Management exam 1

an organization gives another organization the right to use its name and operating methods

franchising

U.S. managers are accustomed to a stable legal and political system. Changes tend to be slow, and legal and political procedures are well established. Elections are held at regular intervals, and even when the political party in power changes after an election, it's unlikely that anything too radical will happen. The stability of laws allows for accurate predictions. However, this certainly isn't true for all countries.

free market economy

world-oriented view; wants to use best practices from around the globe

geocentric view

encompasses those issues associated with globalization and a world economy

global component

attributes that allow a leader to be effective in cross-cultural environments

global mindset

purchasing materials or labor from around the world wherever it is cheapest

global sourcing

The ability to work well with other people

human skills

acquiring products made abroad and selling them domestically

importing

Monitor, disseminator, spokesperson

informational

exploring new territory, taking risks, and doing things differently

innovation

Figurehead, leader, liaison

interpersonal

A specific type of strategic alliance in which the partners agree to form a separate, independent organization for some business purpose

joint venture

an organization gives another organization the right to make or sell its products using its technology or product specifications

licensing

: manage the work of first-line managers

middle managers

the values and attitudes shared by individuals from a specific country that shape their behavior and beliefs about what is important.

national culture

managers are directly responsible for an organization's success or failure

omnipotent view

a deliberate arrangement of people to accomplish some specific purpose

organization

viewing the world solely through your own perspectives, leading to an inability to recognize differences between people

paracholialism

looks at federal, state, and local laws as well as global laws and laws of other countries. It also includes a country's political conditions and stability

political/legal component

view that managers in the host country know the best approaches

polycentric

a preconceived belief, opinion, or judgment toward a person or a group of people

predudice

the biological heritage (including skin color and associated traits) that people use to identify themselves

race

Applying social criteria (screens) to investment decisions

social screening

is concerned with societal and cultural factors such as values, attitudes, trends, traditions, lifestyles, beliefs, tastes, and patterns of behavior.

sociocultural component

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socioeconomic view, which says that managers' social responsibilities go beyond making profits to include protecting and improving society's welfare. This view is based on the belief that corporations are not independent entities responsible only to stockholders, but have an obligation to the larger society. Organizations around the world have embraced this view as shown by a survey of global executives in which 84 percent said that companies must balance obligations to shareholders with obligations to the public good. Social responsiveness is when a company engages in social actions in response to some popular social need. Managers are guided by social norms and values and make practical, market-oriented decisions about their actions. For instance, Ford Motor Company became the first automaker to endorse a federal ban on sending text messages while driving. A socially responsible organization goes beyond what it's obligated to do or chooses to do because of some popular social need and does what it can to help improve society because it's the right thing to do. We define social responsibility as a business's intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society. A socially responsible organization does what is right because it feels it has an ethical responsibility to do so.

judging a person based on a perception of a group to which that person belongs

steroetyping

partnership between an organization and foreign company partner(s) in which both share resources and knowledgein developing new products or building production facilities

strategic alliance

organizational cultures in which the key values are intensely held and widely shared

strong culture

Easily perceived differences that may trigger certain stereotypes, but that do not necessarily reflect the ways people think or feel

surface level diversity

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

sustainability

much of an organization's success or failure is due to external forces outside managers' control

symbolic view

Knowledge and proficiency in a specific field

technical skills

is concerned with scientific or industrial innovations.

technological component

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Management involves coordinating and overseeing the work activities of others so that their activities are completed efficiently and effectively.

a tendency or preference toward a particular perspective or ideology

bias

: principles, values, and beliefs that define right and wrong behavior

ethics

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. According to Didier Bonnet, coauthor of Leading Challenge, "The job of a manager is to help people cross the bridge—to get them comfortable with the technology, to get them using it, and to help them understand how it makes their lives better."

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. Today, the majority of employees in developed countries work in service jobs. Almost 77 percent of the U.S. labor force is employed in service industries.

