Final Exam Study Guide
Final Exam Study Guide MGT 111
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This 25 page Study Guide was uploaded by Mollie Baruch on Tuesday May 3, 2016. The Study Guide belongs to MGT 111 at Rutgers University taught by Denis Hamilton in Spring 2016. Since its upload, it has received 24 views. For similar materials see Introduction to Management in Business, management at Rutgers University.
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page 1 Introduction to Management Final Study Guide Part 4 Performance Management 1. Performance Management Overview (Session 15) 2. Performance Management Core Elements: a. Process Management (Session 15) b. Business Assessment/Measurement (Session 15) c. Business Improvement (Session 16) 3. Risk Management (Sessi n 16) 1. PERFORMANCE MANAGEMENT OVERVIEW (Session 15) ● Performance Management : the ongoing assessment and improvement of key business processes in order to drive superior results (focuses on capabilities and processes) ○ goal: to improve asterand bette than competition 2. PERFORMANCE MANAGEMENT CORE ELEMENTS (3): A. Process Management (Session 15) ● Key Elements (DMAI 2C) ○ D efine use flowcharts to identify customers, suppliers, and those who perform key steps in the process (SIPOC Model) ○ M easure create outcome measures and predictive measures that allow complete understanding of process performance ○ A nalyze use the measures and process maps to understand the performance of the process vs. goals and benchmarks ○ Improve/Innovate make improvement a routine activity using basic/advanced tools & methods ○ C ontro make sure the process and improvements continue to provide consistent, predictable performance ● Process Mapping: 1. used to escribe the proces visually 2. clarifies thsteps/sequence in the process 3. clarifiewho performs each step 4. clarifiehow the work flows through the organization 5. identifieswhere the key linkages ar with other parts of the organization 6. helps toidentify areas for improvement B. Business Assessment/Measurement (Season 15) ● business assessment : comprehensive evaluation of business performance and business process management against a core set of fundamental business excellence criteria ● Business Excellence Criteria Categories: 1. Key Role of Leadership a. create clear vision and direction for the business b. build capabilities for future success while delivering current results 2. Customer Focus a. design, develop and deliver products and services to create true value for customer that is superior to competitive options 3. Process Management/High Performance Environment a. use a processbased view of work that integrates multiple functions working in collaboration 4. FactBased Management & Evaluation a. use a system of balanced measures b. include outcome and driver metrics that are both leading and lagging indicators of performance c. benchmark against standards of excellence as well as competitors 5. Improvement & Innovation page 2 a. use proven improvement methodologies b. use highly competent improvement experts c. seek to find new, innovative ways to create value 6. Continuous Assessment & Renewal a. use comprehensive criteria to assess business b. develop clear strategies to sustain and enhance business results in the future c. align plans, policies and practices to support these strategies ○ Business Assessment Process: Key Components of Value Chain i. Leadership ii. Product Development iii. Demand Generation iv. Supply Chain v. Organization & People vi. Compliance ○ The WellDressed Measure! i. Clear description ii. Clearly labeled iii. Provided comparisons iv. Identifies the owner v. Indicates the date vi. Current improvement initiatives vii. Current performance status C. Business Improvement (Session 16) ● Business Improvement : the creation of an improvement oriented culture and management process that utilizes improvement experts and proven methodologies/tools to achieve superior levels of performance ● Consists of 3 core elements: ○ Role of Leadership ■ Establish Priority ■ Appoint Experts ■ Provide Resources ■ Imbed in Culture ■ Review Progress ■ Recognize Results ○ Experts & Training ■ Hire Experts ● Business Improvement Leader – Experienced in working with business leaders to identify improvement opportunities and establishing effective improvement project management system and training system ● Master Black Belt – Expert and experienced in process, methods, and tools used in improvement projects. Experienced training and coaching Black Belts and Green Belts (project leaders) ● Black Belt – Demonstrated expertise in managing multiple successful improvement projects using the methodologies and tools ● Green Belt – Trained in using methods and tools with only one successful project completion ■ Train Organization ● Train al management teams in the core concepts of Performance Management including Business Improvement ■ Imbed in Culture page 3 ■ Train New Experts ■ Assist Project Selection ■ Monitor Projects ■ Deliver Results ○ Proven Methodologies/Tools ■ PDCA (Plan, Do, Check, Act): an iterative fourstep management method used for the control and continuous improvement of processes and products (Deming Circle) ■ Six Sigma: utilize advanced statistical methods to improve