Mgmt 309 Exam 1

The Task Environment (the second half of the External Environment)

specific organizations or groups that influence and organization > most organizations focus their attention here because the impact of the general environment is often vague, imprecise, and long term

What constitutes the task environment?

strategic partners, regulators, competitors, customers, and suppliers

International Business

Based primarily in a single country but acquires some meaningful share of its resources or revenues (or both) from other countries

How is Social Responsibility managed?

By being seen as a major challenge requiring careful planning, decision making, consideration and evaluation

The four levels of int'l activity

Domestic, International, Multinational, Global

The Contingency Perspective

suggests that appropriate managerial behavior in a given situation depends on, or is contingent on, a wide variety of elements > universal perspective: an attempt to identify the one best way to do something

First-line

supervise + coordinate employees, supervisor/coordinator/office manager

The government influences organizations ________ and _______

directly and indirectly

The five dimensions of the general environment

economic, technological, sociocultural, political-legal, international

Successful organizations are both

efficient + effective

Decisional Managerial Role

entrepreneur - voluntary initiator of change disturbance handler - handling problems in strikes/copyright/PR/corporate image resource allocator - decides how resources are distributed and with whom they work most closely negotiator - enters into negotiations with other groups as a representative of the company

How does the environment affect organizations?

environmental change and complexity, competitive forces, and environmental turbulence

External environment

everything outside an organization's boundaries that might affect it > the general environment > the task environment

Charles Babbage

focused attention of efficiencies of production, wrote on the economy of machinery and manufactures, and originator of modern management theory and practice, division of labor, mathematician

Board of directors

governing body elected by a corporation's stockholders and charged with overseeing the general management of the firm to ensure that it is being run in a way that best serves the stockholders' interests. > becoming more strict because of scandals > issue of corporate governance

The four basic kinds of resources organizations use from their environment

human, financial, physical, and information

Information Management

important when forming initial understanding of the environments and monitoring them for signs of change techniques: > relying on boundary spanners (employees who spend much of their time in contact with others outside the org) > env scanning: the process of actively monitoring the environments through activities such as observation and reading

How do organizations adapt to their environments?

information management, strategic response, mergers/acquisitons/alliances, organization design and flexibility, and direct influence

Managerial Roles

interpersonal, informational, decisional

LEAD

l - ead with a clear purpose e - mpower to participate a - im for consensus > not for 100% agreement, but 100% support d - irect the process

Middle managers

largest group, plant manager, operations manager, division head, responsible for implementing what the top managers put into place and for supervising/coordinating lower-level managers, growing smaller

Formal Organizational Actions

legal compliance, ethical compliance, philanthropic giving

Strategic Response

maintain the status quo, alter strategy, adopt entirely new strategy

Effective

making the right decisions and successfully implementing them

Areas of Management

marketing, financial, operations, hr, administration (generalists), other

Three different elements of a Global Economy

mature market economies and systems, high-potential/high-growth economies, other economies

Other economies

middle east + oil

Informational Managerial Role

monitor - actively seeks info that may be of value disseminator - transmitting relevant info back to others in the workplace spokesperson - formally relays info to people outside

Controlling

monitoring organizational progress toward goal attainment

When did the study of management begin?

nineteenth century

What are the four organizational approaches to Social Responsibility?

obstructionist stance, defensive stance, accommodative stance, proactive stance

Ethics

one's personal beliefs about whether a behavior, action, or decision is right or wrong > defined in the context of the individual

Informal Organization Actions

organization leadership and culture, whistle-blowing

Areas of social responsibility

organizational stakeholders, the natural environment, general social welfare

What constitutes the Internal Environment of an organization?

owners, board of directors, employees, physical work environments, and cultures

Decision making

part of the planning process that involves selecting a course of action from a set of alternatives

The four basic managerial functions/activities

planning and decision making, organizing, leading, and controlling

Robert Owen

recognized the importance of an organization's HR, better working conditions, british industrialist

Top managers

relatively small, president, vp, ceo, create goals, overall strategy and operating policies, represent the organization to the external environment

Planning

setting an organization's goals and deciding how best to achieve them

Manager

someone whose primarily responsibility is to carry out the management process

nothing becomes dynamic unless it is ___________

specific

The Systems Perspective

system: an interrelated set of elements functioning as a whole figure 2.3, page 49 > consists of inputs, transformation processes, outputs, feedback, and viewpoints on organizations (open systems, closed, subsystem, synergy, entropy)

