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This 183 page Class Notes was uploaded by Ilene Rowe II on Saturday October 3, 2015. The Class Notes belongs to MHR301 at California State Polytechnic University taught by RajSingh in Fall. Since its upload, it has received 16 views. For similar materials see /class/218153/mhr301-california-state-polytechnic-university in Business, management at California State Polytechnic University.
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Date Created: 10/03/15
Learning Objectives Mm mam explain how ethical behavior musmmmmmamadbytawmdfraa Expmn the mmn mm mm righb and justice swarms for minding WI hammer Dawns how bum Mum and organizatiqu factors shape ethical mm makian Dunner corporate social muonsib ky and haw to evaluate I atong ergonomic legaI nautical and 1me criteria Learning Objectives mom 4 Describe four organua anal appmadms to environmer raspomlhility and axth the philosophy a sustainability n times haw ethical cranium In cream 111mth uthical Whip and organizational Mm and m c Identin important slakohaldem for an nrganiu on and discuss haw managus balance ms mimosa of mhus stakeholdats Ethics o The ends of moral principles and values that govam the behaviors of a person or group with respect ta what is right bf wrung Three Domains of Human Action Exhtbtt5 1 1 r 7 39 quot Domain of Free Choi 39 v 1 7 7 Domain of Codi ed Law V DDlJlaill 0f Ellll39 CS 1432521 Standard 739 Standard 1 Personal Standard quot Amount of Explicit Control cypyngm 2on2 wsmmmm a ammarmmsmumng All nmsxesemd Ethical Dilemma o A dilation that arises whan all alternative Wine or behaviors have been deemed undesimble because a 0f potantially nagatiw othical cansequencas making it di cult to dis ngulsh right from wrong Criteria For Ethical Decision Makin Can ict between naeds of the part amp whale Individual mus the organization Organization mus may as a whole Managers bene t fmm a 53 quot1 to guide their decision making nouns and values U li tarian Approach 4 Individualism Approach MoralRights Approach nu Justice Appmaeh Utilitarian Approach s Moral bahavior produces the greatest good for the greatest number Example recent trend amung companies tn monitor employee use of the Internet Individualism Approach Adams mmlwhan wypmmatam mamth hast Winnn lawman which uitimauly nds to m greater good Individual ufdimdion paramount Indvidualismlsbe wadmlesdmhomty Mmegrilynim mtworhbadh nlnng run i lap exam fmm WoddGom Enron T you dammia aws of approach MoralRights Approach u Moral decisions are those that best maintain the rights of these people affected by them a An ethical decision is one that avoids interfering with me fundamental rights of othem Six Moral Rights of free consent to of freedom of conscience of free to due to life and cwwmeznnzwsmmmm a wamaf39rhmnsmLemng A gm med Justice Approach o Moral Decisions must be based on standards cf equity fairness impartiality Thrss gm of 55m Aggroachaa I Distributive Justiae o Pmaedural Justice In Compensamry Juwos Distributive Justice o Diffurent trust39nent 9f people should not be based an arbitrary diaractsristics t In case of substantive differences people shnuld be heated di eren y in propor on in the diffemnoes among them Rules should be clearly stated I Rulas should be consistan y and impartially enforced Compensatory Justice 0 Individuals should be compensated for the cost of their injuries by the party responsible Individuals should not be held responsible for math they haw no comm over Factors Affecting Ethical Choices o The Manager 0 Levels or stages of moral development Preconventional Conventional Postconventional o The Organization pryngnQ 2m wsmmmm a ammarmmsmumng A ngmmsema l principles 339 jus w and run Am um mp1 ham ailmm vains uni unis native sdu nnsin mu quot5 I215 n and Level 2 ennvminnI mnsmmmg a servant lea elshlu u n gcnecuri m y 2 new Walk gluuv cullahnmiun Emlwweved employees Ml namclvmlun ngg i Amonmtmcoevclve Lunean Style mu uccnmmlshmenl EmMnyn may The Organization o Ranaly can elhical er unethical corporate aclions be altibulnd solely ln the persng stalues of a singla manager a Values adopted within the organization are highly important a Most peaple believe their duty la lo ful ll abligatiuns and expectations 3f others Corporate Social Responsibility I Organization s obligation to make decisions and take acb39ons that will enhance the walfara and interests of society and organization a Being a good corporate citizen c Dif culty in understanding issuss can be ambiguous wim respect to right and many Organizational Stakeholders 0 Any group within or outside the arganizatinn that has a stake in the organization s perfoan I Each stakeholder Has a di amnt critarion a mum Hasa Woven mates in the mmpaw Monsanto 1 mi kmquot w ummr Stakeho der Market Approach Lega Approach 1 1m wan m39mi m 4 Ethical niscmionary Hugou my Ecmmn LugI nupnnnlm Nesponnlbully BE Pm tnhl 0mm Law w Avoid Harm Rupouslnully a Emmi Cnnlrlbme m me Do wnu n ngm Cnmmuml m Qxlallly of llfe ur dEwewrment mm wieyuy mum i The Ethical Organization Ethical Emmal lndlvmuals Lesdelslllp e MANAGEMENT L DAFT i Learning Objectives I Mumefnurrmmgenmmmmmmetwud mmmmm i awmmmmmmm Mmmmainmmhmnmnm Wren mmmmw Mama and vmld emmnmm Dumbo mammal hum WWW i t liw W muleumfhrmmmmd i mmmemmmmmmmm Learning Objectives com I Understand in mm mlbngos mm in becoming a m Hunger in m emanation in my wand Ohms um armament Much needed no nal with W turbulent mimnm including but m I nally glahaliu m and mini clung Erphm the Want skills