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Chapter 1: Introducing Management
What are the challenges of working in the new economy?
People and their talents – what they know, what they learn, and what they do with it – are the ultimate
foundations of organizational performance. Intellectual capital is the collective brainpower or shared
knowledge of a workforce than can be used to create value (Intellectual Capital = Competency x
Commitment). A knowledge worker is someone whose mind is a critical asset to employers and adds to the
intellectual capital of the organization.
Workforce diversity is the composition of a workforce in terms of differences among people whether it be
their gender, age, race, ethnicity, religion, sexual orientation or able-bodiedness. Prejudice, or the holding of
negative opinions and attitudes to a diversified population, sets the stage for diversity bias. A subtle form of
discrimination is called the glass ceiling effect – an invisible barrier or “ceiling” that prevents minorities from
rising above a certain level of organizational responsibility.
Globalization is the worldwide interdependence of resource flows, product markets, and business
competition that characterizes our new economy. It is a process in which improvements of technology
combine with the deregulation of markets to bring out flows of people, goods, services and money.
The forces of globalization ride on the foundation of the Internet and the growth of communication
technologies. Bar codes, automatic tellers, email, blogs, text messaging, online media and social networks are
some of the technologies driving the world.
Ethics is a code of moral principles that sets standards of what is “good” and “right” as opposed to “bad” and
The Shamrock Organization is an analogy to discuss career patterns characteristic of the new economy. The
three leaves of the shamrock structure include full time core workers, independent contractors and part time
temporaries. A portfolio worker is someone who always has the skills needed to readily shift jobs or even
What are organizations like in the new workplace?
An organization is a collection of people working together to achieve a common purpose. All organizations
share a broad purpose-providing goods or services of value to customers and clients. Organizations are open
systems, meaning it transforms resource inputs from the environment into product outputs. Productivity
measures the quantity and quality of outputs relative to the cost of inputs. Performance effectiveness is an
output measure of task or goal accomplishment (eg. meeting a daily target). Performance efficiency in an
input measure of the resource costs associated with goal accomplishment.