Global Management GMS 200
An Overview of the New Workplace
- World of work is undergoing dynamic and challenging changes. Changes provide great
opportunities along with tremendous uncertainty.
- Such changes can be ascribed to the impact of important trends regarding: intellectual capital,
globalization, technology, workforce diversity, ethics and careers.
- Because of continuous change impacting the workplace, this raises a host of new career
- Smart people commit their energies and intellect to continuous learning and personal
- Companies with a future are committed to people.
- Companies with a future offer inspirational leadership; reward and respect people and provide
supportive work environments (corporate culture).
- High performing companies gain extraordinary results from people.
- Intellectual capital: the collective brainpower or shared knowledge of a workforce.
- Knowledge worker: someone whose mind is a critical asset to employers.
- Workforce diversity: describes differences among workers in gender, race, ethnicity, age,
religion, sexual orientation and able-bodiedness.
- Prejudice: the display of negative, irrational attitudes towards members of diverse populations.
- Discrimination: actively denies minority members the full benefits of organizational membership.
- Glass ceiling effect: an invisible barrier limiting career advancement of women and minorities.
- Globalization: is the worldwide interdependence of resource flows, product markets and business
- Technology: no matter what business, technology is an indispensable part of everyday life.
- Ethics: a set moral standard of what is good and bad in one’s behavior.
- Careers: Charles Handy’s shamrock organization:
* Leaf 1: core-workers (full time, with success and maintenance of critical skills they can advance
and remain employed for a long time).
* Leaf 2: contract workers (perform specific tasks that are required by an organization and sell
skills to employers over time).
* Leaf 3: part-time workers (hired only when needed and for as long as they are needed).
- Portfolio worker: has an up-to-date skill that allows for a job and career mobility; be able to
categorize into one of the shamrock leaves.
Organizations in the New Workplace
- Organization: a collection of people working together to achieve a common purpose.
• Organization as systems
- Open system: transforms resource inputs from the environment into product outputs.
• Organizational performance
- If operations add value to the original cost of resource inputs, then
(1) a business can earn a profit.
(2) A non-profit organization can add wealth to society.
- Productivity: the quantity and quality of work performance, with resource utilization considered.
Two common performances measures: effectiveness and efficiency.
- Performance effectiveness: an output measure of task or goal accomplishment.
- Performance efficiency: an input measure of resource cost associated with goal accomplishment.
• Changing nature of organizations
- Renewed belief in human capital: involvement that rally knowledge, experience and commitment
of its members.
- Demise of command-and-control: bosses proving too slow; not suitable for today’s competitions.
- Emphasis on teamwork: increasingly driven teamwork; each member’s talents.
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- Pre-eminence of technology: new developments of technology change how organizations work.
- Embrace of networking: networking for intense, real-time communication and coordination.
- New workforce expectation: new generation of workers change the traditional expectations.
- Concern for work-life balance: attention to often-conflicting demands of work and personal
- Focus on speed: everything moves fast in today’s society.
• Organizational Environment
- General environment: consists of all external conditions that set the context for managerial-
decision making (forces: economic, legal-political, technological, socio-cultural and natural
- Internet censorship: the deliberate blockage and denial of public access to info posted on the
- Sustainable business: both meets the needs of consumers and protects the well-being of our
- Sustainable innovation: creates new products and production methods that have reduced
• Stakeholders and the specific environment
- Specific environment (task environment): includes the people and groups with whom an
- Stakeholders: the persons, groups or institutions directly affected by an organization.
- Important stakeholders: customers, suppliers, competitors, regulators, owners and employees.
- Value creation: the creation of value for and satisfying needs of stakeholders.
• Competitive advantage: allows an organization to deal with market and environmental forces
better than its competitors.
- Strategic positioning: occurs when an organization does different things or the same things in
different ways from its major competitors.
- Competitive advantage can be achieved through: cost, quality, delivery, flexibility.