needed fur Matti quotHaw The Nature of Management Managers have ta cope MW diverse and airtweaking dzallenges 1 Tu keep pace with everadvanan Wmlngy 2 To nd ways to incorme the Internet and e businm into their strategies and business model 3 Skive b ramain oompe ve in a dynamic and far reaching warld What Do Managers Have in Common 0 They gst things done through their arganiza nn They create the sys ams mndi ans and envimnmant that enable organizations to survive and thriva beyond the tenure of any speci c supervisar or manager De nition of Management The attainment of 39 g in an and 39 x manner through 0 Four functions 13 organiza onal mums Managers usa a mut tude of skills to perform functions Functiuns of Management The Process of Management Planning Function 7 De msgoals famoruaniza oml Momma Deddestasksandlmdmmsmadad irwx f PlanningAOL maWamrWLMOI mam Lm dprngMGoRomd Organizing Function i V r 39 Fallnrws planning Rama haw organization tries to accomplish p n Invnlvos assigan m m inta mm s mm and allocation 1 minus was militia v r v 1 Shuduml reorganizations IBM m catholic Church Microsoft Mamas the FBI Leading Function O The use of influence tn motivate Employees tn achieve the organization s goals 0 r z a Michael Dell Mag Whi unan uf eBay Cara Kakuda of Nextal Controlling Function Muniwring empioms am Dammian whetherlhe organization is on m tcmand is mats Maldng corrections as necessary Controlling Function New Trends 39 Lifiii 39 training employees ha mnitor and correct Mammal a W 39 f iquot 43quot I s u I prmlidas central wimaut skint top um mushaims o Lack of Contra Information can lead in Urganiza onal Failure Organizational Performance Attainment of organizational goals in an ef cient and Wham effective manner de nition of management The Protess of Management mii quot cypyngm 2m wsmmmm a ammarmmsmumng A ngmmsema Organizational Performance a 0 23m WWM humidim ma Gel may mutant I L Tim39i iv 711827 Woe to which damnation minus a W and c E 2 of m nitmi mum m m may Ind Mbjtapmdmemmmdmmo mm as Fwy Mame gamma ability m min Maw by using assumes in nu am and Me manner Management Level Top Managers rmdwe Managers Fvstere Mamagers Naumanhgers Hndwwdua Cunlnbum39s Human Skms 3th n Management Skills chn ivc hditytamme 715 and the relatinmhipt mung its para a L mmymwmkwmndmmn mWaMbmkMdynagrwp umber 4 11 x a undermmmwmd mmmmwmmwmm msmst mm W 0mm Mlllle mum39s rnline u mum mug an p lkn ml Management Types Horizontal 0 JV 35 Responsible fora dspanmcnt 1m performs a single fundional task and Hts employmwmmim ar training and skills Responsible for several dcpanmants that panama diffamm Wm Managerial Types Horizontal AWN g quot Amending What is it like to be a Manager 0 Manager Activities 1 39 Fragmentation Variety Brav y o Manager39s Role 8st of mm far arm s behav m Diverse ac v as 10 rules From Individual Identity gt To Manager Identity Specvahst perfovms speci c tasks GenerahsL coordmales dwcrse Lasks LY An individua actor A network builder Works re ativdy independcn y Works in mm mtcrdcpcndent manner mlmugym an Ten Manager Roles I Leader rule Liaison rule H gh Ci 0 u Mod 5 t o a E Low Supervisnry 7 Muddie i quotlop 39 Managers Managers Managers E i l h a Role Differences Scurce 0f Financial Rmuroee n Unmnvan nnal Bottomline The New Wovkp e The Old Workp 9 c hamcmisxics Resources Blisilnformauon Alomehyswca assets or Hewale mm summed quh Workers Empoweved emp oyees Loyal employees m agpm Forces on Organizations Tprhnobg mm 9 bwnecc Mpdmmml Markets Globak mdudmg ntemel Loca domesm Workimm mm H m M Va ues Lhange Speed mame ernuemy Events Tuvbu enl mme frequent La m pyedmble cnses Management Competencies Leademnp Duperaed empuwenug Auwumm Focus Connecuon 0 onfits mmmm ummuyuu Damg Work 5 teams By ma dua s M Honsle mum v on A rmnpumirm Desng Experimentation Ef uent perfmmante eammg orgamzauon Management and the New Workplace a 7 i 5 39 a Dispersed leadership Empowerhg others Go abomm mla onshiys Teambuilding skills Lamhing organization 1 Stay Calm u Be Visible u Put People Before Business I Tell the Truth i Know When tn Get Back to Business Q 7 if 7 739 Evalu nofManaement Learning Objectives u Unwian how Nautical forms m uenoe the pram a management Q Identity and sxplain rmjor dmlopmeris in ma mm of quotImamm bought Q Describe mt major components the WI and humanistic mansgmnt pom a Discussme managemem science pompactive and It curmnt m in amnlza uns Learning Objectives mom Explain the Mo cammmnu mm mm the commune vial and total quality mama In Dustin the learning amnm on and Inn chum in mm mm and Wanna on sharing that managers mks to W it at Discuss the twhnolcgydriwn wotkplaw and the rate of ramming supply chain mnayamom mum resume planning knowleon mmgamont systems and custonur relationship manmam Management and Organization 0 Management philosophies and mganizatinn forms change over time ho meet new needs a Some ideas and mamas from the past are still relevant and applicable tn management today Historical Perspective a vaidas a mntext or environment a Develops an undBMnding of sucietal impact at Achisvss strategic thinking o lmpmves mncepmal skills Forces In uencmg Organizations and 39 rvalues needs and standards of behaviur v 75 in uence 9f political and legal institutions an people amp organizations 39 adoruesmata ect the availability production amp distribution cf 9 moiety s resources among mmpeting users 192m man 194a man mm mm man 1990 2mm 2mm 151a 1390 19m 1 mm Classical Perspective 3000 BC Rational scienti c approach to management make organizations ef