Topic 2 mp_integrative_managerial_issues

Copyright ©2013 Pearson Education 3-1

2Chapter

Integrative Managerial Issues

Learning Objectives

• Explain globalization and its impact on organizations.

• Discuss how society’s expectations are influencing managers and organizations.


Learning Objectives (cont.)

• Discuss the factors that lead to ethical and unethical behavior in organizations.

• Describe how the workforce is changing and its impact on the way organizations are managed.


Globalization and Its Impact


What Does It Mean to Be “Global”?Global organizations:

• Exchange goods and services with consumers;

• Employ managerial and technical employees; or

• Use financial sources and resources

from other countries.


Types of Global Organizations

• Global village – A world without boundaries where goods and services are produced and marketed worldwide

• Multinational corporation (MNC) business – Any type of international company that maintains operations in multiple countries


Types of Global Organizations (cont.)

• Multidomestic corporation – An MNC that decentralizes management and other decisions to the local country where it’s doing business

• Global corporation – An MNC that centralizes management and other decisions in the home country


Types of Global Organizations (cont.)

• Transnational (borderless) organization – A structural arrangement for global organizations that eliminates artificial geographical barriers


How Do Organizations Go Global?



• Global Sourcing– Purchasing materials or labor from around the

world wherever it is cheapest• Exporting

– Making products domestically and selling them abroad

• Importing– Acquiring products made abroad and selling them

domestically



• Licensing– An agreement primarily used by manufacturing

businesses in which an organization gives another the right, for a fee, to make or sell its products, using its technology or product specifications

• Franchising– An agreement primarily used by service

businesses in which an organization gives another organization the right, for a fee, to use importing its name and operating methods



• Global Strategic Alliance– A partnership between an organization and a

foreign company partner(s) in which resources and knowledge are shared in developing new products or building production facilities

• Joint Venture– A specific type of strategic alliance in which the

partners agree to form a separate, independent organization for some business purpose



• Foreign Subsidiary– A direct investment in a foreign country that

involves setting up a separate and independent facility or office


Managing in a Global Organization


Managing in a Global Organization (cont.)

Analyzing cultural differences according to Geert Hofstede’s framework:

1. Power distance2. Individualism vs. collectivism3. Quantity of life vs. quality of life4. Uncertainty avoidance5. Long-term vs. short-term orientation


1. Hofstede’s Framework

• Geert Hofstede– Studied differences in culture and found that

managers and employees vary on five value dimensions of national culture:

1.Power Distance – degree to which power is distributed unequally

2.Individualism vs. Collectivism - the degree to which people in a country prefer to act as individuals/as members of groups


Hofstede’s Framework

3. Achievement vs. Nurturing – value achievement, competition vs. value relationship, welfare of others

4. Uncertainty Avoidance – in which people in country prefer structured over unstructured situation

5. Long-term vs. Short-term Orientation – value thrift and persistence vs. past and present, emphasizes respect for tradition


Managing in a Global Organization (cont.)

The Global Leadership and Organizational Behavior Effectiveness research program (GLOBE) studies cross-cultural leadership behaviors.


2. GLOBE’s 9 Dimensions of Cultural Difference

• Global Leadership and Organizational Behavior Effectiveness (GLOBE)– An ongoing cross-cultural investigation of

leadership and national culture– Identified nine dimensions on which national

cultures differ– Confirm that Hofstede’s dimensions are still valid,

and extend his research rather than replace it


Society’s Expectations


Social ResponsibilitySocial responsibility refers to a company’s intention to do the right things and act in ways that are good for society.


Should Organizations Be Socially Involved?


The Importance of Sustainability

Sustainability is a company’s ability to achieve its business goals and increase long-term shareholder value by integrating economic, environmental, and social opportunities into its business strategies.


The Changing Workforce

Diversity is visible in age, gender, race, physical attributes, styles of dress, and personality type.


Workplace Diversity

Workforce diversity is defined as the ways in which people in an organization are both different from and similar to one another.


Types of Diversity


For example: diversity• Age of the population is shifting critically in the workforce. With

many baby boomers still employed and active, managers must ensure that those employees do not face discrimination.

• Gender diversity issues are still prevalent as women and men now each make up almost half of the workforce, especially with regards to gender pay gap, career start and progress, and misconceptions about women’s performance as compared with men’s.

• Race is the biological heritage (including physical characteristics such as one’s skin color and associated traits) that people use to identify themselves. Ethnicity refers to social traits, such as one’s cultural background or allegiance, that are shared by a human population.


Adapting to a Changing Workforce

• Family-Friendly Benefits – Benefits that provide a wide range of scheduling

options that allow employees more flexibility at work, accommodating their needs for work/life balance

• Contingent Workforce– Part-time, temporary, and contract workers who

are available for hire on an as-needed basis


• Generational Differences Managing generational differences • what is appropriate office attire• What about technology - Gen Y content to

meet virtually to solve problem, baby boomer expect important problems to be solved with in-person meeting


Topic 2 mp_integrative_managerial_issues

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