Principles of Management - Module 2: Managing in a Business Environment

What is the importance and impact of a strong organizational culture?

A strong organizational culture is one in which employees hold the values of the company in high regard. There is a strong sense of camaraderie among employees and they agree on what is important. Strong cultures lead to loyalty among employees, and are associated with high organizational performance. However, innovation is usually low and employees hesitate to try new approaches.

What is a global company?

A type of MNC that centralizes management and other decisions in the home country. (Reflects the ethnocentric attitude)

What is a transnational or borderless organization?

A type of MNC that eliminates artificial geographical barriers. (Reflects a geocentric attitude)

What is a geocentric global attitude?

A world-oriented view that focuses on using the best approaches and people from around the globe.

What is workplace spirituality?

An ethical culture where organizational values promote a sense of purpose through meaningful work that takes place in the context of community. The five cultural characteristics of spiritual organizations are 1) strong sense of purpose 2) focus on individual development 3) trust and openness 4) employees empowerment and 5) tolerance of employee expression. Limited evidence suggests that spirituality may be compatible with profitability.

What is the International Monetary Fund?

An organization of 188 countries that promotes international monetary cooperation and provides policy advice, temporary loans, and technical assistance to establish and maintain financial stability.

What are the three possible global attitudes that managers could hold?

Ethnocentric, polycentric, and geocentric.

What is the World Trade Organization?

Founded in 1995 and comprised of 155 countries, it is the only *global* organization that deals with the rules of trade among nations, both promoting and protecting global trade by counteracting risks.

What are the two major economic systems?

Free Market Economy: An economic system in which resources are primarily owned and controlled by the private sector, and Planned Economy: An economic system in which economic decisions are planned by a central government.

What are some chalenges of global management in today's world?

Greater threat of terrorism because of openness between countries; Economic interdependence could lead to the fall of many economies if one falters; Extreme cultural differences which require cultural intelligence and a global mindset on the part of the managers.

What is a Stakeholder?

Groups that have a stake in or are significantly influenced or affected by what the decisions and actions of an organization. Top stakeholders include: 1) Customers 2) Social and Political Action Groups 3) Competitors 4) Trade and Industry Associations 5) Governments 6) Media 7) Suppliers 8) Communities 9) Shareholders 10) Unions 11) Employees.

How does a strong organizational culture affect the controlling aspect of management?

How employees will be evaluated, the consequences of going over budget, and whether to impose external controls or to allow employees to control their own actions.

What are the seven distinct dimentions of organizational culture?

1) Attention to detail, (how precise employees are) 2) Outcome orientation, (focus on results not on how they are achieved.) 3) People orientation, (focus on how management decisions affect people in the company.) 4) Team orientation, (When work is completed by teams rather than individuals) 5) Aggressiveness, (a competitive nature rather than a cooperative one.) 6) Stability, (Maintaining the status quo.) and 7) Innovation/risk, (Encouraging employees to share their ideas and to take chances.)

What are three current issues in organizational culture?

1) Creating an innovative culture 2) Creating a customer-responsive culture 3) Nurturing workplace spirituality

What are the three top regional trading alliances?

1) European Union -EU (A union of 27 European nations, 17 of which have adopted the euro.) 2) North American Free Trade Agreement -NAFTA (An agreement among Mexican, Canadian, and U.S. governments in which barriers to trade have been eliminated.) 3) Association of Southeast Asian Nations -ASEAN (A trading alliance of 10 southeast Asian nations.)

What are the nine dimensions of cross-cultural leadership behaviors/variations of national culture as asserted by GLOBE and based on the studies by Hofstede? (Global Leadership and Organizational Behavior Effectiveness)

1) Power distance; 2) Uncertainty avoidance; 3) Assertiveness; 4) Humane Orientation; 5) Future Orientation; 6) Institutional Collectivism; 7) Gender Differentiation; 8) In-group collectivism; 9) Performance Orientation

What are three primary issues facing managers in a global environment?

1) The Legal-Political Environment (The laws and political situations of other countries) 2) The Economic Environment (currency rate fluctuations, inflation, and diverse tax policies) 3) The Cultural Environment (the beliefs and attitudes of a specific country that shape their behavior and what they view as important. - The National Culture). (National culture has a greater affect on employees than organizational culture.)

In what three ways does the environment constrian and challenge managers?

1) Through its impact on jobs and employment. 2) Through the environmental uncertainty that is present. 3) Through the various stakeholder relationships that exist between an organization and its external constituencies.

What is the Organization for Economic Cooperation and Development?