Social learning theory

tailhook example

Managerial Skills

technical, interpersonal, conceptual, diagnostic, communication, decision-making, time-management

Internal environment

the conditions and forces within an organization

Sociocultural dimension of the general environment

the customs, morals, values, and demographic characteristics of the society in which the organization functions

Definition of "levels of management"

the differentiation of managers into three basic categories: top, middle, and first-line

What makes up the environmental challenges of international management? (figure 5.2 page 150)

the economic environment, the political-legal environment, and the cultural environment

ethnicity

the ethnic composition of a group/organization

international dimension of the general environment

the extent to which an organization is involved in or affected by business in other countries

political-legal dimension of the general environment

the government regulation of business and the relationship between business and government

How to manage organizational culture

the manager must understand the current culture. if he wants to change it, there must be a clear idea of what is needed. a way to change this is to import outsiders to leadership

Technological dimension of the general environment

the methods available for converting resources into products or services > improved IT > more efficient operating systems

Importing + Exporting

- Usually the first type of international business a firm is involved in - Exporting: making a product in the firm's domestic marketplace + selling it to another country - Importing: bringing a good, service, or capital into the home country from abroad

General Agreement on Tariffs and Trade (GATT)

- A trade agreement intended to promote int'l trade by reducing trade barriers and making it easier for all nations to compete in int'l markets - Key component: most favored nation (MFN) principle > If a country extends preferential treatment to any other nation that has signed the agreement, the same must be extended to all signatories of the agreement

The Economic Environment

- Economic System > Most moving toward a market economy > Freedom of choice > Property ownership □ Complete private ownership □ Complete public ownership - Natural Resources - Infrastructure > The schools, hospitals, power plants, railroads, highways, ports, communication systems, airfields, and commercial distribution systems of a country

The Political-Legal Environment

- Government Stability > Nationalized: taken over by a national government - Incentives for Int'l Trade > Reduced interest rates on loans, construction subsidies, tax incentives - Controls on Int'l Trade > Tariff: a tax collected on goods shipped across national boundaries > Quota: a limit on the number or value of goods that can be traded -Most common -Usually to ensure domestic competitors are still in the game -Export restraint agreements: accords reached by governments in which countries voluntarily limit the volume or value of goods they export to or import from one another > Economic Community -A set of countries that agree to markedly reduce or eliminate trade barriers among member nations (a formalized market system) -EU, NAFTA

How organizations influence government

- Personal contacts - Lobbying: the use of persons or groups to formally represent an organization or group of organizations before political bodies to influence the government - Political Action Committee (PAC): an organization created to solicit and distribute money to political candidates - Favors > Not illegal but subject to criticism >About how they are perceived

Management challenges in a global economy

- Planning and Decision Making in a Global Economy - Organizing in a Global Economy - Leading in a Global Economy - Controlling in a Global Economy

The Cultural Environment of Int'l Management

- Values, Symbols, Beliefs, and Language - Individual Behaviors Across Cultures > Figure 5.4 **** > Social orientation > Power orientation > Uncertainty orientation > Goal orientation > Time orientation

Quantitive Management Perspective

- emerged in wwII - consists of > management science: focuses on mathematical models > operations mgmt: helping the organization more efficiently product its products/services table 2.4, page 48

The Behavioral Management Perspective

- emphasized individual attitudes and behaviors and group processes - hugo munsterberg much more emphasis on behavioral processes in the workplace - studies at western electric's hawthorne plant: > human relations movement: argued that workers respond primarily to the social context of the workplace > maslow + mcgregor > theory x: pessimistic/negative consistent with scientific management > theory y: positive/represents the assumptions that human relations advocates make table 2.3 page 45

Emerging ethical issues in organizations

- ethical leadership - ethical issues in corporate governance - ethical issues in IT

Apply moral judgment

- gather the relevant factual info - determine the most appropriate moral values - make an ethical judgment based on the rightness/wrongness of the proposed activity or policy - various ethical norms (utility, rights, justice, caring) - maintaining organizational justice

Globalization + organization size

- multinational corpoations - medium-size organizations - small orgs

Determinants of organizational culture

- typically develops and blossoms over a long period of time - usually starts with the founder

What are the two sets of challenges in the process of globalization?

