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Running head: LEADING AND MANAGING PEOPLE IN ORGANIZATIONS
LEADING AND MANAGING PEOPLE IN ORGANIZATIONS
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Table of Contents
Introduction......................................................................................................................................2
Question 1 - Summary of key arguments raised in chapters of the book named “The Halo Effect”
.........................................................................................................................................................2
Question 2 - Critical discussion of possibility of the public companies to achieve financial and
social goals.......................................................................................................................................6
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

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Introduction
Halo Effect can be defined as the term for favoritism of the consumers towards line of the
products due to the positive experiences that have been provided by the other products of the
same organization. Halo effect is mainly correlated to the aspects of brand loyalty and brand
strength and is also able to contribute to the brand equity. Halo effect can be created by the
organizations in order to enhance their visibility and the positive experiences that are provided to
the customers as well. When the consumers are provided with positive experiences by the brands
that are highly visible, the loyalty of customers are increased towards the brand (Burke, Dowling
and Wei 2018).
The report will be based on the analysis of arguments that have been raised in six
chapters of the book named “The Halo Effect” by Rosenzweig. The importance of Halo Effect in
the current business environment will also be discussed in the report in detail. Critical discussion
will be completed based on the possibility of public companies to achieve both the social and
financial goals as well. The examples will be provided from real life business based environment
in order to analyze the operations and processes of public companies.
Question 1 - Summary of key arguments raised in chapters of the book named
“The Halo Effect”
“The Halo Effect” by Rosenzweig is able to provide the detailed analysis of the concept
with the help of different examples of organizations that have implemented this process. The
chapters that have been chosen for the analysis mainly include Chapters 1, 4, 5, 8, 9 and 10.
Chapter 1 - The example of Lego, a Danish toy company has been considered for the
purpose of explaining the impact of the Halo effect. The failure that had been faced by Lego due

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to its over-dependence on the production and manufacture of spin-offs like the Harry Potter
figures has been discussed in the chapter. The sales of Lego had also gone down and this had an
impact on the position of the firm in the industry. The arguments that have been raised in the
chapter are mainly based on the six dimensions of expansion of the activities of an organization
that include new channels, new geographies, new customer segments, new value chain steps,
new products and new businesses (Read.amazon.com 2020). The major reason behind failure of
Lego in the industry was mainly based on the focus of the organization on the production of
building blocks for children. The changes in consumer needs have led to the huge drop in the
sales of Lego. The brand strategy of the organization has also been discussed by the author in
this chapter. The example of Nokia has also been discussed in order to support the arguments
that the author has raised. The leadership of Nokia in the mobile phone industry and the changes
in consumer needs of the industry has been analyzed in the chapter (Read.amazon.com 2020).
Chapter 4 – The chapter provides details related to the different types of halo effect that
have an impact on the individuals and different organizations as well. Halo effect has been
defined as the tendency related to the formation of inferences about different traits. The example
of President Bush has been taken into consideration for the purpose of understanding different
types of Halo effect. The customer service related activities that are performed by different
organizations and their influence on the levels of customer satisfaction have been discussed in
the chapter (Read.amazon.com 2020). Halo effect has also been considered to be a method of
proper reduction of cognitive dissonance. Financial information is not considered to be the only
data that is used for the purpose of analyzing the organizational activities. Communication and
group performance are also considered to be highly important. Halo effect is able to shape the
attributions that people have about the organizations (Read.amazon.com 2020).

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Chapter 5 – The chapter is able to provide details about the ways by which Halo effect is
able to shape different topics in the business. The influence of Halo on the research and
development activities of the organizations have also been discussed in the chapter in detail. The
link between high performance and customer orientation is a major part of the discussion. Halo
of corporate culture and its impact on the organizational performance is discussed in the chapter
as well. The chapter has been able to depict that the corporate culture has a major impact on the
long term based economic performance of the organizations (Read.amazon.com 2020).
Chapter 8 – The chapter has mainly discussed the impact of Halo effect on the data of
individuals who are a part of different organizations. The impact of Halo effect on the
performance of different organizations has been analyzed in the chapter in detail. The examples
of Nick Bloom and Stephen Dorgan have been taken into consideration for the purpose of
understanding the impact of different management practices on the performance levels of the
company (Read.amazon.com 2020). More than 700 companies have been analyzed for the
purpose of understanding the impact that management practices have on the performance levels.
The variance in performance levels of the organizations has been related to the management
practices that are implemented (Read.amazon.com 2020).
Chapter 9 – The chapter is based on the delusions that are able to influence the thinking
of individuals based on the performance levels of the company. The relationship between
satisfaction of employees and high performance has been discussed in the chapter in detail.
Customer focus and leadership based aspects have also been taken into consideration for the
purpose of analyzing the performance levels of different organizations. Leadership has been
considered as an important factor that is able to influence the communication skills and
performance of employees as well. The uncertainty that is a part of the business performance of