• Environmental uncertainty: a lack of complete information about the environment.
- Two dimensions of environmental uncertainty:
(1) degree of complexity: ( number of different factors in the environment) either simple or
(2) rate of change: stable or dynamic
• Organizational effectiveness: sustainable high performance in using resources to accomplish a
- Systems resource approach: looks at input side
- Internal process approach: looks at transformation process
- Goal approach: looks at output side
- Strategic constituencies approach: looks at external environment
Managers in the New Workplace
- Manager: A person, who supports, activates and is responsible for the work of others.
- Peter Drucker describes managers’ jobs “to make work productive and workers effective.”
- Henry Mintzberg says “no job is more vital to our society than that of a manager.”
• Levels of managers:
- Top managers: (CEO, president, vice president) guide the performance of the organization as
whole or one of its major parts. They should be future-oriented, strategic thinkers capable of
making effective decisions.
- Middle managers: (division manager, regional manager, plant manager) oversee the work of large
departments or divisions.
- Team leader/first line manager: (department head, supervisor, team leader) report to middle
managers and supervise non-managerial workers.
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- Non-managerial workers.
• Types of managers
- Line managers: directly contribute to producing the organization’s goods or services.
- Staff managers: use special technical expertise to advice and support line workers.
- Functional managers: are responsible for one area such as finance, marketing, production,
personnel, accounting or sales.
- General Managers: are responsible for complex, multifunctional units.
- Administrators: a manager in a public or non-profit organization.
• Managerial performance
- Accountability: the requirement to show performance results to a supervisor.
- Effective managers: helps others achieve high performance and satisfaction at work.
- Quality of work life (QWL): overall quality of human experience in workplace.
• Changing nature of managerial work
- Upside-down pyramid: operating works are at the top, serving customers, while managers are at
the bottom supporting them.
- Top managers’ managers operating workers customers and clients.
The Management Process
• Functions of management
- Management: process of planning, organizing, leading and controlling the use of resources to
accomplish performance goals.
- Planning: process of setting objectives and determining what should be done to accomplish them.
- Organizing: process of assigning tasks, allocating resources and coordinating work activities.
- Leading: process of arousing enthusiasm and inspiring efforts to achieve goals.
- Controlling: process of measuring performance and taking action to ensure desired results.
• Managerial roles and activities
- Managerial roles: Henry Mintzberg’s 10 managerial roles:
(1) interpersonal roles: how a manager interacts with other people
- figurehead, leader, liaison
(2) informational roles: how manager exchanges and processes information
- monitor, disseminator, spokesperson
(3) decisional roles: how manager uses information in decision-making
- entrepreneur, disturbance handler, resource allocator, negotiator
- Managerial activities
*long hours, intense pace
*fragmented and varied tasks, many communication media
*accomplish work through interpersonal relationships
• Managerial agendas and networks
- Two activities that John Kotter considers critical to manager’s success: agenda setting and
- Agenda setting: develops action priorities for accomplishing goals and plans.
- Networking: process of maintaining positive relationship with people who can help advance
- Social capital: a capacity to get things done with the help of others.
• Essential managerial skills
- Learning: change in behavior those results from experience.
- Lifelong learning: process of continuous learning from all our daily experiences and
- Skill: ability to translate knowledge into action that results in desired performance.
- Robert L. Katz skills of managers in 3 categories:
(1) conceptual: ability to think analytically and achieve integrative problem solving.
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(2) Human: ability to work well with others; emotional intelligence.
(3) Technical: ability to apply expertise and perform a special task with proficiency.
• Developing managerial competencies
- Managerial competency: a skill based capability for high performance in a management job.
*communication, teamwork, self-management, critical thinking, leadership, professionalism.
Classical Management Approaches
• Scientific management (Fredrick Taylor): emphasis careful selection and training or workers and
- Motion study: science of reducing a task to its basic physical motion.