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A multinational corporation (MNC) is any type of international company that maintains operations in multiple countries. One type of MNC is a multidomestic corporation, which decentralizes management and other decisions to the local country. This type of globalization reflects the polycentric attitude. A multi-domestic corporation doesn't attempt to replicate its domestic successes by managing foreign operations from its home country. Instead, local employees typically are hired to manage the business, and marketing strategies are tailored to that country's unique characteristics. Another type of MNC is a global company, which centralizes its management and other decisions in the home country. This approach to globalization reflects the ethnocentric attitude. Global companies treat the world market as an integrated whole and focus on the need for global efficiency and cost savings. Although these companies may have considerable global holdings, management decisions with company-wide implications are made from the headquarters in the home country. Other companies use an arrangement that eliminates artificial geographical barriers. This type of MNC is often called a transnational, or borderless, organization and reflects a geocentric attitude. For example, IBM dropped its organizational structure based on country and reorganized into industry groups. Ford Motor Company is pursuing what it calls the One Ford concept as it integrates its operations around the world.

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ASEAN trading alliance of 10 Southeast Asian nations (see Exhibit 4-2). The ASEAN region has a population of more than 625 million with a combined GDP of US $2.4 trillion.37 In addition to these 10 nations, leaders from a group dubbed ASEAN+3, which include China, Japan, and South Korea, have met to discuss trade issues. Also, leaders from India, Australia, and New Zealand have participated in trade talks with ASEAN+3 as well. The main issue with creating a trade agreement of all 16 nations has been the lack of any push toward regional integration. Despite the Asian culture's emphasis on consensus building, "ASEAN's biggest problem is that individual members haven't been willing to sacrifice for the common good."

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As economic growth has languished and sputtered, and as people's belief that anyone could prosper declined, social discontent over growing income gaps has increased. Business leaders must realize that societal attitudes in the economic context have the potential to create constraints. The bottom line is that business leaders need to recognize how societal attitudes in the economic context also may create constraints as they make decisions and manage their businesses.

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At Tesla Motors, the focus is product innovation (innovation and risk taking). In contrast, Southwest Airlines has made its employees a central part of its culture.

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BENEFITS OF GOOD STAKEHOLDER RELATIONSHIPS Improved predictability of environmental changes Increased successful innovations Increased trust among stakeholders Greater organizational flexibility to reduce the impact of change

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CHALLENGES OF BEING A MANAGER Can be a thankless job May entail clerical type duties Managers also spend significant amounts of time in meetings and dealing with interruptions Managers often have to deal with a variety of personalities and have to make do with limited resources

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CREATING AN INNOVATIVE CULTURE In a survey of senior executives, over half said that the most important driver of innovation for companies was a supportive corporate culture. But not every company has established an adequate culture to foster innovation. In a survey of employees, about half expressed that a culture of management support is very important to the generation of innovative ideas, but only 20 percent believe that management actually provides such support. What does an innovative culture look like? According to Swedish researcher Goran Ekvall, it would be characterized by the bullet points listed on the slide.

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ENVIRONMENTAL UNCERTAINTY The first dimension of uncertainty is the degree of change. If the components in an organization's environment change frequently, it's a dynamic environment. If change is minimal, it's a stable one. A stable environment might be one with no new competitors, few technological breakthroughs by current competitors, little activity by pressure groups to influence the organization, and so forth. When we talk about degree of change, we mean change that's unpredictable. If change can be accurately anticipated, it's not an uncertainty for managers. The other dimension of uncertainty describes the degree of environmental complexity, which looks at the number of components in an organization's environment and the extent of the knowledge that the organization has about those components. An organization with fewer competitors, customers, suppliers, government agencies, and so forth faces a less complex and uncertain environment. Complexity is also measured in terms of the knowledge an organization needs about its environment.

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EU is an economic and political partnership of 28 democratic European countries. Eight countries (Croatia, the former Yugoslav Republic of Macedonia, Turkey, Albania, Bosnia-Herzegovina, Iceland, Montenegro, and Serbia) are candidates to join the EU. When the 12 original members formed the EU in 1992, the primary motivation was to reassert the region's economic position against the United States and Japan. Before then, each European nation had border controls, taxes, and subsidies; nationalistic policies; and protected industries. Now with these barriers removed, the economic power represented by the EU is considerable. Its current membership covers a population base of more than half a billion people (7 percent of the world population) and accounts for approximately 16 percent of the world's global exports and imports. Another step toward full unification occurred when the common European currency, the euro, was adopted. The euro is currently in use in 18 of the 28 member states, and all new member countries must adopt the euro. Only Denmark, the United Kingdom, and Sweden have been allowed to opt out of using the euro.