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different organizations has been linked with the strategies that have been implemented
(Read.amazon.com 2020). The strategic choice of the organizations are based on the competition
that is faced in their respective industries.
The competitiveness of the industry is able to play a major role in proper development
strategies that are implemented in organizational processes. The growth of many organizations is
mainly based on the acquisitions and mergers that have been made by them in different parts of
the world. Innovation has also been able to play a major role in enhancing the expansion levels
of the organizations (Read.amazon.com 2020). The execution of strategy is also considered to be
a major factor that has an impact on the organizations and their effective performance as well.
The strategic choice is also able to influence the operations of different organizations and their
position in the industry as well. Customer preferences have also been considered important
factors that have influenced the strategic choice of modern organizations. The execution of
strategy takes place within the organizations and can define the work processes of employees as
well (Read.amazon.com 2020).
Chapter 10 – The chapter mainly deals with the internationalization of organizations and
their operations after the process has taken place. Greater levels of understanding and knowledge
have an impact on the probabilities that are a part of the international operations. The managers
who are provided with the responsibility of managing the international activities of firms are
under immense levels of pressure and they often take help from the books. The example of the
chief executive of Microsoft Steve Ballmer has been taken into consideration for the purpose of
understanding the internationalization concept (Read.amazon.com 2020). The challenges that
were being faced by Microsoft from Yahoo and Google have been able to influence the strategies
that are developed by Steve Ballmer. However, even after implementation of different strategies

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the revenues of Microsoft had fallen in a huge manner from 36% to around 8%. The chapter has
also discussed that no exact formula is available for the managers to implement in the
organizational operations. The development of strategies is totally based on the external
environment and the changes that take place in the environment as well (Read.amazon.com
2020).
The example of Robert Rubin can also be considered for the purpose of analyzing the
ways of managing an organization after the process of internationalization has taken place.
Robert Rubin is mainly known in the industry for the eight years that he had spent in Clinton
Administration. Probabilistic thinking has been an important part of the intellectual construct
formed by Robert Rubin. The chapter has thereby provided a clear picture based on the ways by
which probabilistic thinking is able to influence the operations of different organizations and the
activities of managers as well (Read.amazon.com 2020).
Question 2 - Critical discussion of possibility of the public companies to
achieve financial and social goals
The public organizations that have distributed ownership are not easily able to achieve
the social and the financial goals at the same time. The profit companies develop different goals
related to the social responsibilities and these goals are influenced in a negative manner if the
stakeholders do not receive effective returns. The balance that has to be maintained by the
organizations between financial and social goals is considered to be highly important for the
purpose of maintaining its position in the industry (Polman 2014). The social businesses and the
non-profit organizations however provide much more importance to social goals in comparison
to the financial viability of operations. The agency theory can be implemented for the purpose of

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understanding the relationship between shareholder value and the agency problem. The two
major themes that are a part of the financialisation literature include perspective of shareholder
value and the control of capital as well. The entrepreneur is considered to be a major part of the
financial and operational decisions that are implemented by the organizations (Sroufe 2017).
The proper alignment of the conflicting interests of managers and the owner-shareholders
are able to provide a solution to the agency problem. The economic theories can be implemented
for the purpose of understanding the ways by which organizations aim at developing and
maintaining their balance with respect to their social responsibilities and financial viability as
well (Hbr.org 2020). The irrelevance of incentive problem has also been discussed by the
economists in different parts of the world. The capital market on the other hand has the ability to
discipline managers in an effective manner. The economists like Jensen have also believed in the
role that is played by capital market in enhancing the discipline of managers in various
organizations. The revolutionary changes that have taken place in capital markets and product
markets have an impact on the role played by the market to enhance corporate control (Wang and
Sarkis 2017).
The pay for performance contracts that align the interests of shareholders and managers
are developed for the purpose of solving the agency conflict. The public organizations with
distributed ownership thereby have to fulfil the needs of shareholders in order to maintain their
operations and profitability levels in the industry as well (Eldar 2017). Business ethics are
however an important part of the position that is maintained by an organization in the industry.
Ethics are considered to be an important aspect related to the proper fulfillment of social
responsibilities of the organizations. The standards or principles that can guide the business

