Chapter 12 new concepts and trends in management

NEW CONCEPTS AND TRENDS IN

MANAGEMENT

CHAPTER-12

AUTHORS:DR. K IRAN NERKARDR. VILAS CHOPDE

Entrepreneurship is about taking risks and the behavior of the entrepreneur reflects a kind of person who wishes to put his career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture. ---- Frank H. Knight and Peter Drucker

The function of foreseeing investment and production opportunity, organizing an enterprise to undertake a new production process, raising capital, hiring labor, arranging for the supply of raw materials, and selecting to managers for the day-to-day operation of the enterprise. ---- Benjamin Higgins

DEFINE ENTREPRENEURSHIP

© 2011, Dreamtech Press :: Chapter 12 2

Raises productivity through technical and other forms of innovation

Generates employment opportunities by establishing new enterprises

Facilitates the transfer of technology Plays a strategic role in commercializing new inventions and

products Facilitates the proper uti l ization of resources Improves the standard of l iving Plays a crucial role in the restructuring and transforming economy Facilitates a balanced economic development Brings dynamism in industries by launching innovative products

and services Creates new markets and facilitates expansion into international

markets

SIGNIFICANCE OF ENTREPRENEURSHIP


An entrepreneur is the agent who buys means of production at a certain price in order to combine them into a product that is going to sell at prices that are certain at the moment at which he commits himself to his costs. ---- Richard Cantillion

Entrepreneurs are people who have the ability to see and evaluate business opportunities together with the necessary resources to take advantages of them and to intimate appropriate action to ensure success. ---- International Labor Organization

DEFINE ENTREPRENEUR


Creativity Innovation Dynamism Risk Taking and Decision Making Ability Self-Motivation Self-Confidence Time Management Persistence Problem Solving Flexibility Vision Leadership Technical Knowledge

TRAITS AND CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR


Globalization has special meaning within Proctor & Gamble. It means that we will continue to change from a United States based business into a truly world company. A company that thinks of everything it does in terms of the entire world. ---- CEO of Procter & Gample, Edwin Artzt

Globalization is the process of whereby the world’s people are becoming increasingly interconnected in all facets of their lives cultural, economic, political, technological, and environmental. ---- Lodge

DEFINE GLOBALIZATION


• Involves large research and development cost incurred on a new product.

New Product Development Cost

• Reduces the overall cost of production in an organization.

Cheap Labor and Economies of Scale

• Refers to transferring the expertise and experience from one country to another country.

Experience Transfer

• Acts as an important force. The organizations that are in the declining stage in one country enter into another country to get into the introduction or growth stage.

Product life cycle consideration

ORGANIZATION-SPECIFIC FORCES OF GLOBALIZATION


CompetitionForces the organizations to go global. If an organization cannot increase its sale because of tough competition in the domestic market, then it can venture into global market to increase its sale.

TechnologyHelps organizations to lower their overall cost of production.

BUSINESS-SPECIFIC FORCES OF GLOBALIZATION


• Arises in an organization due to its in depth understanding of cultures and behavior of customers and competitors across the globe.

Competitive Advantage

• Refers to the one of the most important advantage of global organizational behavior.

Diverse Culture Management

• Involves analyzing the processes and characteristics of formal organizations that influence the modern societies, to develop business strategies.

Organizational Analysis

• Examines how individuals interact and justify their relationships under conditions of power and resource inequalities across societies.

Cultural Analysis

STRATEGIC IMPORTANCE OF GLOBAL ORGANIZATIONAL

BEHAVIOR


Managers should work toward balance between short and long-term thinking, listening and speaking. Similarities and diversity need to coexist as well. It is time to listen to others, to listen to ones self, and to challenge the imbalances existing today. ---- Newstrom

The concept of diversity encompasses acceptance and respect. It means understanding that each individual is unique, and recognizing our individual differences. These can be along the dimensions of race, ethnicity, gender, sexual orientation, socio-economic status, age, physical abilities, religious beliefs, political beliefs, or other ideologies. ---- Queens Borough Community College

DEFINE ORGANIZATIONAL DIVERSITY


Demographic Factors

Refer to the factors, such as race, age, color, and gender of employees,

which make the workforce of an

organization diverse.

Globalization

Provides an opportunity to

organizations to enter in other

countries.

Government Policies

Oppose any type of

discrimination in any field,

whether in society or

businesses.

High Competitio

n

Compels the organizations to

look for new, innovative, and fresh ideas to

gain edge over competitors.

FACTORS RESPONSIBLE FOR ORGANIZATIONAL DIVERSITY


Commitment of senior managementRefers to the assurance of top management to promote and support diversity. Linking Diversity with Strategic PlanRefers to integrating the diversity with the organizational plans and goals.

Involvement of employeesHelps in reducing their feelings of suspicion and uneasiness regarding the diversity program.

MEASURES TO MANAGE DIVERSITY


Ethics is a moral philosophy that guides individuals to decide what is wrong or right, good or bad, and what comprises desirable behavior in a particular set of social circumstances.

Business ethics is defined as written or unwritten codes of principles and values that guide decisions and actions within organizations.