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Employee resource groups are made up of employees connected by some common dimension of diversity. Such groups typically are formed by the employees themselves, not the organizations. However, it's important for organizations to recognize and support these groups. Why are they so prevalent? The main reason is that diverse groups have the opportunity to see that their existence is acknowledged and that they have the support of people within and outside the group. Individuals in a minority often feel invisible and not important in the overall organizational scheme of things. Employee resource groups provide an opportunity for those individuals to have a voice.

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MANAGEMENT FUNCTIONS: Planning: Defining goals, establishing strategies to achieve goals, and developing plans to integrate and coordinate activities Organizing: Arranging and structuring work to accomplish organizational goals Lending: Working with and through people to accomplish goals Controlling: Monitoring, comparing, and correcting work

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GLOBE Global Leadership and Organizational Behavior Effectiveness (GLOBE) program is an ongoing research program that extended Hofstede's work by investigating cross-cultural leadership behaviors and giving managers additional information to help them identify and manage cultural differences. Using data from more than 18,000 managers in 62 countries, the GLOBE research team (led by Robert House) identified 9 dimensions on which national cultures differ. Two dimensions (power distance and uncertainty avoidance) fit directly with Hofstede's. Four are similar to Hofstede's (assertiveness, which is similar to achievement-nurturing; humane orientation, which is similar to the nurturing dimension; future orientation, which is similar to long-term and short-term orientation; and institutional collectivism, which is similar to individualism-collectivism). The remaining three (gender differentiation, in-group collectivism, and performance orientation) offer additional insights into a country's culture. The GLOBE studies confirm that Hofstede's dimensions are still valid and extend his research rather than replace it. GLOBE's added dimensions provide an expanded and updated measure of countries' cultural differences. It's likely that cross-cultural studies of human behavior and organizational practices will increasingly use the GLOBE dimensions to assess differences between countries.

is an important demographic at Facebook, where most employees are under 40; The company values the passion and pioneering spirit of its young employees who embrace the challenges of building groundbreaking technology and of working in a fast-paced environment with considerable change and ambiguity.

Gen Y

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HOW CULTURE AFFECTS MANAGEMENT Such constraints are rarely explicit. They're not written down. It's unlikely they'll even be spoken. But they're there, and all managers quickly learn what to do and not do in their organization. The link between values such as these and managerial behavior is fairly straightforward. Take, for example, a so-called "ready-aim- re" culture. In such an organization, managers will study and analyze proposed projects endlessly before committing to them. However, in a "ready- re-aim" culture, managers take action and then analyze what has been done.

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MANAGERIAL CONSTRAINTS In reality, managers are neither all-powerful nor helpless. But their decisions and actions are constrained. External constraints come from the organization's environment and internal constraints come from the organization's culture

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IMF organization of 188 countries that promotes international monetary cooperation and provides member countries with policy advice, temporary loans, and technical assistance to establish and maintain financial stability and to strengthen economies. During the global financial turmoil of the last few years, the IMF was on the forefront of advising countries and governments in getting through the difficulties

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In the 1980s, the term glass ceiling, first used in a Wall Street Journal article, refers to the invisible barrier that separates women and minorities from top management positions. The idea of a "ceiling" means something is blocking upward movement and the idea of "glass" is that whatever's blocking the way isn't immediately apparent. Research on the glass ceiling has looked at identifying the organizational practices and interpersonal biases that have blocked women's advancement. Findings from those studies have ranged from lack of mentoring to sex stereotyping, views that associate masculine traits with leader effectiveness, and bosses' perceptions of family-work conflict.

