BM 2024/25 Business Management PDF

Academic Year 2024/25 Business Management 3. Integrative Managerial Issues...

Academic Year 2024/25 Business Management 3. Integrative Managerial Issues Carlos Tam, PhD ([email protected]) 1 Learning objectives 3.1 Explain globalization and its impact on organizations. 3.2 Discuss how society’s expectations are influencing managers and organizations. 3.3 Discuss the factors that lead to ethical and unethical behavior in organizations. 3.4 Describe how the workforce is changing and its impact on the way organizations are managed. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 2 2 1  Myth Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 3 3 Truth Ethical misconduct is at an all-time low. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 4 4 2  Summary The media may be the cause of this myth. The idea that, “good news doesn’t sell newspapers,” has some truth to it. The issue of employees behaving ethically is an important one for today’s managers. However, managers also face other important issues associated with globalization and with employing and engaging a diverse global workforce. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 5 5 3.1 Globalization and its impact on organizations Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 6 6 3  Globalization and its impact (cont.) Management is no longer constrained by national borders. Major events such as catastrophic natural disasters and the global economic meltdown of the past few years have created challenges for managers doing business globally. BMW, a German-owned firm, builds cars in South Carolina, USA. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 7 7 Globalization and its impact (cont.) Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 8 8 4  Globalization and its impact McDonald’s sells hamburgers in China. The world has become a global village, a boundaryless world where goods and services are produced and marketed worldwide. To be effective in this boundaryless world, managers need to adapt. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 9 9 What does it mean to be "Global"? Organizations are considered global if they exchange goods and services with consumers in other countries. This marketplace globalization is the most common approach to being global. Many organizations are considered global because they use managerial and technical employee talent from other countries. An organization can be considered global if it uses financial sources and resources outside its home country, also known as financial globalization. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 10 10 5  How do organizations go Global? (cont.) An organization going global typically proceeds through stages as shown Global Investment Source: Robbins, Stephen P., Coulter, Mary, Management, 13th Ed., © 2016, p. 106. Reprinted and electronically reproduced by permission of Pearson Education, Inc., New York, NY Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 11 11 How do organizations go Global? (cont.) An organization going global typically proceeds through stages as shown Global sourcing (also called global outsourcing), which is purchasing materials or labor from around the world wherever it is cheapest. Exporting the organization’s products to other countries—that is, making products domestically and selling them abroad. Importing, which involves acquiring products made abroad and selling them domestically. Licensing or franchising, which are similar approaches involving one organization giving another organization the right to use its brand name, technology, or product specifications in return for a lump sum payment or a fee that is usually based on sales. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 12 12 6  How do organizations go Global? (cont.) Global strategic alliance is a partnership between an organization and a foreign company partner or partners in which both share resources and knowledge in developing new products or building production facilities. Specific type of strategic alliance in which the partners form a separate, independent organization for some business purpose is called a joint venture. Finally, managers may choose to directly invest in a foreign country by setting up a foreign subsidiary as a separate and independent facility or office. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 13 13 Types of global organizations Multinational companies or MNCs are any type of international company that maintains operations in multiple countries. Types of MNC’s: A multidomestic corporation – decentralizes management and other decisions to the local country where it is doing business. Transnational or borderless organization – companies that use an arrangement that eliminates artificial geographical barriers. Global Corporation – centralizes its management and other decisions in the home country. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 14 14 7  Managing in a Global Organization (cont.) A global world presents cultural challenges for managers, who hold a parochial view of the business world. Parochialism is a narrow focus in which managers see things only through their own eyes and from their own perspectives—not recognizing that countries have different values, morals, customs, political and economic systems, and laws—which can affect how a business is managed. The most important differences for managers to understand relate to a country’s social context or culture. E.g., status is perceived differently in different countries. In France, status is often the result of factors important to the organization, such as seniority, education, etc. In the US, status is more a function of what individuals have accomplished personally. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 15 15 Managing in a Global Organization Countries also have differences in their laws: In the United States, laws guard against employers’ taking action against employees solely on the basis of an employee’s age. Similar laws do not exist in all other countries. Viewing the global environment from any single perspective may be potentially problematic. An appropriate approach is recognizing the cultural dimensions of a country’s environment. A study of the differences of cultural environments was conducted by Geert Hofstede. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 16 16 8  Hofstede dimensions (cont.) Hofstede in the 1970s and 1980s surveyed over 116,000 employees in forty countries—all of whom worked for IBM. Hofstede found that managers and employees vary on the following five value dimensions of national culture: Power distance. Individualism versus collectivism. Uncertainty avoidance. Long-term versus short-term orientation. Quantity of life versus quality of life. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 17 17 Hofstede dimensions (cont.) Power distance. The degree to which people in a country accept that power in institutions and organizations is distributed unequally. Ranges from relatively low (low power distance) to extremely unequal (high power distance). Individualism versus collectivism. Individualism is the degree to which people in a country prefer to act as individuals rather than as members of groups. Collectivism is the equivalent of low individualism. Uncertainty avoidance. This dimension assesses the degree to which people in a country prefer structured over unstructured situations and whether people are willing to take risks. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 18 18 9  Hofstede dimensions (cont.) Long-term versus short-term orientation. People in cultures with long-term orientations look to the future and value thrift and persistence. A short-term orientation values the past and present and emphasizes respect for tradition and fulfilling social obligations. Quantity of life versus quality of life. Quantity of life is the degree to which values such as assertiveness, the acquisition of money and material goods, and competition are important. Quality of life is the degree to which people value relationships and show sensitivity and concern for the welfare of others. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 19 19 Globe: Dimensions of cultural difference (cont.) The Global Leadership and Organizational Behavior Effectiveness (GLOBE) research team, using data from more than 17,000 managers in 62 societies around the world, has identified nine dimensions in which national cultures differ: Assertiveness Individualism/Collectivism Future orientation In-group collectivism Gender differentiation Performance orientation Uncertainty avoidance Humane orientation Power distance Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 20 20 10  Globe: Dimensions of cultural difference (cont.) Assertiveness is the extent to which a society encourages people to be tough, confrontational, assertive, and competitive versus modest and tender. (The United States ranks high; Egypt ranks moderate; and Sweden ranks low.) Future orientation indicates the extent to which a society encourages and rewards future-oriented behavior such as planning, investing in the future, and delaying gratification. (Canada ranks high; Slovenia ranks moderate; and Russia ranks low.) Gender differentiation captures the extent to which a society maximizes gender role differences. (South Korea ranks high; Italy ranks moderate; and Denmark ranks low.) Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 21 21 Globe: Dimensions of cultural difference (cont.) Uncertainty avoidance is a society’s reliance on social norms and procedures to alleviate the unpredictability of future events. (Germany ranks high; Israel ranks moderate; and Hungary ranks low.) Power distance is the degree to which members of a society expect power to be unequally distributed. (Thailand ranks high; England ranks moderate; and South Africa ranks low.) Individualism and collectivism is the degree to which individuals are encouraged to integrate into groups within organizations and society. (Greece is highly individualistic; Hong Kong is moderately individualistic; and Singapore is collective.) Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 22 22 11  Globe: Dimensions of cultural difference In-group collectivism encompasses the extent to which members of a society take pride in their membership in small groups such as their family and circle of close friends and the organizations by which they are employed. (China ranks high; Qatar ranks moderate; and New Zealand ranks low.) Performance orientation refers to the degree to which a society encourages and rewards group members for performance improvement and excellence. (Taiwan is high; Spain is moderate; and Greece is low.) Humane orientation is the degree to which a society encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others. (Indonesia ranks high; Hong Kong ranks moderate; and France ranks low.) Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 23 23 3.2 What does society expect from organizations and managers? Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 24 24 12  Society’s Expectations Many managers believe that society expects organizations and managers to be responsible and ethical. However, judging from recent financial scandals at Enron, Bernard Madoff Investment Securities, HealthSouth, and others, managers don’t always act responsibly or ethically. This photo is part of Artsana’s global “Happiness Goes from Heart to Heart” project aimed at treating childhood heart disease. The Italian bay care product maker views the project as an important component of its mission to make children happy and give them something to smile about. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 25 25 Social Responsibility How can organizations demonstrate socially responsible action? Social responsibility (also known as corporate social responsibility (CSR)) is a business’s intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society. Social obligations occurs when a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities. Social responsiveness is seen when a firm engages in social actions in response to some popular social need. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 26 26 13  Should organizations be socially involved? The importance of corporate social responsibility surfaced in the 1960s when social activists questioned the singular economic objective of business. Even today, good arguments can be made for and against businesses being socially responsible, as shown here in figure on the right. Managers regularly confront decisions that have a dimension of social responsibility, such as philanthropy, pricing, employee relations, resource conservation, product quality, and doing business in countries with oppressive governments. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 27 27 Does social involvement affect economic performance? Few terms have been defined in as many different ways as social responsibility. Social responsibility can include: philanthropy, pricing, employee relations, resource conversation, product quality, and doing business in countries with oppressive governments, etc. A majority of studies have found a positive relationship between social involvement and economic performance, but some caution in this regard is necessary because of methodological questions associated with the measurement of social responsibility and economic performance. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 28 28 14  What is Sustainability and why is it important? Many companies have announced plans to move to more environmentally sustainable products and services including Walmart’s plan to remove 20 million metric tons of greenhouse gas emissions from supply chains. Sustainability has become a mainstream issue for managers. Managing in a sustainable way includes widening corporate responsibility not only to managing in an efficient and effective way, but also to responding strategically to a wide range of environmental and societal challenges. Sustainability has been defined as a company’s ability to achieve its business goals and increase long-term shareholder value by integrating economic, environmental, and social opportunities into its business strategies. Following sustainability practices is one way in which organizations can show customers their commitment to being responsible. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 29 29 3.3 What factors determine ethical and unethical behaviors? Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 30 30 15  Ethical Behavior Ethics: a set of rules or principles that defines right and wrong conduct While most people recognize that something illegal is also unethical, what about questionable “legal” areas or strict organizational policies? Suppose you managed an employee who worked all weekend on a rush project. You told the employee to take two days off sometime later and mark the days as “sick days” because your company had a clear policy that overtime would not be compensated for any reason. Would that be wrong? As a manager, how will you handle such situations? Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 31 31 Ethical Behavior To better understand what’s involved in managerial ethics, let’s look at three different perspectives on how managers make ethical decisions. The Utilitarian View: What action provides the greatest amount of good for the greatest number of people? The Rights View: Human beings have certain moral entitlements that must be respected at all times. Theory of Justice View: Benefits and burdens are equitably distributed. The goal is to be equitable, fair, and impartial in making decisions. For instance, such a manager would pay individuals of similar skill, performance, or responsibility level the same wage and wouldn’t base that decision on gender, personality, or favoritism. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 32 32 16  What determines Ethical Behavior? Whether a manager or employee acts ethically or unethically depends on several factors: Morality Values Experience Organization’s culture Ethical issue being faced Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 33 33 What determines Ethical Behavior? - Example Ambiguity over what is ethical can be a problem for managers. For example, how would you respond in the following situation? Someone in your class stole the final exam and is selling a copy for 50 Eur each. You need to do well on the exam or risk failing the course. You suspect that some classmates have bought copies, which could affect any results because your professor grades on a curve. Question: Do you buy a copy because you fear that without it you’ll be disadvantaged, do you refuse to buy a copy and try your best, or do you report your knowledge to your instructor? Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 34 34 17  Encouraging Ethical Behavior Three ways in which managers can encourage ethical behavior and create a comprehensive ethics program include: A code of ethics is a formal statement of an organization’s primary values and the ethical rules it expects employees to follow. In addition, decision rules can be developed to guide managers in handling ethical dilemmas in decision making. Top management’s leadership and commitment to ethical behavior is extremely important since the cultural tone for an organization is established by its top managers. Ethics training should be used to help teach ethical problem solving and to present simulations of ethical situations that could arise. At the least, ethics training should increase awareness of ethical issues. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 35 35 Being an Ethical Leader Here we see suggestions for being an ethical leader: Be a good role model by being ethical and honest. Tell the truth always. Don’t hide or manipulate information. Be willing to admit your failures. Share your personal values by regularly communicating them to employees. Stress the organization’s or team’s important shared values. Use the reward system to hold everyone accountable to the values. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 36 36 18  Ethics Training Can ethics be taught? Critics: value systems learned in youth. Critics maintain that people establish their individual value systems when they’re young, so later training is pointless. Proponents: values can be learned and ethical problem solving increases ethical behavior, moral development, awareness. It’s never too late to learn values. Teaching ethical problem solving increases: Instances of better ethical behaviors; Individuals’ level of moral development; and Awareness of ethical issues in business. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 37 37 3.4 What is today’s workforce like and how does it affect the way organizations are managed? Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 38 38 19  The Changing Workforce Organizational diversity is becoming more common in organizations, both domestically and globally. Whether in a workplace or classroom, diversity is visible in age, gender, race, physical attributes, styles of dress, and even personality type. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 39 39 Workplace Diversity Workforce diversity is defined as the ways in which people in an organization are different from and similar to one another. Diversity has been one of the foremost business topics over the last two decades, along with such modern business disciplines as quality, leadership, and ethics. Today, diversity focuses on both the differences and similarities of employees, which reinforces the belief that managers and organizations should view employees as having qualities in common as well as differences, and find ways to develop strong relationships with and engage their entire workforce. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 40 40 20  Types of Workplace Diversity (cont.) Age of the population is shifting critically in the workforce. With many baby boomers still employed and active, managers must ensure that those employees do not face discrimination. Gender diversity issues are still prevalent as women and men now each make up almost half of the workforce, especially with regards to gender pay gap, career start and progress, and misconceptions about women’s performance as compared with men’s. Race is the biological heritage (including physical characteristics such as one’s skin color and associated traits) that people use to identify themselves. Ethnicity refers to social traits, such as one’s cultural background or allegiance, that are shared by a human population. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 41 41 Types of Workplace Diversity (cont.) Disabilities/abilities includes adherence to the 1990 Disabilities Act (ADA), which prohibits discrimination against persons with disabilities and requires employers to make reasonable accommodations so their workplaces are accessible to people with physical or mental disabilities. Title VII of the Civil Rights Act prohibits discrimination on the basis of religion, race or ethnicity, country of origin, and gender. In accommodating religious diversity, managers need to recognize and be aware of different religions, their beliefs, religious holidays, and more. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 42 42 21  Types of Workplace Diversity (cont.) Next let’s look at sexual orientation and gender identity. The acronym GLBT refers to gay, lesbian, bisexual, and transgender people. U.S. federal law does not prohibit discrimination against employees on the basis of sexual orientation, although many states and municipalities do. In Europe, the Employment Equality Directive required all European Union member states to introduce legislation making it unlawful to discriminate on grounds of sexual orientation, but much more needs to be done. Managers need to look at how best to meet the needs of their GLBT employees and respond to employees’ concerns while creating a safe and productive work environment for all. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 43 43 Types of Workplace Diversity Other types of diversity include issues arising from socioeconomic backgrounds, team members from different functional areas or organizational units, physical attractiveness, obesity, job seniority, or intellectual abilities. Managers need to ensure that all employees are treated fairly and given the opportunity and support to do their jobs to the best of their abilities. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 44 44 22  Adapting to a Changing Workforce (cont.) Managers are adapting to changes taking place in the workforce with such diversity initiatives as work-life balance programs, contingent jobs, and recognition of generational differences. Due to 24/7 global business and technological access and dual-career families, many organizations now offer family- friendly benefits that provide flexible scheduling options, on- site child care, flextime, job sharing, telecommuting, part-time employment, and more. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 45 45 Adapting to a Changing Workforce The labor force has begun shifting away from traditional full- time jobs toward a contingent workforce of part-time, temporary, and contract workers who are hired on an as- needed basis. Supervising and motivating such independent contractors has its own set of challenges and expectations for managers. Generational differences present challenges ranging from appearance to technology and management style, which can be accommodated by flexibility. For example, Gen Y employees want bosses who are open-minded; experts in their field, even if they aren’t tech savvy; organized; and want teachers who respect their need for work-life balance, provide constant feedback, communicate in compelling ways, and provide stimulating learning. Instituto Superior de Estatística e Gestão de Informação Universidade Nova de Lisboa 46 46 23  Business Management Thank you Carlos Tam ([email protected]) Campus de Campolide 1070-312 Lisboa Portugal Tel: +351 213 828 610 Fax: +351 213 828 611 47 24