cient operating machines Scienti c Management Taylor 18561915 o Daveloped standard method for perfoan each job 0 Selected workers with appmprim abilities for each job Trained women in statuard method it Su ed wnrkals lannin wart anmn m ng inmgyug ona g a Provided wa inaentivesto workers for increase output Scienti c Management immude far porfwmnm mm m Guam Rudy Wand Optimumd th inwulnuauf quotname 11er mining lit at on mmmlmmdmand higheran m 0 Did mmw varianca mung indiuidunb c mewmmnmmmmwnerm Bureaucratic Organizations 1 Max Weber 18641920 a Priortn Bureaucracy Organizations Empaan employees may loyal to a single individual ram than to the organization 01 t5 mission Remummm za individualdasims mum than organizational gals Characteristics of Weberian Bureaucracy mm a mom mun mum mi summ m vmmm lmmi I mm nmzmmmuu mm Famous ganth am mm m 1 Max mi mm in mm quotan M1va 31 Hues mm mu nlranxw mam x em umn AIMmum as an mum 2 mm um m mung mumm Iner Armanquot1hr w a mwmaam EXWXS Administrative Principles c i Hanri Fag0 Mary Parker Follett and Chester I Barnard Organiza on rather than the individual Delian it mnmm functions of Running yanking mmnding Demanding and munoiling u Diviamn of werk 0 Unity of command a Unity of direction Scalar chain Mary Parker F ollett 18681933 a Importmo common Ime graft for rm mm in organiwiom Poputar with businesspeopie a herday Overlooked by mmumnt scholars Centres in 3cm manapsmom n Ludemhip imam Engineering technique Chester Barnard 18861961 Cliques Naturally occu i a WI groupings me will Can m to follow mame orders Humanistic Perspective Emphasizes understanding human behavior needs and attitudes in the workplace Hw39rran Relations Movement Human Rmumas Pempec w Bahnviaml Scams Appmnch Emphasized sah sfac an 0f employees basic needs as the key to increased worker productivity Hawthorne Studies I sum In 18 t Fm r tapeworm 8 three control groups a Five di omnt tasts l Tost pointed m More mr tun inuminl an for pmdumlvlly a 1st Rainy Assembly Test Rmm expulmant was Wmial ms last 6 years n lnmrpmta m many not cause of imam output i Fumrmatimasad output 1 Suggests jabs should be designed to meat higherlevel needs by aliowing workers to use their full potential I Identi ed a hiemrchy of needs a Problems sham fmm an inability to satisfy ona s heads Douglas McGregor Theory X amp Y 19061964 Tim 3 mmvsa Thaw V Wm u Dialing work wlll 1 Don not dislike work Mid it 9 SM W and If i Must be warm control comuadmmw 1 Seek 3590031513 Behavioral Sciences Approach Wm M HmW ammm Fude o Applies social science in an organiza nnal context Draws from economics psymology sociolagy anmmpology and char disciplines Undotsmm employee bahavbt and Mmdhn in an mutational swing on Organization 03mmquot Management Science Perspective 4 Emerges af erww II a Applied mathematics ata atica and Other quantitative techniques to managerial problems gt Opam om Research mwnmatical madam Opum ons Managemnt spechlims h physical proman at goods at Mm lamination Tachmlogy Wind in management lnfum an systems SystamsThsery Contingency View 1 T012 Qua ty Management TQM Environment Organization Ouiputs formation Employee yesuume msnmes satlslachon r 7 Fronts FxlnSSas Human F I resources mm a resoums 2361 K Feedback case Vlew unlversallst Viewi gt lg mlquequot lms I am has wnYquot V 39 EXH b tZ 6 TQM Focuses on managing the total Organiaaiion to dallver quality w customus Four sinni cam elements are Ema immm Few on the cum WWW Mucus imam Elements of a Learning Organization TumBaud More Learning Organization Om lMomu cm awn Types of ECommerce EWE MANAGEMENT RICHARD L DAFT The Environment and Corporate Culture CHAPTER 3 Learning Outcomes Describe the general and task environments and the dimensions of each Explain the strategies managers use to help organizations adapt to an uncertain or turbulent environment Define corporate culture and give organizational examples Explain organizational symbols stories heroes slogans and ceremonies and their relationship to corporate culture Describe how corporate culture relates to the environment Define a cultural leader and explain the tools a cultural leader uses to create a highperformance culture Copyright 2010 by SouthWestern a division of Cengage Learning All rights reserved Are You Fit for Managerial Uncertainty The environment in which businesses operate are increasingly dynamic Some managers cannot respond to environmental surprises In an uncertain environment managers need to facilitate new thinking new ideas and new ways of working External Environment General Environment Technological Copyright 2010 by SouthWestern a division of Cengage earning All rights reserved 3 International Dimension Events originating in foreign countries Impacts all aspects of the external environment New competitors New customers New suppliers Today all companies globally 3 Technological Dimension Scientific and technological advances Specific industries Desktop computers Society at large Networks I m pact Internet Access 39 Handheld devices Organlzatlons Videoconferencing Managers Cell phones I Laptop Customers IMF Medical advances Copyright 2010 by SouthWestern a division of Cengage Learning All rights reserved 3 Socio Cultural Dimension 0 Toeyis iemoigiiephies ewe the fooooe i ioo ofquot iiwtigiiie woiilkio Knee Norms Customs emogiieiohio 39 iemos Vaiues of population Ifi g jl iizei 1 om Geographical Distribution i Zgzulation Density Education Levels Copyright 2010 by SouthWestern a division of Cengage Learning All rights reserved 3 Economic Dimension 0 Consumer