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Increasingly, many companies encourage employees to use social media to become employee activists. For this purpose, employee activists draw visibility to their workplace, defend their employers from criticism, and serve as advocates, both online and off. Internally, social media also becomes problematic when it becomes a way for boastful employees to brag about their accomplishments, for managers to publish one-way messages to employees, or for employees to argue or gripe about something or someone they don't like at work—then it has lost its usefulness. To avoid this, managers need to remember that social media is a tool that needs to be managed to be beneficial.

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It is a myth that social skills have become less important because there is more technology in the workplace. Particularly in team settings, workers rely on each other's expertise, and they are able to adapt to changing circumstances than is made possible by software. As a result, managers are continually challenged to oversee team building and problem solving.

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JOBS AND EMPLOYMENT the impact of external factors on jobs and employment is one of the most powerful constraints managers face Not only do changes in external conditions affect the types of jobs that are available, they affect how those jobs are created and managed. For instance, work tasks may be done by freelancers hired to work on an as-needed basis, or by temporary workers who work full-time but are not permanent employees, or by individuals who share jobs.

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Just as each individual has a unique personality, an organization, too, has a personality.

how organizations go green

Legal (light green) approach Market approach Stakeholder approach Activist approach

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More than 7,500 companies around the globe now voluntarily report their efforts in promoting environmental sustainability using the guidelines developed by the Global Reporting Initiative (GRI). These reports, which can be found on the GRI website (www.globalreporting.org), describe the numerous green actions of these organizations. Another way organizations show their commitment to being green is through pursuing standards developed by the nongovernmental International Organization for Standardization (ISO). Organizations that want to become ISO 14000 compliant must develop a total management system for meeting environmental challenges. One final way to evaluate a company's green actions is to use the Global 100 list of the most sustainable corporations in the world (www.corporateknights.com). To be named to this list a company has displayed a superior ability to effectively manage environmental and social factors.

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NAFTA the Mexican, Canadian, and U.S. governments in 1992, a vast economic agreement was created. It's the second largest trade alliance in the world in terms of combined gross domestic product (GDP) of its members. Between 1994, when NAFTA went into effect, and 2014, imports from Canada and Mexico to the United States increased 212 percent and 637 percent, respectively. The rise in export activity from the United States to Canada and Mexico was 211 percent and 478 percent, respectively. Put into numbers, that translates to some $1.1 trillion ex- changed among NAFTA partners in 2014 alone. Other Latin American nations have also become part of free trade agreements. Colombia, Mexico, and Venezuela led the way when all three signed an economic pact in 1994 eliminating import duties and tariffs. Another agreement, the U.S.-Central America Free Trade Agreement (CAFTA-DR), promotes trade liberalization between the United States and five Central American countries: Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua as well as the Dominican Republic. Another free trade agreement of 10 South American countries known as the Southern Common Market or Mercosur already exists. Some South Americans see Mercosur as an effective way to combine resources to better compete against other global economic powers, especially the EU and NAFTA. With the future of FTAA highly doubtful, this regional alliance could take on new importance.

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OECD is a Paris-based international economic organization whose mission is to help its 34 member countries achieve sustainable economic growth and employment and raise the standard of living in member countries while maintaining financial stability in order to contribute to the development of the world economy. With a long history of facilitating economic growth around the globe, the OECD now shares its expertise and accumulated experiences with more than 80 developing and emerging market economies.

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ORGANIZATIONAL CULTURE In most organizations, these shared values and practices have evolved over time and determine, to a large extent, how "things are done around here." Our definition of culture implies three things. First, culture is a perception. It's not something that can be physically touched or seen, but employees perceive it on the basis of what they experience within the organization. Second, organizational culture is descriptive. It's concerned with how members perceive the culture and describe it, not with whether they like it. Finally, even though individuals may have different backgrounds or work at different organizational levels, they tend to describe the organization's culture in similar terms. That's the shared aspect of culture.