quareducing defects and variability in the performance of business processes by usDMAIhC methodology ● Six sigma = 3.4 defects/million opportunities ■ Lean ● Goal: eliminate waste in value creation process ● Waste: anything that does not create value for customers ■ DFSS (Design for Six Sigma:used todesign new processes(new products/services) and seeks to avoid manufacturing/service process problems by using advanVoice of the Customer (VOC) techniques and propersystems engineeringtechniques to avoid process problems at the outset. It utilizDMADV methodology ● (DefineMeasure,Analyze sign,Verify) ■ BPR (Business Process Reengineering): involv radically redesign and streamlining how an activity is performed, with the intent of achieving quantum improvements in performance ■ Control Charts: used to measure whether a process is in control (allows modest variation around a defined performance target) ■ VSM (Value Stream Maps): used to depict and describe a process ■ House Of Quality (QFD Quality Function Deployment): Links customer requirements to product/service design specifications using a matrix format; translate voice of customers and put in matrix by engineers to design 3. RISK MANAGEMENT All Businesses Face 6 Types of Risk: 1. Operational Risks (technology, process, org.) 2. Financial Risk(profitability, funding, liquidity) 3. Strategic Risk(general, supply chain, projects) 4. Market Risks (macroeconomic, market development) 5. Geopolitical Risk(sociopolitical, legal, infrastructure) 6. Catastrophic Risk (environmental, manmade, violence) Ten Principles of Risk Management: 1. Risk Management starts at top 2. Risk cannot be managed from an ivory tower 3. Avoid relying on black boxes 4. Risk management is strategy, and strategy is risk mgmt. page 4 5. Risk management is more than policy, it is culture 6. A risk aware culture requires a freeflow of information 7. What matters is the “talk”, not the “report” 8. The path is the goal 9. It is possible to prepare for unknown risks 10. Avoid the downside, but don’t forget the upside Topic 5 Managing Innovation & Growth 1. Innovation Management (Session 17) 2. Managing New Product Development (Session 18) 3. Entrepreneurship (Session 19) 4. Strategies for Growth & Managing Growth (Session 20) INNOVATION & MANAGEMENT (Session 17) Why Innovation is Important? ● Innovation is the genesis of many new businesses ● Mechanism for growth ; add new products/services! ● Innovative firms generate 50% of profits from new products! ● Single best predictor for investment value: degree of innovativeness (study by Cooper) ● Innovative companies generate more money, more profits, more jobs What is Innovation Innovation: the act of introducing novel and useful ideas intovaluecreating new products, new services, or new processes Invention or creativity the generation of a novel AND useful idea Innovation – the act ofimplementing novel and useful ideas into valuecreating new products, new services, or new processes How Innovation Happens combine creative ideas with resources and competencies to create a useful, valuecreating new product, new service, or new process – and then successfully COMMERCIALIZE it! Sources of Innovation Sources of creativity → creativity → innovation ● Creativity: the ability to produce work that is useful and novel ○ Individual ■ Function of: ● Intellectual abilities ● Knowledge ● Style of thinking ● Personality ● Motivation ● Environment ○ Organizational ■ Function of: ● Creativity of individuals within the organization ● Social processes and contextual factors ■ Amplified or Thwarted by: ● Structure (level of autonomy) ● Routines ● Incentives (intrinsic vs extrinsic) ● Sources of Creativity ○ Inventor ■ Problem Solvers ■ Master of basic tools page 5 ■ Question assumptions ■ Tend to be generalists ○ Users ■ Create solutions for their own needs ■ Deep understanding of unmet needs ■ Incentive to find ways to meet these needs ○ R&D organizations ■ Basic Research ■ Applied Research ■ Development ■ Alliances (customers, suppliers, competitors, complementors) ○ Customers, Suppliers, Competitors, and Complementors ○ University & Government funded Research ■ Universities ■ Gov’t Funded Research (Science Parks, Incubators) ■ Private nonprofit ○ Collaborative Networks ■ JVs ■ Licensing ■ Research Associations ■ Gov’t sponsored ■ Informal ■ Technology Clusters Managing Innovation MANAGING NEW PRODUCT DEVELOPMENT (Session 18) Development Strategies Maximize Fit with Customer Minimize Cycle Time Control Development page 6 Requirements Costs Goal Superior value proposition Reduce development cycle time High ROIC Challenges Identifying most important features Achieving first to market advantages Speed/Cost Risk Optimization Balancing Benefits/Costs Gaining the efficiencies from faster Benefit/Cost Optimization Designing to conflicting segments cycle times Prioritization Avoiding obsolescence Controlled speed vs rush Methods Involving Customers/Suppliers Partly parallel development process StageGate Process Beta testing/Lead Users Project champions → assign or Cycle Time Reduction Crowdsourcing encourage senior member to Methods champion a NPD project Tools Conjoint Analysis DFM Portfolio Analysis QFD CAD/CAM Measurement Systems FMEA DFM, CAD/CAM, FMEA, Lean 3D Prototyping Postmortem