- when an org chooses to change its level of int'l involvement - the other when the org has achieved its desired level of int'l involvement and they must function effectively in that environment

Organization Design

> mechanistic: formal and rigid rules/relationships > organic: more flexible

Strategic Alliances

A cooperative arrangement between two or more firms for mutual gain - Joint venture >A special type of strategic alliance in which the partners share in the ownership of an operation on an equity basis >Becoming more popular

Sarbanes-Oxley Act

A law passed in 2002 that requires CEOs and CFOs to personally vouch for the truthfulness and fairness of their firms' financial disclosures

Defensive Stance

A social responsibility stance in which an organization does everything that is required of it legally, but nothing more

Domestic Business

Acquires all of its resources and sells all of its products or services within a single country > Most small business are here

Obstructionist Stance

An approach to social responsibility in which firms do as little as possible to solve social or environmental problems

Licensing

An arrangement whereby one company allows another to use its brand name, trademark, technology, patent, copyright, or other assets in exchange for a royalty based on sales

Accomodative Stance

An organization meets its legal and ethical obligations but will also go beyond these in selected cases > knock and ask

Proactive Stance

An organization views itself as a citizen in a society and proactively seeks opportunities to contribute

World Trade Organization (WTO)

An organization which currently includes 161 member nations and 23 observer countries, that requires members to open their markets to international trade and follow WTO rules

Diversity

Exists in a group or organization when its members differ from one another along one or more important dimensions, such as age, gender, or ethnicity > a continuum

True or False: all parts of the environments are equally important for all organizations

False

Key question for a manager wanting to be effective internationally

Focus on globalization or regionalism?

Multinational Business

Has a worldwide marketplace from which it buys raw materials, borrows money, where it manufactures its products, and to which it subsequently sells its products

Strategies when increasing international activity

Importing + exporting, licensing, strategic alliances, direct investment

High-potential/high-growth economies

In contrast to mature market economies and systems Relatively undeveloped and immature and until recently have been characterized by weak industry and currency, and poor consumers. The governments here, however, actively have been working to strengthen their economies by opening their doors to foreign investment and by promoting international trade Ex: China, India, Vietnam, Brazil, Russia, South Africa

Regionalism

Involves managing within each region with less regard for the overall organization

Mature market economies and systems

Market economy: based on the private ownership of business, and it allows market factors such as supply and demand to determine business strategy Ex: US, Canada, Japan, UK, France, Germany, Sweden Characterized by private ownership, employing market forces in the allocation of resources Market systems: clusters of countries that engage in high levels of trade with one another Ex: North America, Europe, Pacific Asia (in Southeast Asia) North American Free Trade Agreement (NAFTA): an agreement made by the US, Canada, and Mexico to promote trade with one another European Union (EU): the first and most important international market system

Organizational Stakeholders

Person or organization who is directly affected by the practices of an organization and has a stake in its performance

Direct governmental influences on organizations

Regulation: government's attempts to influence business by establishing laws and rules that dictate what businesses can and cannot do > Evolves from societal ethical beliefs > Special agencies > Levy fines or bring charges > legislation

Globalization

Require that activities be managed from an overall global perspective as part of an integrated system

Indirect governmental influences on orgs

Tax codes

Multiculturalism

The broad issues associated with differences in values, beliefs, behaviors, customs, and attitudes held by people in different culture

Social Responsibility

The set of obligations an organization has to protect and enhance the societal context in which it functions

Organization Culture

The set of values, beliefs, behaviors, customs, and attitudes that helps the members of the organization understand what it stands for, how it does things, and what it considers important > amorphous concept/defies objective measurement or observation > determines the "feel" of an org

Global Business

Transcends national boundaries and not committed to a single home country > Although no business has truly achieved this, a few are getting closer and closer

Direct Investment

When a firm headquartered in one country builds or purchases operating facilities or subsidiaries in a foreign country - Maquiladoras > Light assembly plants built in northern Mexico close to the US border that are given special tax breaks by the Mexican government > Most pronounced in garment industry

Theory

a conceptual framework for organizing knowledge and providing a blueprint for action (grounded in reality)

Code of Ethics

a formal, written statement of the values and ethical standards that guide a firm's actions