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People with disabilities are the largest minority in the United States. Estimates vary, but it's believed that there are some 19.8 million working-age Americans with disabilities. And that number continues to increase as military troops return from Iraq and Afghanistan. 1990 was a watershed year for persons with disabilities. That was the year the Americans with Disabilities Act (ADA) became law. ADA prohibits discrimination against an individual who is "regarded as" having a disability and requires employers to make reasonable accommodations so their workplaces are accessible to people with physical or mental disabilities and enable them to effectively perform their jobs. Title VII of the Civil Rights Act prohibits discrimination on the basis of religion (as well as race/ethnicity, country of origin, and sex). Today, it seems that the greatest religious diversity issue in the United States revolves around Islam, especially after 9/11. Islam is one of the world's most popular religions, and some 2 million Muslims live in the United States. For the most part, U.S. Muslims have attitudes similar to those of other U.S. citizens. However, there are real and perceived differences.

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REWARDS OF BEING A MANAGER Responsible for creating a productive work environment Recognition and status in your organization and in the community Attractive compensation in the form of salaries, bonuses, and stock options

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STAKEHOLDERS Stakeholders are any constituencies in the organization's environment affected by an organization's decisions and actions. These groups have a stake in or are significantly influenced by what the organization does. In turn, these groups can influence the organization. Management researchers who have looked at this issue are finding that managers of high-performing companies tend to consider the interests of all major stakeholder groups as they make decisions.

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STRONG CULTURES Strong cultures have a greater influence on employees than weaker cultures. The more employees accept the organization's key values and the greater their commitment to those values, the stronger the culture. Most organizations have moderate to strong cultures; that is, there is relatively high agreement on what's important, what defines "good" employee behavior, what it takes to get ahead, and so forth. The stronger a culture becomes, the more it affects the way managers plan, organize, lead, and control.

how employees learn culture

Stories Rituals Material Artifacts and Symbols Language

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Successful managers often embrace work-life practices and provide encouragement to employees who wish to use them.

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Until the late 1960s, few people (and organizations) paid attention to the environmental consequences of their decisions and actions. However, a number of environmental disasters brought a new spirit of environmentalism to individuals, groups, and organizations. Increasingly, managers have begun to consider the impact of their organization on the natural environment, which we call green management.

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The acronym LGBT—which refers to lesbian, gay, bisexual, and transgender people—relates to the diversity of sexual orientation and gender identity. There are an estimated 5.4 million LGBT employees in the U.S. private sector. Sexual orientation has been called the "last acceptable bias." We want to emphasize that we're not condoning this perspective, but what this comment refers to is that most people understand that racial and ethnic stereotypes are "off-limits," but it's not unusual to hear derogatory comments about gays or lesbians. And in 28 states, workers can be red for being gay or transgendered. Employers in the United States have taken differing approaches to their treatment of sexual orientation, with many adopting a variation of the "don't ask, don't tell" policy. Some just at out do not hire any LGBT employees. But, according to a report from the Human Rights Campaign Foundation, 91 percent of the largest corporations in the United States now prohibit employment discrimination based on sexual orientation, and 61 percent prohibit bias based on gender identity. Diversity refers to any dissimilarities or differences that might be present in a workplace. Other types of workplace diversity that managers might confront and have to deal with include socioeconomic background (social class and income-related factors), team members from different functional areas or organizational units, physical attractiveness, obesity/thinness, job seniority, or intellectual abilities.

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The aging population is a major critical shift taking place in the workforce. With many of the nearly 85 million baby boomers still employed and active in the workforce, managers must ensure that those employees are not discriminated against because of age. Both Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967 prohibit age discrimination. One issue with older workers is the perception that people have of those workers. Perceptions such as they're sick more often and they can't work as hard or as fast as younger employees—perceptions that are inaccurate. Employers have mixed feelings about older workers. On the positive side, they believe that older workers bring a number of good qualities to the job, including experience, judgment, a strong work ethic, and a commitment to doing quality work. But there remain many employers who also view older workers as not being flexible or adaptable and being more resistant to new technology. The challenge for managers is overcoming those misperceptions of older workers and the widespread belief that work performance and work quality decline with age. Women (49.5%) and men (50.5%) now each make up almost half of the workforce. Yet, gender diversity issues are still quite prevalent in organizations. The latest information shows that women's median earnings were 83 percent of male full-time wage and salary workers. And research by Catalyst found that men start their careers at higher levels than women. And after starting out behind, women don't ever catch up. Men move up the career ladder further and faster as well. Few, if any, important differences between men and women affect job performance. But to accommodate their family responsibilities, working mothers are more likely to prefer part-time work, flexible work schedules, and telecommuting. They also prefer jobs that encourage work-life balance.