Analysis Timing Strategies NPD Timing Strategy Options: 1. First to Market (First Mover Strategy): Innovation culture, able to create and then dominate the market against fast followers a. Examples: Amazon with the ebook, J&J with medical devices b. Examples of failures: Apple with the Lisa and Newton 2. Fast Follower : firm must be very good with innovation and have strong R&D, and be good at figuring out why the first mover failed to exploit the market so they can leapfrog fast and grab the market a. Examples: Apple with mp3 players and later cell phones; Nokia with a smart phone; Google over Yahoo, Microsoft in search technology 3. Niche : focus on specific niche market, requires a close connection to customers on what they want as far as product differentiation a. Examples: Laurastar, a Swiss with high end irons “world's smartest iron”; SolarCity, a US firm that focus on clean energy 4. Reactive : firms that are followers and have a focus on operations, have a wait and see approach and look for low risk opportunities, will copy proven innovation a. Example: Ryanair copied the no frills service model of Southwest Airlines Levels of Focus Stategy page 7 ● Advanced R&D new technologies for new uses and users ● Breakthrough some combo of new technologies and uses ● Platform Projects addition to product Family & Single Department Upgrade; next generation , and new system ● Derivative rework existing platforms or product categories to fit a particular need or niche Measures of NPD Performance (Business Level) ● ROIC on innovation: assess the ratio of the firm’s total profits from new products to its total investments & expenditures for new products, including research and development costs, the costs of retooling and staffing production facilities, and initial commercialization and marketing costs CORPORATE ENTREPRENEURSHIPS (Session 19) What is Corporate Entrepreneurship? Corporate Entrepreneurship : theintention to engage in the creation of new products or processes and/or enter in to new markets Entrepreneurial intentions : Motivational factors that influence individuals to pursue entrepreneurial outcomes Entrepreneurial selfefficacy: Conviction that one can successfully pursue entrepreneurial outcomes Perceived desirability: Degree to which a potential entrepreneurial outcome is evaluated as favorable or unfavorable Entrepreneurial Thinking : An individual's’ mental processes of overcoming ignorance to: ● Decide whether a signal represents an opportunity ● Decide whether that opportunity is applicable to the individual specifically ● Process feedback from action steps taken Corporate Entrepreneurial Activities page 8 **Entrepreneurs have a tough time creating long term goals** Managerial vs Entrepreneurial Decision Making ● Contrasting the Entrepreneurial VIew with the Administrative View Establishing Corporate Entrepreneurship in the Organization ● Process for Establishing Corporate Entrepreneurship in the Organization (Nine Steps) ○ 1. Commitment/Culture ○ 2. Plan & Organize ○ 3. Technology ○ 4. Training ○ 5. Customer Focus ○ 6. Resource Management ○ 7. Support Structure ○ 8. Rewards ○ 9. Evaluation System STRATEGIES FOR GROWTH & MANAGEMENT GROWTH (Session 20) page 9 Growth Strategies ● Integrating Strategies ○ Backward integration: A step back (up) in the valueadded chain toward the raw materials ○ Forward integratio: A step forward (down) in the valueadded chain toward the customers ○ Horizontal integrati Buying a competitor Benefits and Challenges of Firm Growth ● Advantages of Size: ○ Increased production efficiency ○ Increased bargaining power with suppliers ○ Increased legitimacy with customers, financiers, other stakeholders (employees, communities) More power for owner to influence performance ● Challenges ○ Pressures on: ■ Human resources ■ Management of employees ■ Entrepreneur’s time ■ Financial resources Challenges Approaches Human •Outsource Resources •alance fulltime and parttime •Fair evaluation process •New employee orientation Management of • Culture development Employees •Communication •Feedback •Delegation •Training Entrepreneur’s •Time management techniques: Time (desire, effectiveness, analysis, teamwork, prioritized planning, reanalysis) page 10 Financial •inancial controls Resources •Managing key assets (cash, inventory, receivables, fixed assets, profitability, taxes) •Accounting system More Challenges for Rapidly Growing Firms (Babson Case) ● Opportunity Overload : Rather than lacking enough sales or new market opportunities (a classic concern in mature companies), many entrepreneurial firms face an abundance of opportunities ● Abundance of Capital : Whereas most stable or established small or mediumsized firms often have difficulties obtaining equity and debt financing, most of the rapidly growing firms were not constrained by this ● Cash Flow Management : These firms all pointed to problems of cash burn rates racing ahead of collections. They found that unless effective integrated accounting, inventory, purchasing, shipping, and invoicing systems and controls are in place, this misalignment can lead to chaos and collapse ● Decision making : Short term planning instead of long term strategy. Many of the representatives of these firms argued that under conditions of rapid