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organizations are considered to be an important part of the business ethics (Mayer and Roberta
2017).
The strategic paradoxes are able to influence operations of modern organizations in a
huge manner and the leaders need a major resolve in order to manage the paradoxes. The
framework of paradoxes have to be designed carefully in order to provide support the leaders.
The organizational guardrails are mainly designed for the purpose of ensuring that the parties
which have less power are supported by the parties that have more power (Sahasranamam, Arya
and Sud 2019). The proper usage of resources for development effective decisions can play a
major role in improving the organizational operations. The steps that are implemented by
organizations in order to fulfil social responsibilities are not able to provide profits to them. The
organizations that are financially sustainable and mission driven in nature can operate effectively
with the help of dynamic decision making process (Ghanbari et al. 2018).
The profit companies find it quite important to revise or change the decisions when the
problems emerge and the new opportunities that arise in the industry. The fast growth of
organizations is mainly based on the decision that is made by the CEO to employ the leaders
who have effective levels of expertise related to marketing and operational activities as well
(Edelman 2016). The core strengths of the firm have been able to influence the efficiency and
growth of different organizations. Employee development can however lead to the change in
direction of organizations and the aggressive growth based goals are also pulled back. The
dynamic shift of an organization with time is able to emphasize the culture and business
operations as well (Faller and zu Knyphausen-Aufseß 2018).
The primary responsibilities of a CEO of any major organization is based on proper
development of the financial goals that have been set by the management and the strategy that is

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implemented as well. The goals of an organization are mainly imposed by the shareholders
through the stock market based responses to performance of the organization. Organizational
goals are considered to be tangible and visible and the return on investment received by
shareholders is able to impact the growth in levels of sales (Kotlar et al. 2018). The successor of
the CEO is able to develop a different vision of business operations and the formation of a
sustainable competitive position is also considered to be highly important. Corporate growth is
considered to be more important in comparison to the return on investment that is provided to the
shareholders (Luong, Jorissen and Paeleman 2019).
The corporate strategy that is implemented by organizations is mainly based on the
growth that they can gain in their respective industries. The decline in growth can have a
negative impact on the perceptions that have been developed by the shareholders regarding the
organizational operations. Competition on the other hand has the ability to erode the position that
is developed by an organization in the industry. The organizations can maintain a huge share in
the market with the support that is provided by the shareholders and the return on investment that
they are receiving (Ng and Su 2018). The companies however do not provide their entire efforts
in the proper achievement of financial goals. The priorities of firms tend to change with respect
to changes that have taken place in the external environment and business activities. The mature
organizations aim at assigning priorities to the different financial goals with respect to relative
power that has been gained by the economic constituencies. The product or capital markets or the
human resource market related factors have an impact on the strategies that are formed by the
organizations (Faller and zu Knyphausen-Aufseß 2018).
Proper management of the financial goals of an organization is considered to be an
unending process based on the competition in the market and the conflicting priorities that have

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to be balanced as well. The system is considered to be potentially unstable in the changing
corporate or business environment and the shift in influence and power among the
constituencies. The example of Unilever can be considered for understanding the importance that
is provided by the organization to proper fulfilment of the social responsibilities of organizations
(Haldane 2015). Unilever has developed different strategies and policies that are related to
proper enhancement of social responsibilities or position in the FMCG or fast moving consumer
goods industry. The organization has implemented sustainable sourcing methods in order to
reduce the impact of its manufacturing and production process on the external environment. The
organization has thereby gained immense levels of success in balancing the social and financial
goals as well. The corporate growth of the firm is also influenced in a positive manner by the
proper achievement of different goals (Sahasranamam, Arya and Sud 2019).
On the other hand, the example of Primark can be considered in order to understand the
impact that the inefficient operations of the organization related to corporate social responsibility
have on the image that is formed in the retail industry. Primark had not provided effective work
environment to the employees who are a part of the production facilities in Rana Plaza. The
collapse of Rana Plaza had a major negative impact on the corporate image that is formed by the
organization (Theguardian.com 2020). Primark had provided importance to the reduction of
production costs with the help of its production facilities that have been formed in an emerging
country like Bangladesh. The lack of proper fulfillment of the social goals by Primark had a
negative influence on the perceptions of customers. The low priced products and strategies of
Primark had also not been able to support the proper maintenance of position of the firm in the
highly competitive retail industry (McMullen and Warnick 2016).

