Introduction to Management Lecture Slides PDF

2025-01-11 Introduction to Management IND300 Lecturer 1 Management Today This slide deck contains animations. P...

2025-01-11 Introduction to Management IND300 Lecturer 1 Management Today This slide deck contains animations. Please disable animations if they cause issues with your device. Copyright ©2021 John Wiley & Sons Canada, Ltd. 1 Learning Objectives 1.1 Summarize the challenges of developing and maintaining career readiness in the new economy. 1.2 Describe what organizations are like as work settings. 1.3 Discuss what it means to be a manager. 1.4 Explain the functions, roles, and activities of managers. 1.5 Summarize how we learn and use essential skills for career success. Copyright ©2021 John Wiley & Sons Canada, Ltd. 2 2 1  2025-01-11 Working Today (1 of 10) Talent High-performing organizations get extraordinary results from their employees by properly utilizing their skills Intellectual capital is the combined brainpower and shared knowledge of an organization’s employees A knowledge worker’s mind is a critical asset to employers and requires ongoing development of multiple skillsets Copyright ©2021 John Wiley & Sons Canada, Ltd. 3 3 Working Today (2 of 10) Copyright ©2021 John Wiley & Sons Canada, Ltd. 4 4 2  2025-01-11 Working Today (3 of 10) Technology We are currently in the fourth industrial age – cloud computing, mobile internet, automation, robotics, artificial intelligence Tech IQ is a person’s ability to use current technologies at work and in personal life: o Checking inventory, making a sales transaction, ordering supplies o Telecommuting o Virtual teams Copyright ©2021 John Wiley & Sons Canada, Ltd. 5 5 Working Today (4 of 10) Globalization The worldwide interdependence of resource flows, product markets, and business competition that characterize our economy Job migration occurs when firms shift jobs from one country to another Reshoring is the shifting of manufacturing and jobs back home from overseas Copyright ©2021 John Wiley & Sons Canada, Ltd. 6 6 3  2025-01-11 Working Today (5 of 10) Ethics Code of moral principles that sets standards of conduct of what is “good” and “right”, as well as “bad” and “wrong” o An individual behaviour o In business practices o Moral leadership and integrity Copyright ©2021 John Wiley & Sons Canada, Ltd. 7 7 Working Today (6 of 10) Corporate Governance Board of directors holds top management responsible for organizational performance Copyright ©2021 John Wiley & Sons Canada, Ltd. 8 8 4  2025-01-11 Working Today (7 of 10) Diversity Workforce diversity reflects differences with respect to gender, age, race, ethnicity, religion, sexual orientation, and able-bodiedness A diverse and multicultural workforce both challenges and offers opportunities to employers Copyright ©2021 John Wiley & Sons Canada, Ltd. 9 9 Working Today (8 of 10) Diversity How diversity bias can occur in the workplace: o Prejudice – the display of negative, irrational opinions and attitudes o Discrimination – unfairly treating members of some groups o Glass ceiling effect – an invisible barrier or ceiling Copyright ©2021 John Wiley & Sons Canada, Ltd. 10 10 5  2025-01-11 Working Today (9 of 10) Careers and Connections Organizations consist of three types of workers, sometimes referred to as a shamrock organization Copyright ©2021 John Wiley & Sons Canada, Ltd. 11 11 Working Today (10 of 10) Careers and Connections Free-agent economy o People change jobs more often and work on flexible contracts Self-management o Ability to assess oneself realistically, recognize strengths and weaknesses, make constructive changes, and manage personal development Copyright ©2021 John Wiley & Sons Canada, Ltd. 12 12 6  2025-01-11 Discussion 1 Discussion What career risks and opportunities is AI creating for today’s post-secondary graduates? Copyright ©2021 John Wiley & Sons Canada, Ltd. 13 13 Organizations (1 of 6) Organizations A collection of people working together to achieve a common purpose Organizations provide goods and services of value to customers and clients, and seek to serve society Copyright ©2021 John Wiley & Sons Canada, Ltd. 14 14 7  2025-01-11 Organizations (2 of 6) Organizations as open systems interact with their environments Copyright ©2021 John Wiley & Sons Canada, Ltd. 15 15 Organizations (3 of 6) Organizational performance “Value creation” is a very important notion for organizations Value is created when an organization’s operations add value to the original cost of resource inputs When value creation occurs: o Businesses earn a profit o Nonprofit organizations add wealth to society Copyright ©2021 John Wiley & Sons Canada, Ltd. 16 16 8  2025-01-11 Organizations (4 of 6) Organizational performance Productivity: An overall measure of the quantity and quality of work performance (outputs) relative to resource utilization (inputs) Performance effectiveness: An output measure of task or goal accomplishment Performance