-listed topics are not all-inclusive; rather, they are suggestive of the fields of study and instruction
from which manuscripts are invited. Case studies in any of the topic areas are also invited. All manuscripts
submitted for peer-reviewed publication will be reviewed by at least two anonymous reviewers.
Length: No more than twelve (12), single-spaced pages, excluding references and appendices.
Non-peer-reviewed Articles
These articles include: pilot studies, research-in-progress, studies with a small number of subjects, as well as
essays or commentaries that discuss management studies and management-related experiences based on the
author’s experience or opinion. All non-peer-reviewed material will be reviewed by the Editorial Board for
quality and appropriateness. Such submissions are not guaranteed publication.
Length: 3,000 to 5,000 words
Letter to the Editor
A letter to the editor should be a direct response to a paper that was recently published in JNAMS. The
authors of the paper referred to are given a chance to respond to the letter in the same issue in which the
letter appears. Letters may be edited for length and style, and are not guaranteed publication. Letters are not
peer reviewed.
Book, Film, or Video Review
These submissions include an evaluation of a recent book, film, or video that assesses its value for JNAMS
readers. Scholarly books and videos should be sent to the Journal Editor for consideration. Any book, film,
or video on a management studies-related topic will be considered. Send inquiries about reviewing to the
Journal Editor.
Length: 500 to 750 words
News and Notes
Unsigned short pieces announcing new publications, programs, resources, and events related to the broad
field of managment studies will be considered for publication. The submission should be made to the Journal
Editor and may not be used in its entirety, but will be used as source material for staff-written items.
Guidelines
Spring 2015, 63
Calls for Papers
Announcements of management-related calls for papers for conferences, journals, symposia, funding, etc.,
will be published as time and space permit. Such submissions should be sent to the Journal Editor.
Length: Varies
Submission Information
Authors should a copy of their submission via e-mail, or mail one CD copy, in Microsoft Word or
WordPerfect. Authors agree to a copyright transfer that gives JNAMS copyright to the paper once it is
published. JNAMS does not consider manuscripts that are simultaneously submitted elsewhere or previously
published elsewhere.
Contact Information
Submissions transmitted by e-mail should be sent to: [email protected]