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Conclusion
The report can be concluded by stating that Halo Effect has a major impact on the
position and image that an organization has been able to form in the industry. The perception of
customers related to the organization is also considered to be a major factor that is influenced by
Halo effect. The second part of the report has been able to depict that the public organizations
need to maintain their position with the proper fulfillment of the social as well as the financial
goals. The social goals support an organization to form a positive image in the industry and on
the other hand the financial goals can enhance the returns that are provided to shareholders on
the levels of investments. The examples of two major organizations have also suggested that the
financial and social goals can help them to maintain their position in their respective industries.

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References
Burke, P.F., Dowling, G. and Wei, E., 2018. The relative impact of corporate reputation on
consumer choice: beyond a halo effect. Journal of Marketing Management, 34(13-14), pp.1227-
1257.
Edelman., 2016. Edelman Trust Barometer 2019, available at:
https://www.edelman.com/sites/g/files/aatuss191/files/2019-
02/2019_Edelman_Trust_Barometer_Global_Report.pdf
Eldar, O., 2017. The role of social enterprise and hybrid organizations. Colum. Bus. L. Rev.,
p.92.
Faller, C.M. and zu Knyphausen-Aufseß, D., 2018. Does equity ownership matter for corporate
social responsibility? A literature review of theories and recent empirical findings. Journal of
Business Ethics, 150(1), pp.15-40.
Ghanbari, M., Esmaeili, F., Bargi, Z., Besati, M. and Mozaffari, S., 2018. Social responsibility,
financial performance and institutional ownership reporting. Journal of Advanced Pharmacy
Education & Research| Oct-Dec, 8(S2).
Haldane, A. G., 2015. “Who owns a company?” Speech given at the University of Edinburgh
Corporate Finance Conference 22 May 2015, available at:
https://www.bankofengland.co.uk/speech/2015/who-owns-a-company
Hbr.org 2020. Financial Goals and Strategic Consequences. [online] Harvard Business Review.
Available at: https://hbr.org/1985/05/financial-goals-and-strategic-consequences [Accessed 2
Mar. 2020].

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Kotlar, J., De Massis, A., Wright, M. and Frattini, F., 2018. Organizational goals: Antecedents,
formation processes and implications for firm behavior and performance. International Journal of
Management Reviews, 20, pp.S3-S18.
Luong, T.C.T., Jorissen, A. and Paeleman, I., 2019. Performance Measurement for
Sustainability: Does Firm Ownership Matter. Sustainability, 11(16), p.4436.
Mayer, N.Z. and Roberta, A.G., 2017. Social movement organizations: Growth, decay, and
change. In Social Movements in an organizational society (pp. 121-142). Routledge.
McMullen, J.S. and Warnick, B.J., 2016. Should we require every new venture to be a hybrid
organization?. Journal of Management Studies, 53(4), pp.630-662.
Ng, S.M. and Su, X., 2018. An investigation into the correlates of collective psychological
ownership in organizational context. Cogent Psychology, 5(1), p.1470484.
Polman, P., 2014. “Business, society, and the future of capitalism”, available at:
http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-
insights/business-society-and-the-future-of-capitalism
Read.amazon.com 2020. Cloud Reader. [online] Read.amazon.com. Available at:
https://read.amazon.com/ref=kcr_app_surl_cloudreader [Accessed 2 Mar. 2020].
Sahasranamam, S., Arya, B. and Sud, M., 2019. Ownership structure and corporate social
responsibility in an emerging market. Asia Pacific Journal of Management, pp.1-28.
Sroufe, R., 2017. Integration and organizational change towards sustainability. Journal of
Cleaner Production, 162, pp.315-329.

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Theguardian.com 2020. Primark to pay £6m more to victims of Rana Plaza factory in
Bangladesh. [online] the Guardian. Available at:
https://www.theguardian.com/world/2014/mar/16/primark-payout-victims-rana-plaza-bangladesh
[Accessed 2 Mar. 2020].
Wang, Z. and Sarkis, J., 2017. Corporate social responsibility governance, outcomes, and
financial performance. Journal of Cleaner Production, 162, pp.1607-1616.