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final project

  1. 1. Emotional Intelligence 1 The Value of Emotional Intelligence in Managerial Decision Making Lan Xie BUSAD 240 Professor Brooks April 20, 2009
  2. 2. Emotional Intelligence 2 A Table of Contents Introduction: A. A study of Johnson & Johnson Consumer & Personal Care Group B. Definition of emotional intelligence C. Brief history of emotional intelligence D. Thesis statement Body: A. Emotional intelligence assists managers in understanding and relating well to employees (1) Self-assessment (2) Communication (3) Empathy (4) Example of PAETEC B. Emotional intelligence also enhances managers to make wise choices and form strategies to implement these goals (1) Sound decision (2) Forming strategies (3) Implement (4) Example of Campbell C. Emotional intelligence helps managers raise the awareness of their performance and build up organizational competitive advantage (1) Awareness (2) Innovation (3) Adaptability (4) Example of Louis Vuitton Company Conclusion: A. Restate the thesis statement B. What I learned C. Recommendation
  3. 3. Emotional Intelligence 3 An Executive Summary
  4. 4. Emotional Intelligence 4 The Value of Emotional Intelligence in Managerial Decision Making A study was conducted on three hundred and fifty-eight Managers across the Johnson & Johnson Consumer & Personal Care Group globally to assess if there are leadership competencies that differentiate high performers from average performers. More than fourteen hundred employees took part in a one hundred and eighty three question survey testing Emotional Intelligence. Then participants are coded for performance rating, potential code, gender, functional group and regional area. Results show that the highest performing managers have significantly more “emotional intelligence” than other managers. This study supports the position that emotional competence differentiates successful leaders. High performing managers at the Johnson & Johnson Consumer and Personal Care Group were seen to possess significantly higher levels of Self-Awareness, Self-Management capability, Social Skills, and Organizational leadership, which are all considered part of the Emotional Intelligence domain (Cavallo &Brienza, 2001). What is emotional intelligence? According to the definition of our text book that emotional intelligence (EI) is an ability or skill to understand and manage one’s own mood and emotions and the moods and emotions of others. (text) The most distant roots of emotional intelligence can be traced to Darwin’s early work on the importance of emotional expression for the survival of the fittest. The traditional definition of intelligence is based on the cognitive aspects such as memory and problem solving. In the early 1900s, influential researcher in intelligences study had begun to realize the importance of the non-cognitive aspects. The famous researchers Peter Salovey and Jack Mayer created The Ability-Base Model in 1990, which proposed four types of abilities: perceiving emotions, using emotions,
  5. 5. Emotional Intelligence 5 understanding emotions, and managing emotions. Daniel Goleman became aware of Salovey and Mayer’s work and introduced The Emotional Competencies Model in 1995 which outlines four main EI constructs: self awareness, self management, social awareness, and relationship management.(wiki) Goleman argues that competencies based on emotional intelligence play a far greater role in performance in the workplace than intellect or technical skill. Indeed, emotional intelligence is the distinguishing competency of 85 % of the top leaders, while IQ and technical skills account for just 15% (The Irish Times). Managers with high levels of emotional intelligence are more likely to be successful in their career. It is not surprising then that organizations have become increasingly interested in helping their staff, particularly those in leadership positions, to develop their emotional intelligence competencies. Emotional intelligence has become a crucial part in Management. Good work relationship, sound decision-making, and awareness are the three major values of emotional intelligence in managerial decision making. Emotional intelligence assists managers in understanding and relating well to employees. Managers with honest self-assessments will not be quickly irritated with others and stay calm while facing a crisis. They will try their best to create harmony in their work stations and be able to accept realistic criticism. Managers with high emotional intelligence realize their emotions will affect how they treat others and how others respond to them. Research shows that an employee will be more wiling to approach a manager with a far- fetched idea if he feels that the manager is in a good mood. When managers are in a terrible mood, employees will try to avoid them at all cost.() The ability to recognize another person’s feelings accurately enable managers to develop better communication skill. Effective communication is the key element for a business to succeed. Without good communication
  6. 6. Emotional Intelligence 6 skills, managers will often feel stressed, and employees’ feelings get hurt. Eventually, misunderstanding leads to a low morale and low productivity. Empathy works when good communication and understanding are bonded together. It is a very important aspect of emotional intelligence. Managers with empathy skills enable them to have closer relationships with their employees and have a great power to influence and motivate employees in positive ways. Moreover, managers will get the support they need from their employees. For example, PAETEC Communications was founded in 1998 with less than 20 employees and revenues of only $150,000; by 2004, it had 1,000 employees and $360 million in revenues. The principle at PAETEC is that the employees come first. CEO Arunas Chesonis believes that if the company takes good care of the employees, the employees will take good care of the customers. Chesonis holds a conference every two weeks to keep his employees up to date. At PAETEC employees are expected to share their knowledge with everyone and have open communications. PAETEC celebrates holidays with employees, their families, and customers.(ch3) CEO Chesonis realizes that his employees are very valuable and important assets to the company. Chesonis has created a friendly working environment with respect, equality, admiration, recognition and care for his employees. The employees are highly motivated and committed to provide the best service to their customers. A good relationship leads to improved cooperation, fairness, and overall group performance. Emotional intelligence also enhances managers to make wise choices and form strategies to implement these goals. In an uncertain competitive environment, managers with high emotional intelligence can engage in thorough planning to find a strategy that will allow them to compete effectively. Managers with low emotional intelligence may “spend more time than they can afford to in analysis, may not demonstrate the courage to make choices, may avoid taking