growth, strategy was only about 10 percent of the story ● Facilities/Space Limitations : Expansion of space or facilities is a problem and one of the most disrupting events during the early explosive growth of a company Managers of many of these firms not prepared for these Challenges Four Types of Entrepreneurs and Firm Growth (Professional Management Skills vs. Growth Aspirations) Implications of Firm Growth for the Entrepreneur Topic 6 Global Management 1. Globalization of Markets (Session 21) 2. Global Environment (Session 21) a. General & Task Environment b. National Culture 3. Global Strategy (Session 22) GLOBALIZATION OF MARKETS: Globalization: The shift toward a more integrated and interdependent world economy Selfcontained National Economies → Independent, integrated global economic system What Factors Drive Globalization (reasons for globalization)? 1. Diminishing Distance and Communication Challenges a. Distance and Communication Challenges i. Markets were historically closed because of the slowness of travel and communications over long distances. b. Cultural Advancement i. Language barriers and cultural practices made managing overseas businesses difficult page 11 c. Technological Advancement i. Improvement in transportation technology and fast, secure communications have greatly reduced the barriers of physical and cultural distances. 2. Evolving Political Economies a. Political Economy : Refers to the interdependent nature of the economic, political, and legal systems within a country 3. Recognition of the Mutual Benefits a. FreeTrade Doctrine : the idea that if each country specializes in the production of the goods and services that it can produce most efficiently, this will make the best use of global resources and will result in lower prices 4. Declining Barriers to Trade a. Reductions of Tariffs i. Tariffs: a tax that government imposes on imported or, occasionally, exported goods ii. Intended to protect domestic industry and jobs from foreign competition b. The Lowering of Trade Barriers: i. Opened enormous opportunities for managers to expand the market for their goods and services ii. Allowed managers to buy and sell goods and services globally iii. Increased intensity of global competition such that managers now have a more dynamic and exciting job of managing 5. The Development of the MultiNational Enterprise (MNE) a. Multinational enterprise (MNE) : any business that has productive activities in two or more countries 6. Development and Support of Global Institutions a. Global institutions: i. help manage, regulate, and police the global marketplace ii. promote the establishment of multinational treaties to govern the global business system b. Examples: i. the eneral Agreement on Tariffs and Trade (GATT) ii. the World Trade Organization (WTO) iii. the International Monetary Fund (IMF) iv. the World Bank v. the nited Nations (UN) vi. the G20 Process of Globalization ● Globalization Process : the set of specific and general forces that work together to integrate and connect economic, political, and social systems across countries, cultures, or geographical regions so that nations become increasingly interdependent and similar Factors that Impede a Global Strategy ● Barriers to Entry: factors that make it difficult and costly for the organization to enter a particular task environment or industry ○ Economies of scale : cost advantages associated with large operations ○ Brand loyalty : customers’ preference for the products of organizations currently existing in the task environment ○ Government regulations t hat impede entry Global Outsourcing : the purchase or production of inputs or final products from overseas suppliers to lower costs and improve product quality or design GLOBAL ENVIRONMENT page 12 Global Environment : set of forces and conditions in the world outside the organization’s boundaries that affect the way it operates and shapes its behavior ● Changes over time ● Presents managers with opportunities and threats Forces of Global Environment General Environment: The wideranging global, economic, technological, sociocultural, demographic, political, and legal forces that affect an organization and its task environment ● Sociocultural Forces: Pressures emanating from the social structure of a country or society or from the national culture ● Demographic Forces: Outcomes of change in, or changing attitudes toward, the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class ● Political and Legal Forces: Outcomes of changes in laws and regulations, such as deregulation of industries, privatization of organizations, and increased emphasis on environmental protection ● Economic Forces: Interest rates, inflation, unemployment, economic growth, and other factors that affect the general health and wellbeing of a nation or the regional economy of an organization ● Technological Forces: Outcomes of changes in the technology that managers use to design, produce, or distribute goods and services Task Environment: the set of forces and conditions that originate with suppliers, distributors, customers, and competitors and affect an organization’s ability to obtain inputs and dispose of its outputs because they influence managers daily ● Distributors: powerful distributors can limit access to