• The Scenario

Grander Stokes is the new CEO of PrimeDrive Corporation. Stokes prides himself on his hard-driving management style. At the first management meeting, he asked two of the managers to stand. Then he fired them on the spot, just to show everyone who was in control of the company. At the budget review meeting that followed, he ripped up the departmental budgets that had been submitted for his review and ordered everyone to submit new budgets calling for at least a 40% increase in sales volume. He announced that he would not accept excuses for results that fell below budget.

1. What are the behavioral consequences of the way the CEO is using his power?
2. What is the likely outcome of the new budgets? Explain your answer.
3. How could Stokes motivate his staff differently?