purchasing power 0 Unemployment rate 0 Interest rates 0 Frequency of mergers and acquisitions 0 Small business sector vitality Copyright 201 0 by SouthWest Learning All righ 3 Legal Political Dimension 3 Natural Dimension Concern for the environment The natural dimension has no voice Pressure comes from advocacy and managers Eliminate nonbiodegradable plastic bags from the environment Improving efficiency of plants and factories Investing in cleaner technologies Copyright 201 0 by SouthWest Learning All righ Task Environment Sectors that have a direct working relationship with the organization Changes in these various gt Competitors sectors can gt Customers create gt Suppliers tremendous Challenges gt Labor Market Copyright 2010 by SouthWestern a division of Cengage Learning All rights reserved External Environment Eponomlc I Dotcom crush mm US and 0min 09mm Magma gamma I Headquimjh Stuntman public In mum Hun 100 Spin Poland and Dolls InthuaWl Imma wimAieaMn Antiquota W an 1M9 harden Emily Frame 3977 BS 91v 39FWW aness munic mivgelr in Japan nuhidoNaxtig maria 13 Copyright 2010 by SouthWestern a division of Cengage Learning All rights reserved 3 Environmental Uncertainty High High 4 Uncertainty Rate of Change in Jim Management must adapt to Low changes Uncertainty i Low Low High Number of Factors in Organization Environment Copyright 2010 by SouthWestern a division of Cengage earning All rights reserved Adapting to the Environment BoundarySpanning Roles coordinating the organization with key elements in the external environment Interorganizational Partnerships collaborating with other organizations Mergers combination of two organizations Joint Ventures an alliance of organizations for a specific project 15 Learning All rights reserved From Adversarial Orientati gtTo P Q Partnership Paradigm Suspicion competition arm s length Price ef ciency own pro ts Information and Feedback limited Lawsuits to resolve con ict Minimal involvement and LipFront investment Short term contracts Contracts limit the relationship ership Orientation 0 Trust value added to both sides Equity fair dealing everyone pro ts Ebusiness links to share information and conduct digital transactions Close coordination virtual teams and people onsite Involvement in partner s product design and producnon Longterm contracts Business assistance goes beyond the contract Copyright 2010 by SouthWestern a division of Cengage arning All rights reserved The Internal Environment Corporate Culture 3 Corporate culture should match the needs of the external environment The importance of corporate culture has been growing Culture is a pattern of shared values how things are done Culture Visible 1 Artifacts such as dress office layout symbols slogans ceremonies Culture that can be seen at the surface level T Invisible 2 Expressed values such as The Penney Ideaquot quotThe HP Wayquot 3 Underlying assumptions and Symbols quot deep beiiefs such as people here care about one another Stories like a familyquot Heroes Slogans Ceremonies Copyright 2010 by SouthWestern a division of Cengage earning All rights reserved 3 Environment and Culture The external environment influences culture The internal environment should embody the requirements for success Manager s must pay attention to culture Recognize the ways culture can help or hurt your department Visible Behavior Expressed Values Adaptive vs Unadaptive Corporate Culture Adaptive Corporate Cultures Managers pay close attention to all their constituencies especially customers and initiate change when needed to serve their legitimate interests even if39 it entails taking some risks Managers care deeply about custom ers stockholders and employees They also strongly value people and processes that can create useful change eg leadership initiatives up and clown the management hierarchy Unadaptive Corporate Cultures Managers tend to behave somewhat insu larly politically and bureaucratically As a result they do not change their strategies quickly to adjust to or take advantage of changes in their business envimnrnents Managers care mainly about themselves their immediate work group or some product or technology associated with that work group They value the orderly and riskreducing management process much more highly than leadership initiatives 20 Copyright 2010 by SouthWestern a division of Cengage arning All rights reserved Four Types of Corporate Culture E Strategic Focus internal Needs of the Environment Flexibility Stability Achievement culliqu Involvement Consistency Culture Culture 21 Copyright 2010 by SouthWestern a division of Cengage Learning All rights reserved Shaping Corporate Culture 3 for Innovative Response How people are treated increases a company s value Culture attracts motivates and retains talent Corporate culture enables learning andinnova on 22 Combining Culture and Performance Hi h r If Good for shortterm Both bottomline results bottom line but is lt and inspiration sustainable Sustainable success via a highperformance culture Attention to C D Business Performance May be going out of Strong culture is good business for morale but can Little emphasis on managers afford to keep results or values it up without business results V A B Low Low High Attention to Values 23 Copyright 2010 by SouthWestern a division of Cengage earning All rights reserved Cultural Leadership Articulate a vision for the organizational culture that employees can believe in The cultural leader heeds the daytoday activities that reinforce the cultural vision Managers communicate