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The concept of social responsibility has been described in different ways. For instance, it's been called "profit making only," "going beyond profit making," "any discretionary corporate activity intended to further social welfare," and "improving social or environmental conditions." We can understand it better if we first compare it to two similar concepts: social obligation and social responsiveness. Social obligation is when a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities. The organization does what it's obligated to do and nothing more. This idea reflects the classical view of social responsibility, which says that management's only social responsibility is to maximize profits. The most outspoken advocate of this approach is economist and Nobel laureate Milton Friedman. He argued that managers' primary responsibility is to operate the business in the best interests of the stockholders, whose primary concerns are financial.

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The lingering global economic challenges—once described as the "Great Recession" by some analysts—began with the turmoil in the U.S. housing market. As credit markets collapsed, businesses were impacted. Credit was no longer readily available to fund businesses. Economic difficulties spread across the globe. The fragile economic recovery continues to be a business constraint.

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The maker of products from Crunch chocolate bars to Nescafé coffee to Purina pet food has seen the price of chocolate, for instance, increase by nearly 30 percent in five years. Overall, Nestlé spends more than $30 billion a year on raw materials. Rising costs are also affecting the cost of sushi. Higher global demand for fish and the Japanese and U.S. currency exchange rates are influencing prices. Commodity (raw materials) costs are just one of the many volatile economic factors facing organizations.

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The size and characteristics of a country's population can have a significant effect on what it's able to achieve in politics, economics, and culture. Baby Boomers Born between 1946 and 1964, one of the largest and most influential demographic groups in history. Gen Y or (Millennials)—Children of Baby Boomers, born between 1978 and 1994, making an impact on technology and the workplace. Post-Millennials-The youngest group identified age group-basically teens and middle-schoolers. They have also been called the iGeneration because advances in technology have customized everything to the individual. Population experts say it's too early to tell whether elementary school-aged children and younger are part of this demographic group or whether the world they live in will be so different that they'll comprise a different demographic cohort. Although this youngest group has not officially been "named," some are referring to them as "Gen Z" or the "touch-screen generation."

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The total population is projected to increase to 438 million by the year 2050, up from 322 million in 2015; 82 percent of that increase will be due to immigrants and their U.S.-born descendants. Nearly one in five Americans will be an immigrant in 2050, compared with one in eight in 2015 will be aged 65 or over. In addition to total population changes, the components of that population are projected to change as well. Exhibit 5-3 provides the projected population breakdown. As a nation, our population is aging. According to the CIA World Factbook, the median age of the U.S. population stands at 37.8 years, up from 36.2 years in 2001.

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The total world population in 2016 is estimated at over 7.3 billion individuals. However, that number is forecasted to hit 9 billion by 2050, at which point the United Nations predicts the total population will either stabilize or peak after growing for centuries at an ever-accelerating rate. The main reason for this major shift is the decline in birthrates as nations advance economically. However, in developing countries in Africa, Asia, Latin America, the Caribbean, and Oceania, birthrates remain high. When we say the world's population is aging, some of the realities of this trend are hard to even fathom. For instance, people age 65 and older will soon outnumber children under age 5 for the first time in history. Also, the world's population age 80 and over is projected to increase 233 percent by 2040. The implications of these trends for societies and businesses are profound

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U.S. managers are accustomed to a stable legal and political system. Changes tend to be slow, and legal and political procedures are well established. Elections are held at regular intervals, and even when the political party in power changes after an election, it's unlikely that anything too radical will happen. The stability of laws allows for accurate predictions. However, this certainly isn't true for all countries. Managers must stay informed of the specific laws in countries where they do business. For instance, the president of Zimbabwe is pushing ahead with plans to force foreign companies to sell majority stakes to locals. Also, some countries have risky political climates. For instance, BP could have warned Exxon about the challenges of doing business in Russia. During its long involvement in the country, BP has "had so many police run-ins that its stock price often nudges up or down in response to raids or the arrests of employees." Keep in mind that a country's political/legal environment doesn't have to be risky or unstable to be a concern to managers. Just the fact that it differs from that of the home country is important. Managers must recognize these differences if they hope to understand the constraints and opportunities that exist.