Organization

a group of people working together in a structured and coordinated fashion to achieve a set of goals

glass ceiling

a perceived barrier in some organizations that keeps women from advancing to top management positions > a real barrier hard to break but subtle and hard to see

Management

a set of activities (including planning and decision making, organizing, leading and controlling) directed at an organization's resources (human, financial, physical, and information) with the aim of achieving organizational goals in an efficient and effective manner

regulators

a unit that has the potential to control, legislate, or otherwise influence the organization's policies and practices > regulatory agencies > interest groups

How can we classify managers? (two ways)

according to 1) their level in the organization 2) the area in which they work

Dimensions of Diversity and Multiculturalism

age, gender, ethnicity

Strategic Partners

also called strategic allies / the organizations that work together in a joint venture or similar arrangement to help companies get from other companies the expertise they lack. they spread risk and open new market opportunities, and most are among int'l firms

An organization is made up of:

an external environment and an internal environment

suppliers

an organization that provides resources for other organizations

Ethical Behavior

behavior that conforms to generally accepted social norms

Unethical Behavior

behavior that does not conform to generally accepted social norms

Evaluating Social Responsibility in an organization

can be done through a corporate social audit > A formal and thorough analysis of the effectiveness of a firm's social performance ○ Usually conducted by a task force of high-level managers in the firm

Interpersonal Managerial Role

can be either: figurehead - ceremonial + symbolic leader - hiring/training/motivating employees liaison - serving as coordinator or link

An Integrating Framework

classical, behavioral and quantitive management perspectives can be complementary, and the systems and contingency perspectives can help integrate them. > before managers try to apply concepts or ideas from the 3 major perspectives, they must - recognize the interdependence of units within the org - the effect of env. influences - the need to respond to the unique characteristics of each situation figure 2.4, page 51

Classical Management Perspective

consists of the scientific management and administrative management scientific - concerned with improving the performance of individual workers > soldiering: deliberately working at a slower pace > f.w. taylor "principles of sm" > webber, bernard administrative - focuses on managing the total organization > fayol: planning, organizing, leading, controlling Lindell Urwick: put them together/known as great architect of management table 2.1, page 42

Organizational Behavior

contemporary field focusing on behavioral perspectives on management - current view on management - holistic view

Organizing

determining how activities and resources are to be grouped

Economic dimension of the general environment

the overall health and vitality of the economic system in which the organization operates

Organizational Justice

the perceptions of people in an organization regarding fairness forms: > distribute: people's perceptions of the fairness with which rewards and other valued outcomes are distributed within the org > procedural: individual perceptions of the fairness used to determine various outcomes > interpersonal: the degree of fairness ppl see in how they are treated by others in their org > informational" refers to the perceived fairness of info used to arrive at decisions

What is the general environment? (first half of the external environment)

the set of broad dimensions and forces in an organization's surroundings that create its overall context

Leading

the set of processes used to get members of the organization to work together to further the interests of the organization (considered to be the most important + most challenging)

Managerial Ethics

the standards of behavior that guide individual managers in their work > how an org treats its employees > how employees treat the org > how employees + the org treat other economic agents

The ethical Pygmalion effect

the way I think about you is probably the way you will become

When we face ethical dilemmas:

they reveal something about us, test something about us, and shape something about us

competitive forces

threat of new entrants, competitive rivalry (the nature of the competitive relationship between dominant firms in an industry), threat of substitute products, the power of buyers, the power of suppliers

How can you best understand the concept of management?

through a resource-based perspective; it is elusive

uncertainty

unpredictability created by environmental change and complexity the rate of change + the degree of homogeneity = uncertainty > dynamic but simple = moderate degree > stability and complexity = moderate degree > very dynamic and complex environmental conditions = high degree

Efficient

using resources wisely and in a cost-effective way

Owners

whoever can claim property rights to an organization

competitors

whoever mays money to acquire an organization's products or services > don't have to be individuals

Where do ethics start?

with top management

"Umweo Wamuntu wab mukutwi"

your life is in your ear

Arguments in favor of social responsibility

• Business creates problems and should therefore help solve them • Corporations are citizens in our society • Business soften has the resources necessary to solve problems Business is a partner in our society, along with the government and the general population

Arguments against social responsibility

• The purpose of business in the US society is to generate profit for owners • Involvement in social programs gives business too much power • There is potential for conflicts of interest Business lacks the expertise to manage social programs