- Frank and Lillian Gilbreths’ work led to later advances in areas of job simplification, work
standards and incentive wage plans.
• Administrative principles (Henri Fayol): he identified 14 principles managers should follow:
*division of labor *authority
*discipline *unity of command
*unity of direction *subordination of individual interests
*remuneration (fair pay) *centralization
*scalar chain (line of authority) *order
*equity *personnel tenure
*initiative *spirit de corps (build harmony and cohesion)
- Fayol identified 5 rules of management:
(1) Foresight: to complete a plan of action for the future.
(2) Organization: to provide and organize resources to apply the plan.
(3) Command: to lead, select and evaluate workers to get the best work toward the plan.
(4) Coordination: working together.
(5) Control: make things happen according to plan.
• Bureaucratic organization (Max Weber)
- Bureaucracy: a rational and efficient form of organization founded on logic, order and legitimate
- Weber’s identified characteristics of bureaucratic organization:
*clear division of labor
*clear hierarchy of authority
*formal rules and procedures
*careers based on merit
Behavioral Management Approaches: maintain that people are social and self-actualizing.
• Mary Parker Follet’s organizations as communities:
- Groups were mechanisms which diverse individuals could combine their talents for a greater
- Making every employee an owner in a business would create feelings of collective responsibility
(today: “employee ownership,” “profit sharing,” “gains sharing plans”).
- Business problems involve a wide variety of factors that must be considered in a relationship to
one another (today: “systems,” “contingency thinking”).
- Businesses were service organization and private profits should always be considered vis-à-vis
the public good (today: “managerial ethics,” “corporate social responsibility”).
• The Hawthorne Studies:
- Understanding human interactions in workplace.
- Special importance given to group atmosphere and participative supervision.
- Groups can have strong negative, as well as positive, influences on individual productivity.
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- Hawthorne effect: tendency of persons singled out for special attention to perform as expected.
- Human relations movement: suggested that managers using good human relations will achieve
- Organizational behavior: study of individuals and groups in an organization.
• Maslow’s theory of human needs
- Need: physiological or psychological deficiency that a person wants to satisfy.
- 2 underlying principles:
(1) deficit principle: people act to satisfy deprived needs, those for which a satisfaction deficit
(2) Progression principle: five needs exist in a hierarchy of prepotency.
- 5 levels of need:
(1) self actualization: self fulfillment
(2) esteem: respect, recognition, prestige, self-esteem
(3) social: love, affection, belongingness
(4) safety: security, protection, stability
(5) physiological: basic needs for biological maintenance
• McGregor’s theory X and theory Y
- Managers should give more attention to the social and self actualizing needs of people at work.
- Theory x: assumes people dislike work, lack ambition, act irresponsibly and prefer to be led.
- Theory y: assumes people are willing to work, like responsibility, self-directed and creative.
- Self-fulfilling prophecy: occurs when a person acts in ways that confirm another’s expectations.
• Argyris’s theory of adult personality
- Some practices, especially those influenced by the classical management approaches, are
inconsistent with the mature adult personality.
- If managers treat people positively and as responsible adults, they will achieve higher
Modern Management Foundations
• Quantitative analysis and tools
- Management science and operations research use quantitative analysis and applied math to solve
- Operation management: study of how organizations produce goods and services.
• Organizations as systems
- Systems: a collection of interrelated parts working together for a purpose.
- Subsystem: smaller part of a larger system.
• Contingency thinking: tries to match management practices with situational demands.
• Quality management (Edward Deming)
- Total quality management (TQM): managing with an organization-wide commitment to
continuous improvement, quality or product and customer needs.
- Continuous improvement: always searching for ways to improve.
- ISO certification: indicates agreement with a thorough set of international quality standards.
• Knowledge management and organizational learning
- Knowledge management: process of using intellectual capital for competitive advantage.