markets through its control of customers in those markets ● Customers: identifying an organization’s main customers and producing the goods and services they want is crucial to organizational and managerial success ● Suppliers: access to raw materials, component parts, and labor (employees) can be critical in foreign markets ● Competitors: rivalry between competitors is potentially the most threatening force that managers deal with THE R0LE OF NATIONAL CULTURE Values: Ideas about what a society believes to be good, right, desirable and beautiful ● Provide the basic underpinnings for notions of individual freedom, democracy, truth, justice, honesty, loyalty, love, sex, marriage, etc. Norms : Unwritten, informal codes of conduct that prescribe how people should act in particular situations and are considered important by most members of a group or organization page 13 ● Folkways, mores Hofstede’s Dimensions of National Culture 1. Individualism v. Collectivism a. Individualism: a worldview that values individual freedom and selfexpression b. Collectivism: people should be judged by their contribution to the group 2. Low Power Distance v. High Power Distance a. Power Distance: degree to which societies accept the idea that inequalities in the power and wellbeing of their citizens are due to differences in individuals’ physical and intellectual capabilities and heritage 3. Achievement Orientation v. Nurturing Orientation a. Achievement: values assertiveness, performance, success, and competition b. Nurturing: values quality of life 4. Uncertainty Avoidance: Low v. High a. Uncertainty Avoidance: degree to which societies are willing to tolerate uncertainty and risk b. Low Uncertainty Avoidance: cultures are easygoing, value diversity, and tolerate differences in personal beliefs and actions c. High Uncertainty Avoidance: societies are more rigid and expect high conformity in their citizens’ beliefs and norms of behavior 5. Shortterm Orientation v. Longterm Orientation GLOBAL STRATEGY (Session 22) Competing Internationally ● Why enter Foreign Market ○ New customers ○ Exploit core competencies ○ Spread business risk ○ Lower c osts ○ Access resources/capabilities ● Political risk: stem from instability or weaknessesin national governments and hostilityto foreign businesses ● Economic risks : stem from stability of a countrymonetary system , economic and regulatory policie, reliability infrastructure, and the lack oproperty rights protections Core Strategies for International Businesses Competing Internationally: ● Global Strategy: think/act global ● Transnational Strategy: think global, act local ● Multidomestic Strategy: think/act local Transnational Strategy Advantages Disadvantages page 14 offers benefits of both local and responsiveness more complex and harder to implement and global integration conflicting goals may be difficult to reconcile and enables transfer and sharing of resources and require tradeoffs capabilities across borders implementation more costly and timeconsuming provides benefits of flexible coordination Strategic Options for Entering International Markets 1. Export goods from domestic base 2. License production/distribution/marketing to foreign entities 3. Establish a WhollyOwned Subsidiary (acquisition or greenfield) 4. Form Strategic Alliances or Joint Ventures with foreign companies Acquisition Strategy, Advantages ● High level of control ● Quick largescale market entry ● Avoids entry to barriers ● Access to acquired firm’s skills Building Competitive Advantage in International Markets ● Use international location to lower cost or differentiate product ● Share resources and capabilities ● Gain crossborder coordination benefits ○ International competition: when same companies compete against one another in multiple geographic markets, the threat of crossborder counterattacks may be enough to deter aggressive competitive moves and encourage mutual restraint among international rivals ○ Dumping: selling goods in foreign markets at prices that are below normal home market prices, or below the full costs per unit Strategies for Competing in Emerging Markets ● Emerging Market : economy with low to middle per capita income Topic 7: Values Based Management 1. Managing Diversity (Session 23) 2. Discrimination and Sexual Harassment (Session 24) 3. Ethical Management (Session 25) 4. Stakeholder Management and CSR (Session 26) MANAGING DIVERSITY Diversity: dissimilarities/differences among people in age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background, and capabilities/disabilities Multicultural Society, Diversity, and Management ● Managers need to understand the impact of demographic and cultural diversity on business interactions both domestically and globally ● Managers need to be able to resolve challenges that arise because of the impact of demographic and cultural diversity in business interactions ● Diversity provides a resource to an organization that managers must understand in order to develop strategy, strengthen organizational culture, and to leverage those resources for the firm’s development ● A changing society and changing market place provides opportunities to firms Diversity of Employees Provides: ● A variety of POVs and approaches to problems and opportunities can improve