Chapter 3

Environment and Management

The changing economy Globalization Emphasis on technology Social responsibility and managerial ethics How do organizations make the customer king?

Three Waves of Social Development

Agriculture (up to the 1890s) During the agricultural wave, individuals were their own bosses and were responsible for performing a variety of tasks. Industrialization (about 1900 to the 1960s) People left their fields and moved into formal organizations. Mass production, specialized jobs, and authority relationships became the mode of operation. It gave rise to a new group of workersthe blue-collar industrial workers. Information technology (beginning in the 1970s) The information age has significantly reduced low-skilled, blue-collar jobs in manufacturing, but it has created abundant opportunities for educated and skilled technical specialists, professionals, and other knowledge workers.

Chapter 3 Todays Environment Managers Facing

The changing economy Globalization Emphasis on technology Social responsibility and managerial ethics How do organizations make the customer king?

Globalization
Forms of globalization (Internationalization) Stages of going global Understanding different cultures

Forms of Internationalization
Multinational Corporations (MNCs)
Multinational corporations maintain significant operations in two or more countries simultaneously but are based in one home country .

Transnational Corporations (TNCs)

Transnational corporations maintain significant operations in more than one country simultaneously and decentralizes decision making in each operation to the local country.

Borderless Organization
Borderless organization is a management structure in which internal arrangements that impose artificial geographic barriers are broken down.

Stages of Going Global

Stage
Passive Response

Stage
Initial Overt Entry

Stage
Established International Operations

Foreign subsidiary Joint ventures Licensing/ franchising

Exporting to foreign countries

Hiring foreign Representation or Contracting with Foreign manufactures

Four Dimensions of National Culture

Individualism versus collectivism Power distance Uncertainty avoidance Quantity versus quality of life

Chapter 3 Todays Environment Managers Facing

The changing economy Globalization Emphasis on technology Social responsibility and managerial ethics How do organizations make the customer king?

Emphasis on Technology
Technology and technological advances
Technology includes any equipment, tools, or operating methods that are designed to make more efficient. Technological advances involve the integration of technology into a process for changing inputs into outputs.

E-commerce
E-commerce involves any computer transaction that occurs when data are processed and transmitted over the Internet. It includes three models: B to B, B to C, C to C.

Technology altering ways of jobs

Technology Altering Ways of Jobs

IT has enhanced a managers ability to more effectively and efficiently perform the four primary activities associated with a managers job. With the wide application of IT, work sites tend to be decentralized. Managers are meeting two of biggest challenges : Effectively communicating with individuals in remote locations Ensuring objectives attainment

Chapter 3 Todays Environment Managers Facing

The changing economy Globalization Emphasis on technology Social responsibility and managerial ethics How do organizations make the customer king?

Several Concepts Related to Social Responsibility

Social responsibility
Social responsibility is a business firms obligation, beyond that required by the law and economic, to pursue long-term goals that are good for society.

Social obligation
Social obligation is the obligation of a business to meet its economic and legal responsibilities and no more. It is the foundation of a businesss social involvement.

Social responsiveness
Social responsiveness refers to the capacity of a firm to adapt to changing societal conditions.

Social responsibility

Social responsiveness

Social obligation

Managerial ethics
Ethics Definition:Ethics commonly refers to a set of rules or principles that define right and wrong conduct. Three views of Ethics
Utilitarian view of ethics ( ) Rights view of ethics Theory of justice view of ethics

Code of ethics Code of ethics is a formal document that states an organizations primary values and ethical rules it expects managers and operative employees to follow.

Example:
1916

 T 1908 1916 58% 5 P68

Chapter 3 Todays Environment Managers Facing

The changing economy Globalization Emphasis on technology Social responsibility and managerial ethics How do organizations make the customer king?

Several Critical Activities

Continuous improvements in quality Work process engineering Downsizing (layoff) Flexible and rapid response system The importance of empowerment

Continuous Improvements in Quality TQM

Original idea
Deming emphasized the use of statistics to analyze variability in production processes to create uniform quality and predictable quantity of output.

TQM (total quality management)

TQM is a philosophy of management that is driven by customer needs and expectations and that is committed to continuous improvement.

Components of Total Quality Management

Intense focus on the customer Concern for continuous improvement Improvement in the quality of everything the organization does Accurate measurement Empowerment of employees

Work process engineering(BPR)

Radical or quantum change in an organization
BPR 3C

Downsizing
Downsizing refers to an activity in organizations designed to create a more efficient operation through extensive layoffs. It is not blind. Downsizing must link staffing levels to organizational goals, which is called rightsizing.

Understanding
Reasons of layoff Advantages and disadvantages Methods

Flexible staff arrangement

Contingent workforce: workers who are available for hire on an as-needed basis, including part-time employees, temporary employees and contract workers. Core employees: the small group of full-time employees of an organization who provide some essential job tasks for the organization.

Why the organizational emphasis on contingent employees?

Having a large number of permanent full-time employees limits managements ability to react. Organizations that rely heavily on contingent workers will have greater flexibility because workers can be easily added or taken off as needed.

Thinking Problem
What issues do contingent workers create for managers?

The Importance of Empowering

Empowering is the redesigning of jobs in order to increase the decision-making discretion of work.

Reasons:
The need for quick decisions by those people who are most knowledgeable about the issues. The large layoffs in the middle-management ranks have left many managers with considerably more people to supervise than they had in the past.

Study &Practices
What stages enterprises experience in the process of globalization? Understand Hofstedes cultural dimension Why social responsibility and ethics is important for an organization? Understand TQM Why the organizational emphasis on contingent employees? Why empowering is important in this time?