the cultural values through words and actions Cultural leaders uphold their commitment to values during difficult times 24 by SouthWestern a division of Cengage Learning All rights reserved 4 Learning Objectives W quot19 mm mm mm and ml m M 99mm mm fat today s masts v Desaiba mam entry strategies mm mm U b m9 fawn Human r De ne international mmm and explain W dmmmmmmm n mm mum operations t Indians haw 6mm in mmmic mm and WWMI muimm Maugham the work can affect Mm omnibus Learning Objectives contd u Describe m regional trading alliances are reshaping the Imamka business anviro nmem n Dvsc bo ma chamctaristies of multinational carporatbn 3 Explain cultural Intelligence and why it is necessary for managnrs working in Minn counties Importance of International Business If you are not thinking intamational you are not thinking business management A Borderless World a Businaes is becoming a uni ed glubal eld a Companies that think globally have a competitive edge 0 Domestic markets are saturated fur many companias u Consumers can no Innger hall from which countly they are buying Damesu 1 emahonal 3 Mullinatiunal 4 Global Slump nmmmn D mp va Mme Expanrorwmsrl Muhxnal nz bloM mu mmmm Shgn MDcvubpmunt mmmmnmw man Lumpcmwpusmurmw Exp umunuhruclmhuvml mum uyelanous wmISensmmy ow qu mpmmme vgmmwm SNVWMMpmum mm mpununl ManagerAssump nni my hm waf Nanv g m ways39 quot w m My us way Mmy gwd wavs Four Stages of Globalization mmmnlmbmmm mmmmm ngmmam Knocking myma yldnphamu imew mmmmmmm mm mm mum 15nfibalummmmnuy W mumammmmumhmmm gigsmemmmm 1nd hip mud Global stateless Corporations 0 Number is increasing a Awareness of na onal borders damashg u Carporme Examphas Fred Hamn Pakistanbarn CEO 0 Schema Plough Mexicoborn Famandu Aguim CEO of Chiquita Brands ngh InnId mura an Low High amen i Getting Started Internationally o Mamet Entry Strategy An organizational strategy far entering a foreign marks a Gtobal Outwardng cffshoring Engaging in the international divisinn of labor manomhmmmmumdhbor and supplies rogurdm of county Also talent am who International Environment Factors 51W b 5 WM EUR mm hm mm mm mm u may Lm nu mun mm Mm mm m nunm Mm rm mm Economic Environment Factors Infrastructure rates Inflation I Interest rates I I Economic growth I prynng 2m wsmmmm a ammarmmsmumng A ngmmsema Economic Development bunnies categorized as Mpinf or dovahpad Criterion mind to cm y is per capital imam 1 Demlnping countries have low par Gupta imam LDCsbcntsdinAsiaA icnandSomhAmerica c Developed are North America Europe 3 Japan Driving glubnl grown in Asia Eastern Europe a Latin America Infrastructure A wuntry39s physical facilities that support economic activities 0 Airports highways and railmads Energyproducing facilities a Communication facilities Resource and Product Markets Men operating in another country Mummers mua evaiuate market demand To dawtop plants mam made must be awihbla raw num ab and abut Corpurata Example McDonald Exchange Rates s Rate at which ans country39s currency is exchanged for ano 39ner country39s o Has become a major mnGom for companies doing businea internationally Chang in the axehangs rate can have rmjm implicaticns for pro tability of intama onal operations The LegalPolitical Environment a Political Risk due no wants nr actions by host gavamments a LG Di 35m Lass a gaming poww Loss of mali control Governme takeovers Ads of mm o Evans sum as riots revalutions or gnvemment upheavals that affect the aparations of an international campany Laws and Regulations 0 Government laws and regulations differ from country to county 0 Make doing business a m challenge for intamatiunal rms in Internet has increased impala of fomign laws on US cumpanias expands potential for doing business on global basis Sociocultural Environment a Culture shamd howledge beliefs values common modes of behavior and ways of thinking among members of a society Immibh Fennaive mm for outsider to lam Managers naed tn undamtand dif arence in social values in oompmhend local cultures and deal with them re ectiwa Hofstede s Value Dimensions o Rm national vane W in uence Wm am W mm In ow r v high 1mm Muslim mc ame umnlbmbla with MM 1ividuallw crtlsct39w ind widualm 18k cm at Manrum 71511423 Lni f i i 31 9mm scrimMW 7mm for I y I ng mrmmm W 5 dimnsicm mvmm 1 u 1 Ausmea 7 7 Costa Rica 8 no 2 me France 3 2 me We Germany 8 Us 5 lniiwa 2 539 Japan 5 1 Mama 1 4 weden 10 10 Thallanrl 4 6 UWKL39U Stale 6 8 quot zmgnm pawer msmnm m S nose amm quot 17mm wvmnamxy avnda Vo nwml umnmy avmdumn o ACWWNO V AdN mghesuldmduahxm 10mqharmuemmim Hughes masruhnily mng cmmmuy boa N axwwom o GLOBE Value Dimensions v 39 rm More comprehensive View of cultural similarities and differences Assam Miriam Funquot mm WWW WW mummim WNW Putnammus Gum orientation mm Humommtxiun International Cultural In uences o Other Cultural Characbaris cs Language Religion W635 Social Organization Edwation o Linguistic plurallam several languages exist 1 Ethnooantrism regard awn culture superior 39 W5quot 55quot changes in boat W m39 W grow an 45f imami onal bade ammm GATT WTQ EU NKFTA lriurriiiii39mml rrli lili lm General Agreement on Tariffs and Trade GATT Signed by 23 nations in 1947 as a set of rules Ensured nondiscrimination clear procedures negotiation of disputes and participation of lesser developed countries in international trade Today 149 member countries abide by the rules Primary tools WTO uses on tariff concessions countries agree to limit level of tariffs on imports from other WTO members Most favored nation clause WTO 1 Goal is to