managerial decision making ● Diverse employees are more attuned to the needs of diverse customers ● Diversity can increase the retention of valued organizational members page 15 ● Diversity is expected/required by stakeholders Managerial Roles in Diversity Management ● Managers either promote the effective management of diversity or derailsuch efforts; thus they are critical to this process ● Managers should serve as a role model and institute policies and procedures and provide resources to ensure that diverse members are treated fairly Critical Managerial Roles ● Managers can take steps to become sensitive to the ongoing effects of diversity in their organizations, take advantage of all thecontributions diverse employees can make, and prevent unfair treatment of diverse employees ● When managers commit to diversity, it legitimizes diversity effortof others ● Effective management of diversity recognizes: ○ Minorities start out at a slight disadvantage due to the ways in which they are perceived by others in the organization ○ Research suggests slight differences in treatment can accumulate and result in major disparities over time ● Types of Role: Interpersonal, Informational, Decisional Distributive Justicea moral principle calling for fair distribution of pay, promotions, and other organizational resources based on meaningful contributions that individuals have made and not personal characteristics over which they have no control Procedural Justice: a moral principle calling for the use of fair procedures to determine how to distribute outcomes to organizational members ● PJ exists when managers: ○ carefully appraise a subordinate’s performance ○ take into account any environmental obstacles to high performance ○ ignore irrelevant personal characteristics Diversity Awareness Programs ● Provide organization members with accurate information about diversity ● Uncover personal biases and stereotypes ● Assess personal beliefs, attitudes, and values andlearning about other points of view ● Develop an atmosphere in which people feel free to share their differing perspectives ● Improve understanding of others who are different The Diversity Imperative ● Commitment to diversity is a moral and ethical imperative ● Diverse organizational members can be a source of competitive advantage , helping an organization provide diverse customers with better goods and services ● The variety of points of viewand approaches to problems and opportunities that diverse employees provide can improve managerial decision making ● Effective management of diversity increases attraction and retention of talented employees , which decreases the costs of hiring and helps ensure that all employees are highly motivated Managing Multicultural Teams ● Managers will most likely lead teams with members from diverse cultural backgrounds ● Multicultural teams can sometimes be dysfunctional ● Cultural differences can create substantial obstacles to effective teamwork ● These problems may be subtle and difficult to recognize until significant damage has already been done Four Challenges in Managing Multicultural Teams 1. Direct versus indirect communication a. Difference between direct and indirect styles page 16 b. When members see such differences as violations of their culture’s communication norms, relationships can suffer 2. Trouble with accents and fluency a. Members who aren’t fluent in the team’s dominant language may have difficulty communicating their knowledge b. This can prevent the team from using their expertise and create frustration or perceptions of incompetence 3. Differing attitudes toward hierarchy a. Team members from hierarchical cultures expect to be treated differently according to their status in the organization b. Members from egalitarian cultures do not c. Failure of some members to honor those expectations can cause humiliation or loss of stature and credibility 4. Conflicting decisionmaking norms a. Members vary in how quickly they make decisions and in how much analysis they require beforehand b. Someone who prefers making decisions quickly may grow frustrated with those who need more time Intervention Options 1. Adaptation: working with or around differences a. When to use: Members are willing to acknowledge cultural differences and figure out how to live with them b. Example: An American engineer working on a team that included Israelis was shocked by their inyourface, argumentative style. Once he noticed they confronted each other and not just him—and still worked well together—he realized confrontations weren’t personal attacks and accepted their style 2. Structural Intervention: reorganizing to reduce friction a. When to use: The team has obvious subgroups, or members cling to negative stereotypes of one another b. Example: An international research team’s leader realized that when he led meetings, members “shut down” because they felt intimidated by his executive status. After he hired a consultant to run future meetings, members participated more 3. Managerial Intervention: making final decisions without team involvement a. When to use: Rarely; for instance, a new team needs guidance in establishing productive norms b. Examples: A software development team’s primary business language was English, but some members spoke with pronounced accents. The manager explained they’d been chosen for their task expertise, not fluency in English. And she directed them to tell customers: “I realize I have an accent. If you don’t understand what I’m saying, just stop me and ask questions.” 