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WHERE CULTURE COMES FROM Company founders are not constrained by previous customs or approaches and can establish the early culture by articulating a vision of what they want the organization to be. Also, the small size of most new organizations makes it easier to instill that vision with all organizational members. Once the culture is in place, however, certain organizational practices help maintain it. For instance, during the employee selection process, managers typically judge job candidates not only on the job requirements, but also on how well they might into the organization. At the same time, job candidates find out information about the organization and determine whether they are comfortable with what they see. Through what they say and how they behave, top managers establish norms that filter down through the organization and can have a positive effect on employees' behaviors. For instance, Gravity CEO, Dan Price, raised the minimum wage at his firm to $70,000 annually and has cut his million dollar salary to fund those pay increases. Since making this decision, Gravity's financial performance has soared. However, as we've seen in numerous corporate ethics scandals, the actions of top managers also can lead to undesirable outcomes.

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WORKPLACE DIVERSITY Diversity has been "one of the most popular business topics over the last two decades." It ranks with modern business disciplines such as quality, leadership, and ethics. Despite this popularity, it's also one of the most controversial and least understood topics. With its basis in civil rights legislation and social justice, the word diversity often invokes a variety of attitudes and emotional responses in people. So, what's our definition of workplace diversity? We're defining it as the ways in which people in an organization are different from and similar to one another. Notice that our definition not only focuses on the differences, but the similarities, of employees. This reinforces our belief that managers and organizations should view employees as having qualities in common as well as differences that separate them.

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WORLD BANK GROUP group of five closely associated institutions, all owned by its member countries, that provides vital financial and technical assistance to developing countries around the world. The goal of the World Bank Group is to promote long-term economic development and poverty reduction by providing members with technical and financial support.

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WTO global organization of 161 countries (as of April 2015) that deals with the rules of trade among nations.48 Formed in 1995, the WTO evolved from the General Agreement on Tariffs and Trade (GATT), a trade agreement in effect since the end of World War II. To- day, the WTO is the only global organization that deals with trade rules among nations. Its membership consists of 161 member countries and 24 observer governments (which have a specific time frame within which they must apply to become members). The goal of the WTO is to help countries conduct trade through a system of rules. Although critics have staged vocal protests against the WTO, claiming that global trade destroys jobs and the natural environment, it appears to play an important role in monitoring, promoting, and protecting global trade.

The ability to think and conceptualize about abstract and complex situations concerning the organization

conceptual skills

cultural awareness and sensitivity skills

cultural intelligence

can be managed as a multidomestic organization (local control) or as a global organization (centralized control). As you can probably guess, this arrangement involves the greatest commitment of resources and poses the greatest amount of risk.

foreign subsidiary

Entrepreneur, disturbance handler, resource allocator, negotiator

decisional

Differences in values, personality, and work preferences

deep level diversity

is concerned with trends in population characteristics such as age, race, gender, education level, geographic location, income, and family composition

demographic component

when someone acts out their prejudicial attitudes toward people who are the targets of their prejudice

discrimination

: doing the right things attaining organizational goals

effectiveness

doing things right getting the most output from the least amount of input

efficiency

: social traits (such as cultural background or allegiance) that are shared by a human population

ethnicity

view that home country has best work practices

ethnocentric

making products domestically and selling them abroad

exporting

manage the work of non-managerial employees

first line managers

responsible for making organization-wide decisions and establishing plans and goals that affect the entire organization

top managers

The reality that management is needed in all types and sizes of organizations, at all organizational levels, in all organizational areas, and in organizations no matter where located

universality of management

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why managers are important: Organizations need their managerial skills and abilities now more than ever Managers are critical to getting things done Managers do matter to organizations