guide and sometimes urge the nations of the worid toward free trade and open markets Encompasaas GATT and all of its agresmenha Q PartIy responsible for backlash against gbbal trade European Union I Farmed in 1957 a improva ocenamic and social conditions E Has gmwn tn 25 hation animus 0 Initiative Europe 92 called for creation of open markeu for Europe s 34G milllon summers 1 Biggest expansion in 2004 10 new members from southern and 338mm Eumpe cu Obsewers feared EU womd become a trade barrier a EU monetary revolution introduction of the Euro trl lll lll l ii In i i Hv l39i fi l ll z lll Went into effect on January 1 1994 Merged the United States Canada and Mexico with more that 421 million consumers Breaks down tariffs and trade restrictions on most agriculture and manufactured products August 12 1992 agreements in number of key areas include agriculture autos transport amp intellectual property January 2004 10th anniversary success and failure Other Trade Alliances I The Assonia an of Sou eas Asian Nations ASEAN Meme Argm na Bruit Bolivia cums Pamguay Uruguay The Central American Free Trad Wm CAFTA a Fm Trade Area of the Amaricas FTAA Multinational Corporations MNC a Receives gt25 mm sales revenues from operations amide parent company s home country Managed as integrated unmade business system Comm ed by singh management 3M Top managers exercise Nona perspaam liirizlgigig m y 1 li siill ilil Managers must be sensitive to cultural subtleties 9 Personal challenges culture shock 0 Managing crossculturally Leading Decision making Motivating Controlling Managers must be culturally flexible and easily adapt to new situations Managerial Planning and Goal Setting Learning Outcomes Define goals and plans and explain the relationship between them Explain the concept of organizational mission and how it influences goal setting and planning Describe the types ofgoals an organization should have and how managers use strategy maps to align goals Define the characteristics of effective goals Describe the four essential steps in the management by objectives MBO process Explain the difference between singleuse plans and standing plans Describe and explain the importance of contingency planning scenario building and crisis planning in today s environment Summarize the guidelines for highperformance planning in a fast changing environment Copyright 2010 by SouthWestern a division of Cengage Learning All rights reserved Does Goal Setting Fit Your Management Style Managers must plan where the organization should go in the future Managers must plan for unexpected events The company establishes a basic mission and develops goals and objectives Plans should meet environmental changes and expectations of stakeholders Planning is fundamental to all organizations Everything stems from planning Overview of Goals and Plans A goal is a desired future state that the organization attempts to realize A plan is a blueprint for goal achievement There are different levels of planning and goals in an organization Goals at each level of the organization guide the organization Levels of Goals Plans and their Importance External Message Legitimacy for investors customers suppliers community Strategic GoalsPlans Senior Management Organization as a whole Tactical GoalsPlans Middle Management Majar dlvlslons unctlons Operational GoalsPlans Lower Management Departments individuals Characteristics of Goals and Plans Legitimacy Source of motivation and commitment Resource allocation Guides to action Rationale for decisions Standards of performance The Organizational Planning Process 2 Translate the Plan I Define tactical plans and objectives I Develop strategy map I Define contingency plans and scenarios I Identify Intelligence teams I Hold planning reviews I Hold operational revlews Use I Management by objectives I Performance dashboards I Single use plans I Decentralized responsibility I Define operational goals and plans I Select measures and targets I Set stretch goals I Crisis planning 39 7 Organizational Mission The mission statement is the reason the organization exists Top of the goal hierarchy Describes the values aspirations and reason for being A welldefined mission is the basis for all other goals Mission statements outline the stated purpose and values to stakeholders Types of Goals and Plans Strategic Goals official goals broad statements about the organization Define the action steps the company intends to attain The blueprint that defines activities Tactical Goals help execute major strategic plans Specific part of the company s strategy Plans of the divisions and departments Operational Goals results expected from departments work groups and individuals Lower levels of the organization Specific action steps 9 Copyright 2010 by SouthWestern a division of Cengage Learning All rights reserved Aligning Goals with Strategy Maps Goals should be consistent and mutually supportive The achievement of goals at low levels permits the attainment of highlevel goals Individuals teams and departments should be working in concert Strategy Map for Aligning Goals I Accomplish Illusion Create Optimal Value 1m 1 Goals should be consistent and mutually supportive Operational Planning Operational goals should direct employees and resources toward outcomes It is important to establish effective goals Management by objective Singleuse plans Standing plans Learning All rights re eeee d Characteristics of Effective Goal Setting Innal Characteristics Speci c and measurable De ned time period Caver key result