A Paris-based international economic organization of 34 countries that helps its member countries achieve sustainable economic growth and employment.

What is a multinational corporation (MNC)?

A broad term that refers to any and all types of international companies that maintain operations in multiple countries.

What is the World Bank Group?

A group of 5 institutions that provides vital financial and technical assistance to developing countries around the world. It's goal is to promote long-term economic development, and support and promote global business. (Closely linked with IMF)

What is a strategic alliance?

A partnership between an organization and a foreign company partner(s) in which both share resources and knowledge in developing new products or building production facilities. One type of Strategic Alliance is a *Joint Venture* which is when the partners agree to form a separate, independent organization for some business purpose.

What are the three main dimentions of cultural intelligence?

Cultural awareness and sensitivity skills which include: Knowledge of culture as a concept; mindfulness; and behavioral skills.

What are the different components of the external environment?

Economic, Global, Political/legal, Sociocultural, Technological, and Demographics.

What are the three componants of a global mindset?

Intellectual capital: Knowledge of international business. Psychological capital: Openness to new ideas. Social capital: Ability to form connections and relationship with different people.

What does a consumer-responsive culture look like?

It has five characteristics: 1) Outgoing and friendly employees, 2) Jobs with few rigid rules, procedures, and regulations 3) Empowerment 4) Clear roles and expectations, and 5) Employees who are conscientious in their desire to please the customer.

What does an innovative culture look like?

It is characterized by challenge and involvement, freedom, trust and openness, idea time, playfulness/humor, conflict resolution, debates, and risk-taking.(Goran Ekvall)

What is the difference between licensing and franchising?

Licensing is primarily used by manufacturing organizations that make or sell another companys' products and franchising is primarily used by service organizations that want to use another company's name and operating methods. (Both entail an organization giving another the right to use/make/sell its products and name.)

What are the different levels of investment an organization can make when they become international?

Minimal Global Investment -Global sourcing (purchasing materials and labor from wherever it is cheapest), Moderate Investment: exporting products, importing products, licensing, and franchising, Significant Investment: Strategic alliance, or foreign subsidiary, which is directly investing in a foreign country by setting up separate and independent production facility or office. (Foreign subsidiaries provide the greatest risk in going international.)

What is a multi-domestic corporation?

One type of MNC which decentralizes management and other decisions to the local country. (Reflects the polycentric attitude)

What are the four key global trade mechanisms?

The World Trade Organization -WTO, 2) The International Monetary Fund -IMF, 3) The World Bank Group 4) The Organization for Economic Cooperation and Development -OECD.

How does a strong organizational culture affect the organizing aspect of management?

The amount of independence employees are given, how much managers interact with one another, and whether teams or individuals will develop plans.

What is Environmental Uncertainty?

The degree of unpredictable change and complexity in an organization's environment. Is the environment dynamic or stable? Simple or complex?

What two views explain how much impact a manager actually has on the success or failure of an organization?

The omnipotent view and the symbolic view.

What two constraints limit a managers impact?

The organizational culture (internal) and the environment (external).

What is an ethnocentric global attitude?

The parochialistic belief that the best work approaches and practices are those of the home country (the country in which the company's head quarters are located).

What is organizational culture?

The shared values, beliefs, principles, traditions, and ways of doing things that influence and guide the way organizational members act and that distinguish the organization from other organizations. Organizational culture is a shared, descriptive, perception. When employees embrace the culture, they work to further the company's values and therefore it is particularly relevant to managers. The original source of culture reflects the vision of the organizational founders.

What is the omnipotent view of management?

The view that managers are directly responsible for an organization's success or failure. (This is the dominant view.)

What is the symbolic view of management?

The view that much of an organization's success or failure is due to the external environment. -external factors and forces outside the organization and the manager's control that affect its performance.

What is a polycentric global attitude?

The view that the managers and employees in the host country, (the foreign country in which the organization is doing business), know the best work approaches and practices for running their business.

What are the four most common ways employees learn company culture?

Through stories, rituals, material symbols, and language.

What is parochialism?

Viewing the world solely through your own perspectives, leading to an inability to recognize difference between people. Monolingualism, only speaking one language, is a result of this.

How does a strong organizational culture affect the leading aspect of management?

What leadership styles are appropriate, whether all disagreements, even constructive ones, should be eliminated, and the degree to which managers are concerned with increasing employees job satisfaction.

How does a strong organizational culture affect the planning aspect of management?

Whether teams or individuals will develop plans, how much risk will be present in plans made, and the degree of environmental scanning in which management will engage.