- Learning organization (Peter Senge): continuously changes and improves, using the lessons of
- Characteristics of following Peter Senge learning organization:
(1) mental models: set aside old ways of thinking
(2) personal mastery: self aware and open to others
(3) systems thinking: learns how whole organization works
(4) shared vision: understands and agrees to action plan
(5) team learning: works together to accomplish a plan
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- Google principles of managing for knowledge development and organizational learning:
(1) hire by committee (5) seek consensus
(2) cater to every need (6) use data
(3) make coordination easy (7) don’t be evil
(4) encourage creativity
• Evidence based management (Peters and Waterman)
- High-performance organization: consistently achieves excellence while creating high quality
- Many organizations are oriented in: people, team, information, achievement, and learning.
- Evidence-based management: involves making decisions based on hard facts about what really
• 21 century leadership
- Global strategist
- Mastery of technology
- Inspiring leader
- Model of ethical behavior
Management and Globalization
- Global economy: resources, markets and competition are worldwide in scope.
• Global management: managing operations in more than one country.
- Global managers: culturally aware and informed o international affairs.
• Why companies go global
- Profits, customers, suppliers, capital (financial resources) and labor
• How companies go global
- Global business: conducts commercial transactions across national boundaries.
- Market entry strategies: global sourcing, exporting/importing, licensing/franchising
- Direct investment strategies: joint ventures, foreign subsidiaries
- Global sourcing: things are purchased around the world for local use.
- Exporting: local products sold abroad.
- Importing: selling products which came from abroad.
- Licensing: local firm pays a fee to foreign firm for right to produce or sell its products.
- Franchising: fee paid to foreign firm to locally operate using its name/products/brand.
- Foreign direct investment: building, buying ownership of a business in another country.
- Insourcing: job creation through foreign direct investment.
- Joint venture: operates in a foreign country through co-ownership by foreign and local partners.
- Global strategic alliance: partnership in which foreign and domestic firms share resources and
knowledge for mutual gains.
- Foreign subsidiary: local operation completely owned by foreign firm.
- Greenfield investment: builds an entirely new operation in foreign country.
• Global business environments
- Political risk: potential loss in value of foreign investment due to political changes in host
- Political-risk analysis: tries to forecast political disruptions that can threaten the value of a foreign
- World trade organization: member nations agree to negotiate and resolve disputes about tariffs
and trade restrictions.
- Most favored nation status: gives a trading partner most favorable treatment for imports and
- Tariffs: taxes governments charge on imports from abroad.
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- Protectionism: a call for tariffs and favorable treatment to protect domestic firms from foreign
- NAFTA: north American free trade agreement linking Canada, US and Mexico in an economic
- European Union: a political and economic alliance of European countries.
- Global corporations (MNC): multinational business with extensive operations in more than one
• Types of global businesses
- Transnational Corporation: an MNC that operates worldwide on a boundaries basis.
• Pros and cons of global corporations
- Host country issues
- Home country issues
• Ethics challenges for global managers
- Corruption: illegal practices to further one’s business interests.
- Child labor: full time employment of children for adult jobs.
- Sweatshops: employ work for low pay, long hours and poor working conditions.
- Sustainable development: meets the needs of present without hurting future generations.
Culture and Global Diversity
- Culture shock: how someone feels when in an unfamiliar culture.
- Ethnocentrism: tendency to consider one’s culture superior to others.
- Cultural intelligence: ability to accept and adapt to new cultures.
• Silent languages of culture
- Low context cultures: emphasize communication via spoken or written words.
- High context cultures: rely on non-verbal and situational cues.
- Monochronic cultures: people tend to do one thing at a time.
- Polychronic cultures: doing more than one thing at a time.
- Proxemics: how people use space to communicate.
• Values and national cultures
- Ecological fallacy: assumes a culture value applies equally to all the culture members.
- Power distance: degree to which a society accepts unequal distribution of power.
- Individualism-collectivism: degree to which a society emphasizes individuals and their self-
- Uncertainty avoidance: degree to which a society tolerates risks and uncertainty.
