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