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
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
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
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 managerial decision-making.
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 Internet.
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
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
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 defin