4. Exit: voluntary or involuntary removal of a team member a. When to use: Emotions are running high, and too much face has been lost on both sides to salvage the situation b. Example: When two members of a multicultural consulting team couldn’t resolve their disagreement over how to approach problems, one member left the firm DISCRIMINATION AND SEXUAL HARASSMENT Major EEO Laws page 17 Types of Discrimination in the Workplace ● Basis of Gender ○ Sources of discrimination: ■ Unequal Pay ■ Discrimination based on gender in hiring, firing, pay promotion and working conditions ■ Pregnancy Discrimination & Work Situations ■ Family and Medical leave ○ Glass Ceiling:the invisible barriers that prevents minorities and women from being promoted to top corporate positions ● Basis of Age ○ Aging U.S. Population ○ Federal Age Discrimination Laws ■ 1964: Title VII of the Civil Rights Act of 1964 ● Prohibits discrimination in employment decisions ■ 1967: Age Discrimination in Employment Act ● Prohibiting discrimination against workers over 40 and restricts mandatory retirement ● Basis of ace/Ethnicity ○ Census Bureau distinguishes between races ○ Legal remedies to racial and ethnic discrimination ■ Title VII of the Civil Rights Act of 1964 ■ Civil Rights Act of 1991 – monetary damages for discrimination ● Basis of eligion ○ Prohibit discrimination based on Religion ■ Title VII of the Civil Rights Act of 1964 ■ The “White House Guidelines on Religious Exercise and Expression in the Federal Workplace” 1997 ○ Accommodation for Religious Beliefs ■ Scheduling of critical meetings ■ Providing flexible time off for holy days page 18 ■ Posting holy days for different religions on the company calendar ● Basis of Disabilities/Capabilities ○ Americans with Disabilities Act (ADA) 1990 ■ Prohibits discrimination against people with disabilities ■ Requires employers to make reasonable accommodations ● Basis of Socioeconomic Background ○ Socioeconomic background : refers to a combination of social class and incomerelated factors ○ Socioeconomic Implications ■ Savings, financial security, home ownership ■ Affordability of child care ● Basis of Sexual Orientation ○ Prohibit discrimination on the basis of Sexual Orientation ■ 20 states have laws against discrimination based on sexual orientation ■ The New Jersey Law Against Discrimination prohibits discrimination based on sexual or affectional orientation ■ There is a 1998 Executive Order that prohibits discrimination in federal workplaces ● Basis of Physical Appearance ○ Whether individuals are attractive or unattractive, thin or overweight, in most cases hno bearing n their job performance Sources of Discrimination 1.Perception: the process through which people select, organize, and interpret what they see, hear, touch, smell, and taste to give meaning and order to the world around them ● Schema: an abstract knowledge structure stored in memory that allows people to organize and interpret information about a person, event, or situation ● Gender Schema: preconceived beliefs or ideas about the nature of men and women, their traits, attitudes, behaviors, and preferences 2.tereotype and Bias ● Stereotype: simplistic and often inaccurate beliefs about the typical characteristics of particular groups of people ● Bias: the systematic tendency to use information about others in ways that result in inaccurate perceptions ○ Similartome effect – perceive others who are similar to ourselves more positively than we perceive people who are different ○ Social status effect – perceive individuals with high social status more positively than those with low social status ○ Salience effect – focus attention on individuals who are conspicuously different 3. Overt Discrimination: knowingly and willingly denying diverse individuals access to opportunities and outcomes in an organization ● Unethical and illegal ● Violation of the principles of distributive and procedural justice ● Subjects firm to lawsuits Forms of Sexual Harassment ● Quid pro quo : asking for or forcing an employee to perform sexual favors in exchange for receiving some reward or avoiding negative consequences ● Hostile work environment : telling lewd jokes, displaying pornography, making sexually oriented remarks about someone’s personal appearance, and other sexrelated actions that make the work environment unpleasant Interferes with their ability to perform their jobs effectively Steps to Eradicate Sexual Harassment page 19 ● Develop and clearly communicate a sexual harassment policy endorsed by top management ● It should contain: ○ 1. Examples of types of behavior that are unacceptable, ○ 2. Procedure for employees to use to report instances of harassment, ○ 3. Discussion of the disciplinary actions that will be taken when harassment has taken place, and ○ 4. Commitment to educate and train organizational members about sexual harassment. ● Use a fair complaint procedure to investigate charges of sexual harassment ETHICAL MANAGEMENT (Session 25) Ethics: innerguiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the right or appropriate way to behave Ethical Dilemma: a quandary people find themselves in when they have to decide if they should act in a way that might help another person even though doing so might go against their own selfinterest NATURE AND SOURCES OF ETHICS ● Societal Ethics: standards that govern how members of a society should deal with one another in matters involving issues such as fairness, justice, poverty, and the rights of the individual ○ People behave ethically because they have internalized certain values, beliefs, and norms ● Occupational Ethics: standards that govern how members of a profession, trade, or craft should conduct themselves when performing workrelated activities ○ e.g., Medical & Legal ethics ● Individual Ethics: personal standards and values that determine how people view their responsibilities to other people and groups ○ How they should act in situations when their own selfinterests are at stake ● Organizational Ethics: guiding practices and beliefs through which a particular company and its managers view their responsibility toward their stakeholders ○ Top managers play a crucial role in determining a company’s ethics ETHICAL DECISION MAKING page 20 **know utilitarian** The Ethics Code Litmus Test: ● Is what we are proposing to do fully compliant with our code of ethics ? Are there areas of ambiguity? ● Is this action in harmony with our core values ? Are any conflicts or potential problems evident? ● Is this action ethically objectionable ? Would our stakeholders, our competitors, the SEC under the SarbanesOxley Act, or the news and social media view this action as ethically objectionable? WHY BEHAVE ETHICALLY? The relentless pursuit of selfinterest can lead to a… Collective Disaster: when one or more people start to profit from being unethical because this encourages other people to act in the same way Effects of Ethical/Unethical Behavior page 21 The Costs Companies Incur When Ethical Wrongdoing Is Discovered Trust: willingness of one person or group to have faith or confidence in the goodwill of another person Reputation: esteem or high repute that individuals or organizations gain when they behave ethically CAUSES/EXAMPLES OF UNETHICAL BEHAVIOR Drivers of Unethical Business Behavior: ● Faulty internal oversight allows selfdealing in the pursuit of personal gain, wealth, and selfinterest ● Shorttermism pressure to meet or beat shortterm performance targets ● A culture that puts profitability and business performance ahead of ethical behavior SelfDealing: occurs when managers take advantage of their position to further their own private interests rather than those of the firm ShortTermism : tendency for managers to focus excessively on shortterm performance objectives at the expense of longerterm strategic objectives. It has negative implications for the likelihood of ethical lapses as well as company performance in the longer run Consequences of Ethically Questionable Behavior STAKEHOLDER MANAGEMENT AND CSR (Session 26) STAKEHOLDERS & ACCOUNTABILITY Stakeholders: the people and groups that supply a company with its productive resources and so have a claim on and stake in the company page 22 ● When the law does not specify how companies should behave, managers must decide what is the right or ethical way to behave toward the people and groups affected by their actions Types of Company Stakeholders ● Stockholders ○ Want to ensure that managers are behaving ethically and not risking investors’ capital by engaging in actions that could hurt the company’s reputation ○ Want to maximize their return on investment ● Managers ○ Responsible for using a company’s financial capital and human resources to increase its performance ○ Have the right to expect a good return or reward by investing their human capital to improve a company’s performance ○ Frequently juggle multiple interests ○ Problem has been that in many companies corrupt managers focus not on building the company’s capital and stockholder’s wealth but on maximizing their own personal capital and wealth ● Employees ○ Expect to receive rewards consistent with their performance ○ Companies can act ethically toward employees by creating an occupational structure that fairly and equitably rewards employees for their contributions ● Suppliers and Distributors ○ Suppliers expect to be paid fairly and promptly for their inputs ○ Distributors expect to receive quality products at agreedupon prices ● Customers ○ Most critical stakeholder ○ Company must work to increase efficiency and effectiveness in order to create loyal customers and attract new ones ● Community, Society, and Nation ○ Community: physical locations like towns or cities in which companies are located ■ provides a company with the physical and social infrastructure that allows it to operate ■ contributes to the economy of the town or region through salaries, wages, and taxes CORPORATE SOCIAL RESPONSIBILITY (CSR) Corporate Social Responsibility:the way a company’s managers and employees view their duty or obligation to make decisions that protect, enhance, and promote the welfare and wellbeing of stakeholders and society as a whole ● Is a firm’s duty to operate in an honorable ma
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