- Masculinity-femininity: degree to which society values assertiveness and materialism.
- Time orientation: degree to which a society emphasizes short term or long term goals.
Global Management Learning
- Comparative management: studies how management practices differ among countries and
• Global management attitudes and learning
- Ethnocentric attitude: believe the best approaches are found at home and tightly control foreign
- Polycentric attitude: respect local knowledge and allow foreign operations to run with substantial
- Geocentric attitude: high in cultural intelligence and take a collaborative approach to global
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The Nature of Entrepreneurship
- Success in a highly competitive business environment depends on entrepreneurship.
- Entrepreneurship: risk-taking behavior that results in new opportunities.
- Entrepreneur: willing to pursue opportunities in situations others view as problems or threats.
• Characteristics or entrepreneurs
- Internal locus of control: believing they control their own destiny; self directed.
- High energy level: persistent, hardworking and willing to exert extraordinary efforts to succeed.
- High need for achievement: motivated to accomplish challenging goals; they thrive on
- Tolerance for ambiguity: risk-takers; tolerates situations with high degree of uncertainty.
- Self confidence: feel competent, believe in them and are willing to make decisions.
- Passion and action orientation: try to act ahead of problems; do not like wasting valuable time.
- Self-reliance and desire for independence: they want to be their own boss and not work for others.
- Flexibility: are willing to change according to situations as they arise.
• Diversity and entrepreneurship
- Necessity-based entrepreneurship: takes place because other employment options do not exist.
- Entrepreneurship offers women and visible minorities’ opportunities to strike out on their own
and gain economic independence, providing a pathway for career success that may be blocked
Entrepreneurship and Small Businesses
- Small business: has fewer than 100 employees, is independently owned and operated and doesn’t
dominate its industry.
- Entrepreneurs may wish to own a small business:
*to be their own boss
*work for a family owned business
*seek to fulfill a dream
- Usually they may begin by buying a franchise; where a business owner sells to another the right
to operate the same business in another location.
• Family businesses
- Family business: is owned and controlled by members of a family.
- Family business feud: occurs when family members have major disagreements over how the
business should run.
- Succession problem: the issue of who will run the business when the current head leaves.
- Succession plan: describes how the leadership transition and related financial matters will be
Why So Many Businesses Fail
- Lack of experience: not having a lot of knowledge on how to run a business in the chosen market
- Lack of expertise: not having expertise in the essentials of business operations, including
financing, purchasing, selling and production.
Choosing the Form of Ownership
- Sole proprietorship: where an individual pursues a profit.
- Partnership: where two or more people agree to contribute resources to start and operate a
- Corporation: a legal entity that exists separately from its owners.
- Limited liability Corporation: a hybrid business form combining advantage of the sole
proprietorship, partnership and corporation.
Financing the New Venture
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- Two major ways an entrepreneur can obtain outside financing for a new venture:
*Debt financing: involves borrowing money that must be repaid overtime with interest.
*Equity financing: involves exchanging ownership shares for outside investment monies.
-usually obtained from venture capitalists, companies and individuals that make investments in
new ventures in return for an equity stake in the business.
-initial public offering (IPO): an initial setting of shares of stock to the public at large.
-angel investor: a wealthy individual willing to invest in a new venture in return for equity in a
Why and how managers plan
- Planning: process of setting objectives and determining how to accomplish them.
• Planning process
- Objectives: specific results that one wishes to achieve.
- Plan: statement of intended mean for accomplishing objectives.
(1) define your objective
(2) determine where you stand vis-a-vis objectives
(3) develop premises regarding future conditions
(4) analyze alternatives and make a plan
(5) implement plan and evaluate results
• Benefits of planning
- Improves focus and flexibility
- Improves action orientation (competency trap: being carried along by flow of events)
- Improves coordination and control
Types of Plans Used by Managers
- Long range and short range plans
- Strategic plan: identifies long term directions for organization
- Tactical plan: helps implement parts or all of a strategic plan
- Functional plan: different operations within organization will advance overall strategy
*production, financial, facilities, logistics, marketing, human resource
- Operational plan: identifies short term activities to implement strategic plan
- Budget: plan that commits resources to a project or activities.
