CH 1 – Introducing management
Intellectual capital is the collective brainpower or shared knowledge of a workforce that can be used to create value.
(Competency x Commitment) A knowledge worker is someone whose mind is a critical asset to employers.
Workforce diversity describes the composition of a workforce in terms of differences among people according to
gender, age, race, ethnicity, religion, sexual orientation, and capabilities.
Prejudice is the display of negative, irrational attitudes toward members of diverse populations. Discrimination actively
denies minority members the full benefits of organizational membership (ex: glass ceiling effect).
Globalization – the worldwide interdependence of resource flows, product markets, and business competition
Technology- technology is an crucial part of everyday business and helped with globalization communication. It has also
added flexibility to workplaces through things like, telecommuting.
Ethics – set of moral standards of what is “good” and “right” in one’s behaviour.
Careers – skills should be portable and always of value. Portfolio workers are people who always have the skills needed
to readily shift jobs and even careers. Some critical skills include mastering, networking, entrepreneurship, tech-savvy,
marketing and passion for renewal
Organizations in the new workplace
What is an organization?
Organizations are collection of people working together to achieve a common purpose. All organizations share a
purpose of providing goods or services of value to customers and clients.
Organizations as systems: organizations are open systems (they transform resource inputs from the environment into
product outputs) that interact with their environments in the continual process of obtaining resource inputs and then
transforming them into outputs in the form of finished goods and services for their customers.
Organizational performance: When operations add value to the original cost of resource inputs, then 1) a business
organization can earn a profit or 2) a non-profit organization can add wealth to society. A way to tell is through
productivity which measures the quantity and quality of outputs relative to the cost of inputs. Performance
effectiveness is an output measure of task or goal accomplishment. Performance efficiency is an input measure of the
resource costs associated with goal accomplishments. Productivity = effective and efficient performance.
Changing nature of organizations:
Organizational trends and transitions:
Renewed belief in human capital: demands of the new economy place premiums on high-involvement and participatory
work settings that rally the knowledge, experience, and commitment of all members.
Demise of “command-and-control”: traditional hierarchical structures with “do as I say” bosses are proving too slow,
and costly to do well in today’s competitive environment.
Emphasis on teamwork: driven teamwork which pools talents for creative problem solving.
Pre-eminence of technology: new opportunities appear with each development in computer and information
technology; they continually change the way organizations operate and how people work.
Embrace of networking: organizations are networked for intense, real-time communication and coordination, internally
among parts and external with partners, contractors, suppliers and customers
New workforce expectations: a new generation of workers brings to the workplace less tolerance for hierarchy, more
informality, and more attention to performance merit than to status and seniority.
Concern for work-life balance: As society increases in complexity, workers are forcing organizations to pay more
attention to balance in the often-conflicting demands of work and personal affairs.
Focus on speed: everything moves fast, so those who get products to market first have an advantage, work is now
expected to be done both well and in a timely manner. Organizational Environment
Dynamic forces and the general environment: General environment of organizations consists of all external conditions
(economic, legal-political, technological, socio-cultural and natural environmental conditions) that set the context for
Economic conditions: some of these influence customer spending, resource supplies and investment capital that is
crucial for managers to recognize.
Legal-Political conditions: monitor changes to understand the trends that can affect the regulation and oversight of
businesses. Internet censorship is the deliberate blockage and denial of public access to information posted on the
Technological conditions: technology is only evolving, so you must be up-date with it.
Socio-cultural conditions: these conditions take meaning as norms, customers and social values on matters like ethics,
human rights, gender roles and lifestyles. All such changes have consequences for how organizations are managed.
Natural environment conditions: going “green” is one of the impacts/changes we have seen in the past few years. Public
concern to such matters changes the way organizations will run. Sustainable business is when firms operate in ways that
both meet the needs of customers and protect or advance the well-being of our natural environment. Sustainable
innovation creates new products and production methods that have reduced environmental impact.
Stakeholders and the specific environment: Specific environment (task environment) includes the people and groups
with whom an organization interacts and conducts business with. Members of the specific environment are often
described as stakeholders, who are the persons, groups and institutions directly affect by an organization. Value creation
is the creation of value for and satisfying needs of stakeholders.
Competitive Advantage: refers to something that an organization does extremely well, a core competency that clearly
sets it apart from competitors and gives it an advantage over them in the marketplace. Competitive advantage is linked
with strategic positioning which occurs when an organization does different things or the same things in different ways
from its major competitors. Competitive advantage can be achieved in the follow ways:
Achieved through costs- finding ways to operate with lower costs and earn profits
Through quality- create products/services that are demonstrably and consistently higher quality for customers
Through delivery- finding ways to outperform competitors by delivering products and services to customers factored
and consistently on time, and to continue to develop timely new products
Through flexibility – finding ways to adjust and tailor products and services to fit customer needs in ways that are
difficult for one’s competitors to match
Environmental Uncertainty: means that there is a lack of complete information regarding what exists and what
developments may occur about the environment. There are two dimensions of environmental uncertainty: 1) Degree of
complexity or the number of different factors in the environment – an environment is either classified as relatively
simple or complex. 2) Rate of change in and among these factors – environment classified as stable or dynamic. High
uncertainty environments require firms to have flexibility and adaptability.
Organizational effectiveness: is sustainable high performance in using resources to accomplish a mission and objectives.
Organizational effectiveness in different viewpoints:
Systems resource approach: looks at the input side and defines organizational effectiveness in terms of success in
acquiring needed resources from the organization’s environment
Internal process approach: looks at the transformation process and defines organizational effectiveness in terms of how
efficiently resources are utilized to product goods and services.
Goal approach: looks at the output side and defines organizational effectiveness in terms of how to measure
achievement of key operating objectives.
Strategic constituencies approach: looks at the external environment and defines organizational effect