areas Chailenging but realistic Linked to rewards Copyright 2010 by SouthWestern a division of Cengage Learning All rights reserved Management by Objective Defined by management scholar Peter Drucker in his 1954 book The Practice of Management Process of defining goals and monitoring progress Learning All rights re eeee d Model of the MEG Process Step 1 Set Goals Step 2 DeveIOp Action Plans Review Progress Step 3 Revlew Progress Step 4 Anpraise Overall Performance MBO Benefits and Problems Bene ts of M30 Problems with M30 1 Manager and employee efforts are Focused on I Constant change prevents MBO From taking activities that will lead to goal attainment hold 2 Performance can be improved at all cempany 2 An environment 0F poor employeremployee levels relations reduces MBO effectiveness 3 Employees are motivated 3 Strategic goals may be displaced by 4 Departmental and individual goals are aligned oPerational goalsv with company goals 4 MechaniStit Organizations and values that discourage participation can harm the M80 process 5 Too much paperwork saps MBO energy Single Use and Standing Plans SingleUse Plans Standing Plans Program 0 Plans For attaining a onetime organizational goal 0 Major undertaking that may take several years to complete O Large in scope may be associated with several projects Examples Building a new headquarters Converting all paper les to digital Project 0 Also a set of plans For attaining a onetime goal 0 Smaller in scope and complexity than a program shorter in horizon 0 OFten one part ofa larger program Examples Renovating the oF ce Setting up a company intranet Policy 0 Broad in scope general guide to action 0 Based an organization s overall goalsstrategic plan 39 De nes boundaries within which to make decisions Examples Sexual harassment policies Internet and email usage policies Rule Narrow in scope 39 Describes how a speci c action is to be performed 39 May apply to speci c setting Examples No eating rule in areas oFcompany where employees are visible to the public Procedure Sometimes called a standard operating procedure 0 De nes a precise series of steps to attain certain goals Examples Procedures for issuing reFunds Procedures for handling employee grievances Planning for a Turbulent Environment Contingency Planning plans for emergencies setbacks or unexpected conditions Building Scenarios visualizing future possibilities Crisis Planning preparing to cope with unexpected events Essential Stages of Crisis Planning Crisis Planning Prevention 0 Build relationships Datect signals From environment Preparation 5 Designate crisis management team and spukesperson 339 Create detaiied crisis management plan I SEE up effective mmmunications sysvzem Planning for High Performance Traditional Approach HighPerformance Done by top ApproaCh executives top down Decentralized planning Central planning Managers plan departments throughout the Planning specialist organization Now involves line Stretch Goals and Big managers and Hairy Audacious employees Goals BHAG are big Dynamic plans for fast and inspiring changing needs 20 Performance Dashboard for Planning CELEQUESTquot AnnaSewn Ukrmusunnqs mas o G a uge p 9 r 38 J Wammm Wm 1 mluatlm Ir Edi Dm 39 r hawk 3939 E Ides S Da39 baevdl v owa r 903 s W 1 no r7 m Vahx Cu Damask I mm ms swoon Deml 39 9 E WWW 2 g gt 39 All n and tra Ck W mkmurkcd Dam x o m m M 1 I 9 wk g III All Nan Mamas DEER w 7 7 i th Lun Eltkldnd Nulmal GI INZN IRES E It Milktl 39EN IGIEQIIWMI related U Nmml UlO V ZWS 65550 B Hake zed CHI RB nu Willa WeaL Normal INN2005 As l Urdu Dulyltnnrl randy MumI nlnIZ s I a All employees can track progress 2 Nahum m we mum Nowhal 3w Marwarn Equzy 5m 1 eon zsoo Mill y W a a M g9 9 y 21 Strategy Formulation and Implementation Learning Outcomes Define the components of strategic management and discuss the levels of strategy Describe the strategic management process and SWOT Analysis Define corporatelevel strategies and explain the portfolio and diversification approaches Describe Porter s competitive forces and strategies Discuss new trends in strategy including innovation from within and partnership strategies Discuss the organizational dimensions used for strategy execution Copyright 2010 by SouthWestern a division of Cengage a a r ninn All rink raearwarl How do you handle challenges and issues How did Best Buy overtake Circuit City as the player to beat in consumer electronics retailing The strategies managers choose are important Strategies must be implemented effectively to work Strategy Basics Why has Apple been so successful with the iPod iTouch iPhone Why has McDonald s healthier menu been effective Finding ways to respond to competitors and cope with change is strategy Thinking Strategically The longterm view Seeing the big picture The organization HOW 0390 these fit Competition together Strategy are your competitive actions in the market What is Strategic Management Plans and actions that lead to superior competitive standing gtWho are our competitors and what are their strengths and weaknesses gtWho are our customers gtWhat products or services should we offer gtWhat does the future hold for our industry gtHow can we change the rules of the game Purpose of Strategy Strategy Plan of action Resource allocation Activities for dealing with the environment Achieving competitive advantage Strategy should Exploit Core Competence Build Synergy Deliver Value 7 Three Levels of Strategy in Organizations CorporateLevel Strategy What business are we in BmsinessLevel Strategy How do we compete 39mquotl 