- Zero based budget: allocates resources as if each budget were brand new
Planning Tools and Techniques
- Forecasting: attempts to predict future
- Contingency planning: identifies alternative actions to take if things go wrong.
- Scenario planning: identifies future scenarios and makes plans to deal with each.
- Bench marking: uses external and internal comparisons to plan for future improvements.
- Best practices: things done to lead to superior performance.
Implementing Plans to Achieve Results
- Goal setting (Rodgers and Kitz); Goals are SMART
*specific, measurable, attainable, referred to, timely
- Goal alignment
*hierarchy of goals: lower level goals are means to accomplishing higher level goals.
- Management by objectives: (MBQ) process of joint objective-setting between a superior and
- Improvement objectives: intentions for specific performance improvements.
- Participatory planning: includes persons who will be affected by plans and/or those who will
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• Competitive advantage
- Competitive advantage: the ability to do something so well that one outperforms competitors.
- Typical sources of competitive advantage:
*cost and quality: where strategy drives an emphasis on operating efficiency and product or
*knowledge and speed: where strategy drives an emphasis on innovation and speed of delivery to
market for new ideas.
*barriers to entry: where strategy drives an emphasis on creating a market stronghold that is
protected from entry by others.
*financial resources: where strategy drives an emphasis on investments or loss absorption that
competitors can’t match.
- Sustainable competitive advantage: the ability to outperform rivals in ways that are difficult or
costly to imitate.
Strategy and Strategic Intent
- Strategy: a comprehensive plan guiding resource allocation to achieve long term organization
- Strategic intent: focuses and applies organizational energies on a unifying and compelling goal.
• Levels of strategy
- Corporate level strategy: sets long term direction for the total enterprise.
- Business level strategy: identifies how a division or strategic business unit will compete in its
product or service domain.
- Functional strategy: guides activities within one specific area of operations.
• The strategic management process
- Strategic management: the process of formulating and implementing strategies.
- Strategic analysis: process of analyzing the organization, the environment and the organization`s
competitive position and current strategies.
- Strategy formulation: the process of crafting strategies to guide the allocation of resources.
- Strategy implementation: process of putting strategies into action.
Essentials of Strategic Analysis
• Analysis of mission, values and objectives
- Mission and stakeholders
*stakeholders: individuals and groups directly affected by the organization and its strategic
*strategic constituencies’ analysis: assess interests of stakeholders and how well the organization
is responding to them.
- Core values
*core values: broad beliefs about what is or is not appropriate behavior.
*organizational culture: the predominant value system for the organization as a whole.
*operating objectives: specific results that organizations try to accomplish.
*profitability: operating with a net profit.
*financial health: acquiring capital; earning positive returns.
*cost efficiency: using resources well to operate at low cost.
*customer service: meeting customer needs and maintaining loyalty.
*product quality: producing high quality goods or services.
*market share: gaining a specific share of possible customers.
*human talent: recruiting and maintaining a high quality workforce.
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*innovation: developing new products and processes.
*social responsibility: making a positive contribution to society.
• SWOT analysis of organization and environment
- SWOT analysis: examines organizational strengths and weaknesses and environmental
opportunities and threats.
- Organizational strengths and weaknesses
*a major goal in assessing strengths is to identify core competencies.
*core competencies: a special strength that gives an organization a competitive advantage.
*the goal in assessing weaknesses is to identify things that inhibit performance and hold the
organization back from fully accomplishing its objectives.
- Environmental opportunities and threats
• Analysis of rivalry and industry attractiveness
- Porter`s five forces model
(1) Industry competition: the intensity of ri