  7. 7. Emotional Intelligence 7 responsibility, and may lack the commitment to execute a decision fully”( By Jeffrey E. Auerbach, Ph.D.). A good plan builds commitment and the right course of actions to attain a goal. The outcome of planning is a strategy. Formulating strategy requires managers to indentify organizational strengths, weaknesses, opportunities and threats. After performing a SWOT analysis, managers need to allocate responsibilities to specific individuals or groups, and take right actions to pursue the goal. The following is an example of how Douglas Conant, CEO of Campbell Soup, finding strategies to turn around the performance of the troubled food products maker in the 2000s. One of Conant’s first actions was to instigate a thorough SWOT planning exercise. This analysis identified the growth of organic and health foods. His internal analysis identified major weaknesses such as: the use outdated machinery to manufacture soups and high levels of staffing. He also observed that Campbell is afraid to take the risks necessary in the fast- changing food industry. Using this information Conant decided that Campbell needed to modify its core products to make them more appealing to the health conscious consumers. To further increase the sales, Campbell needs to appear in more food outlets such as: college dining halls, cafeteria and other mass eateries. Finally, Conant decided to give the responsibility of bringing new kinds of soups, salsas, and chocolates to lower managers. He hoped that in this way he can speed up the flow of new products to the market. All of these positive changes have made a significant difference in Campbell’s performance.() Conant’s emotional and intuitive traits help him to focus on the goal. Emotional intelligence helps managers raise the awareness of their performance and build up an organizational competitive advantage. The world has been changing more rapidly than ever before; managers with high emotional intelligence are able to watch for changes and adapt themselves to these changes in the global environment. Moreover, they are capable in taking the
  8. 8. Emotional Intelligence 8 right actions to produce more efficient and effective goods or services to compete with global companies. They understand that although sometimes what has happened is beyond their control, they look at the bright side and remain passionate about their jobs. When they encounter frustration at work, they remain calm and understand the negative aspect is just part of the learning process. Managers with high emotional intelligence feel employees’ pain. They care and listen to the employees’ concerns and worries. On the other side, when employees feel cared and empowered, they are willing to contribute their talent and perform a high level of commitment to the company. Emotional intelligence has the potential to contribute encouraging and supporting creativity and enhance a competitive advantage. Modern information systems and technology has helped organizations achieve a competitive advantage. A good example is the Louis Vuitton handbags and accessories company. All teams work on one product at a time, a team with 24 members produces about 120 handbags per day. Teams are encouraged to suggest improvements, and are kept up to date on product selling prices and popularity. To ensure motivation, team members are given bonuses for their performance. By being involved in all aspects of the goods they produce, employees have the skills and autonomy to ensure that all goods produced live up to the Vuitton brand name (text). The strong sense of awareness in its performance and innovation greatly help Vuitton build up strong competitive advantage. I strongly agree with the emotional intelligence theory. Emotional intelligence is very important and useful to everyone. As you see, emotional intelligence is vital in business sectors. It also helps us do our school work well if we start to develop and improve our emotional intelligence. Moreover, emotional intelligence will help us succeed in our future careers. I am really excited about what I have learned about the emotional intelligence so far and am willing to apply it in my family with my two bright daughters. I would love to see the emotional
  9. 9. Emotional Intelligence 9 intelligence empower their abilities. They become more creative, happy, caring and have strong positive personality to pursue their goals. I would recommend that educators start to nurture students with emotional intelligence and integrate these ideas into their teaching; mothers use emotional intelligence to build up positive and healty relationships with their children and live happily together. Today's leaders have A strong emotional intelligence can help build positive relationships with colleagues and improve performance
  10. 10. Emotional Intelligence 10 The good news is, you can learn or improve your emotional skills ... even in the presence of stress,quot; to have the right values, behaviours and emotions in order to develop and enhance their competitive edge,quot; says Herman. Obviously, it's easy to play leader when the times are easy; but in periods of distress and duress, leaders actually have to lead. After all, true leadership is action, not just a title. empathy-to succeed and excel once on the job. This is particularly true when leading in an uncertain economic environment. Once subordinates become convinced that you care, they will follow your lead and repay you with their trust, their loyalty and their best efforts--in spite of all their worries. Empathy is a lifeline that can pull your team though rough economic waters. As supervisor, it's your job to be the anchor at the other end of the lifeline. 3. Communicate early and often. When times are tough, it pays to open up, not button up. Transparency builds credibility which translates into trust. The worse the economy becomes, the more important it is to keep everyone in the loop. That's why the best supervisors tell employees the truth--all of it. They tell all those involved what's going on, what to expect, what they (individually and collectively) can do about it and what's next. Knowledge is power. Shared knowledge is power multiplied. Full disclosure builds collaboration, credibility, respect, trust and loyalty. These are the secret weapons it takes to survive and thrive in bad times. References
  11. 11. Emotional Intelligence 11 Gareth R. Jones., & Jennifer M. George. (2006). Contemporary management. New York: The McGraw – Hill Companies, Inc. By: Kathleen Cavallo Corporate Consulting Group and Dottie Brienza Formally of Johnson & Johnson Consumer Companies Publication Date: 2001