It helps organizations decide the actions which are legally and morally right.

The aim of an organization should be to follow a code of ethics based on logic, facts, and general acceptability.

BUSINESS ETHICS


When organizations involve in global business, ethical issues arise mainly due to different political systems, law, economic development, and culture of nations.

Ethical issues in the global or international business setting are mainly related to employment practices, human rights, environmental regulations, corruption, and other moral duties of global organizations.

INTERNATIONAL BUSINESS ETHICS


Primary Factors

• Refer to the factors that comprise external stimuli and compel people to move in a particular direction without thinking about ethical parameters.

Personality Factors

• Refer to the prominent characteristics of an individual.

Defensive Factors

• Refers to the attempts of an individual to find easy ways to escape from an act of violation of a law or a duty.

CAUSES AND ISSUES OF UNETHICAL BEHAVIOR


CSR refers to the obligation of an organization towards the society.

Some of the important objectives of CSR are as follows: Protecting the environment and community from harmful

effects of industrial operations, such as dumping of hazardous waste materials and emission of noxious gases

Making contribution to the society, in return of the services and resources provided by the society to the enterprise

Gaining the social power in the society to sustain in the market for a longer period

Converting the threats of the environment into an opportunity for the business with the help of gaining trust of the public by the way of CSR activities

Sharing the responsibility of the government to alleviate social problems

CORPORATE SOCIAL RESPONSIBILITY (CSR) AND ITS

IMPORTANCE


Improving relationship with stakeholders Refers to the fact that CSR activities help an organization to

develop the relationship with stakeholders. Attracting the investors

Refers to draw the attention of investors through CSR activities.

Improving financial performance Refers to enhance the financial performance of an

organization through CSR activities. Increasing public credibility

Refers to improving the credibility of an organization through CSR activities.

Utilizing the resources effectively Refers to the optimum usage of scarce resources.

BENEFITS OF CSR


Lack of Transparency Imposes a major hindrance in the authentic implementation of CSR programs when

organizations do not disclose the information regarding the CSR programs and funds allocated to implement these programs.

Lack of Community Participation Hinders the prospect of CSR activities.

Lack of Non-Governmental Organizations (NGOs) Leads to a lack of CSR activities as these activities are largely implemented

through NGOs. Lack of CSR Guidel ines

Implies that many countries do not have clear guidelines related to CSR activities. Narrow View towards CSR Initiatives

Refer to the limited perception of an organization towards CSR activities. Importance to Visibi l i ty Factor

Implies that sometimes NGOs involve themselves in the CSR programs to gain the media attention but fail to achieve the goals at the grass root levels.

Lack of Budget Poses a major constraint for organizations that wish to practice CSR activities.

CHALLENGES FACED BY AN ORGANIZATION IN CSR

IMPLEMENTATION


TQM aims at minimizing errors occurred at the time of producing goods and providing services.

TQM includes the following three aspects: Meeting Requirements of Consumers and Customers

Refers to producing standard quality goods and services to fulfill the needs of the customers and consumers

Continuous Improvement Refers to continuous upgrading quality and product standards

Employee Involvement Refers to encouraging participation from all employees working

at any level

TOTAL QUALITY MANAGEMENT(TQM)


Including quality assurance in the objectives and policies of an organization

Developing a clear understanding of the TQM concept among all the employees in the organization

Encouraging the participation of all the employees in maintaining and improving quality

Designing the TQM program to fulfill the requirements of the customers

Acknowledging the areas and processes where managers can implement TQM

IMPLEMENTATION OF TQM


Quality circle is a quality control and problem solving approach used by the grass-root level employees in an organization.

The effectiveness of a quality circle can be improved by adhering to the following guidelines: Encouraging all employees to contribute in quality

improvement Training the members of the quality circles Developing a problem-solving approach among all members Encouraging participation and providing freedom to discuss

a problem and suggest corrective measures Securing top managements’ trust to run the meetings of

quality circles smoothly

QUALITY CIRCLE


Quality of Work life (QWL) can be defined as the quality of correlation between employees and their total work environment.

A process by which an organization responds to employee needs for developing mechanisms to allow them to share fully in making decisions that design their lives at work. --- Walton

CONCEPT OF QUALITY OF WORK LIFE (QWL)


Attitude of the employee

Fair compensation and job security

Personal and career growth opportunitiesBalance between personal and

professional lifeNature of job

Level of stress

Risk and reward

Participative style of leadership

Career prospects

Fun at workplace

Alternative work arrangement techniques

EIGHT CRITERIA/CHARACTERISTICS THAT INFLUENCE QWL


The growing complexities and dynamic changes in the business environment are giving way to the development of new trends in management.

For example, globalization has completely changed the way of conducting businesses.

CSR is an approach that seeks to address various ethical, social, and environmental concerns of an enterprise.

Ethics is a moral philosophy that guides individuals to decide what is wrong or right, good or bad, and what comprises desirable behavior in a particular set of social circumstances.

It aims at identifying unjust business practices and their impact on an enterprise.

RECAP


Chapter 12 new concepts and trends in management

Education

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