39 1 1 M131 quotHIKEquot l vf W31 mtquot MM FunctionalLevel Strategy How do we support the business level strategy m Levels of Strategy What business are we in y Corporatelevel strategy How do we compete V Businesslevel strategy HOW d We support gtFunctionaIIeve strategy the busmessIevel strategy 9 Strategy Formulation Versus Execution Strategy Formulation Assess environment and internal problems Planning Decision making Establishment of goals Strategy Execution Directing resources Accomplishing results Changes in structure Use managerial and organizational toos The Strategic Management Process I v Implement strategy I t 39 39 I Goals as gt I Corporate gt Structure I Strategies I I Business I Human resources I Grand mama I Functionai Infannation and It control systems 1k SWOT Analysis Assessment of internal and external factors Organizational External information strengths weaknesses about opportunities opportunities and and threats threats Customers Reports Government reports Budgets Professional journals Financial ratios Bankers Employee Surveys Consultants Association meetings 12 Analyzing Organizational Strenths and 5f eaknesses Management and Organization Marketing Human Resources Management quality Distribution Channels Employee experience education Staffquality Market share Union status Degree O Fcentralization Advertising ef ciency Turnover absenteeism Organization charts Customer satisfaction Work satisfaction Planning information Product quality Grievances comm 5Y5Wm5 Service reputation Sales force turnover Research and Finance Production Development Pro t margin Plant location Basic applied research Debt equity ratio Machinery obsolescence Laboratory capabilities Inventory ratio Purchasing system Research programs Return on investment Quality control New product innovations Credit rating Productivitw er ciency Technology innovations Formulating Corporate Level Strategy Portfolio Strategy A diverse mix of business units Strategic Business Units SBU have different products mission markets and competitors The BCG Matrix Organizes businesses along two dimensions growth and market share Diversification Strategy Movement into new lines of business The BCG Matrix High Market Share Low High Stars Question Marks Rapid growth and New ventures Risky a few expansion become stars others are divested k i 0 Business 0 3 Cash Cows Dogs Miik to nance question No investment Keep if marks and stars some pro t Consider divestment Low Formulating BusinessLevel Strategy Porter s Five Forces analyzing a company s position in the industry gtPotential New Entrants gtBargaining Power of Buyers gtBargaining Power of Suppliers gtThreat of Substitute Products gtRivary Among Competitors Porter s Five Forces Internet reduces barriers to entry 39 Internet blurs differences among competitors Bargaining Power of Buyers Internet creates new substitution threats Internet shifts greater power to end consumers Internet tends to increase bargaining power of suppliers Porter s Competitive Strategies Porter suggests that a company can adopt one of three strategies after analyzing the forces Strategy Organizational Characteristics Differentiaan Acts in a exible loosely knit way with strong coordination among departments Strong capability in basic rewards Creative flair thinks out ofthe boxquot Strong marketing abilities Rewards employee innovation Corporate reputation For quality or technological leadership Cost Leadership Strong central authority tight cost controls Maintains standard operating procedures Easy touse manufacturing technologies Highly eF cient procurement and distribution systems Close supervision nite employee empowerment Focus Frequent detailed control reports May use combination ofabove policies directed at particular strategic target Values and rewards exibility and customer intimacy Measures cost of providing service and maintaining customer loyalty Pushes empowerment to employees with customer contact New Trends in Strategy Mergers and acquisitions Enhancing organizational capacity Innovation from within Strategic partnerships Companies are focusing on internal innovation as well as innovation through strategic partnerships Global Strategy Finding strategies in the world marketplace Synergy among world operations Organizations differ in their global strategies Globalization Export Transnational Multidomestic 20 Global Corporate Strategies High Globalizi ilii strategy 39 Treats wndd as a single globa39l market 39 Standardizesglghal productja39dyertislng strategies Mumdomestlc Strategy Handles markets independently for each country Adapts product advertising to local tastes and needs Need for Global Integration Low High Need for National Responsiveness 21 Strategy Execution How will the strategy be implemented put into action The organization must be congruent with the strategy Execution involves several tools Leadership Structural Design Human Resources Information and Control Systems 22 Tools for Putting Strategy into Action Environment Organization Leadership 0 Use persuasion Motivate employees a Shape culturevalues Structural Design Human Resources Design organization chart Recruitselect employees k Create teams 7 7 0 Manage transferspromotions Deterrnme centralization training If decentralization Direct la offs recalls Arrange facilities task design y f Strategy Performance Information and Control Systems o Revise pay reward system Change budget allocations Implement information systems Apply rulesprocedures 23
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