efficiency: An input measure of the resource costs associated with goal accomplishment Copyright ©2021 John Wiley & Sons Canada, Ltd. 17 17 Organizations (5 of 6) Productivity and the dimensions of organizational performance Copyright ©2021 John Wiley & Sons Canada, Ltd. 18 18 9  2025-01-11 Organizations (6 of 6) Workplace changes that provide a context for studying management Focus on valuing human capital Demise of “command-and-control” Emphasis on teamwork Pre-eminence of technology Importance of networking New workforce expectations Concern for sustainability Copyright ©2021 John Wiley & Sons Canada, Ltd. 19 19 Discussion 2 When is it acceptable to sacrifice performance efficiency for performance effectiveness? Copyright ©2021 John Wiley & Sons Canada, Ltd. 20 20 10  2025-01-11 Managers (1 of 11) Importance of human resources and managers People are not ‘costs to be controlled’ High performing organizations treat people as valuable strategic assets Copyright ©2021 John Wiley & Sons Canada, Ltd. 21 21 Managers (2 of 11) Managers Directly support, supervise, and help activate the work efforts of others The people who managers help are the ones whose contributions represent the real work of the organization Copyright ©2021 John Wiley & Sons Canada, Ltd. 22 22 11  2025-01-11 Managers (3 of 11) Levels of management Board of directors makes sure the organization is run well Top managers are responsible for performance of an organization as a whole or for one of its major parts Middle managers oversee large departments or divisions Team leaders supervise groups of non-managerial workers Copyright ©2021 John Wiley & Sons Canada, Ltd. 23 23 Managers (4 of 11) Management levels in a typical business and non-profit organizations Copyright ©2021 John Wiley & Sons Canada, Ltd. 24 24 12  2025-01-11 Managers (5 of 11) Types of managers: Line managers are responsible for work activities that directly affect organization’s outputs Staff managers use technical expertise to advise and support the efforts of line workers Functional managers are responsible for a single area of activity Copyright ©2021 John Wiley & Sons Canada, Ltd. 25 25 Managers (6 of 11) Types of managers: General managers are responsible for more complex units that include many functional areas Administrators are managers who work in public and non-profit organizations Copyright ©2021 John Wiley & Sons Canada, Ltd. 26 26 13  2025-01-11 Managers (7 of 11) Managerial performance accountability is the requirement to show performance results to a supervisor Effective managers help others achieve high performance and satisfaction in their work Copyright ©2021 John Wiley & Sons Canada, Ltd. 27 27 Managers (8 of 11) Quality of work life (QWL) An indicator of the overall quality of human experiences in the workplace It is considered a high-priority issue of human sustainability Copyright ©2021 John Wiley & Sons Canada, Ltd. 28 28 14  2025-01-11 Managers (9 of 11) QWL Indicators Respect Fair pay Safe working conditions Opportunities to learn and use new skills Room to grow and progress in a career Protection of individual rights and wellness Copyright ©2021 John Wiley & Sons Canada, Ltd. 29 29 Managers (10 of 11) The organization as an upside-down pyramid A manager’s job is to support workers’ efforts The best managers are known for helping and supporting Customers at the top are served by workers who are supported by managers Copyright ©2021 John Wiley & Sons Canada, Ltd. 30 30 15  2025-01-11 Managers (11 of 11) The organization viewed as an upside-down pyramid Copyright ©2021 John Wiley & Sons Canada, Ltd. 31 31 Discussion 3 In what ways should the work of a top manager differ from that of a team leader? Copyright ©2021 John Wiley & Sons Canada, Ltd. 32 32 16  2025-01-11 The Management Process (1 of 7) Managers achieve high performance for their organizations by best utilizing its human and material resources Management is the process of planning, organizing, leading, and controlling the use of resources to accomplish performance goals All managers are responsible for the four functions The functions are carried on continually Copyright ©2021 John Wiley & Sons Canada, Ltd. 33 33 The Management Process (2 of 7) Four functions of management – planning, organizing, leading, and controlling Copyright ©2021 John Wiley & Sons Canada, Ltd. 34 34 17  2025-01-11 The Management Process (3 of 7) Functions of Management Planning o The process of setting objectives and determining what actions should be taken to accomplish them Organizing o The process of assigning tasks, allocating resources, and coordinating work activities Copyright ©2021 John Wiley & Sons Canada, Ltd. 35 35 The Management Process (4 of 7) Functions of Management Leading o The process of arousing people’s enthusiasm and inspiring them to work hard to achieve goals Controlling o The process of measuring work performance, comparing results, and taking corrective action Copyright ©2021 John Wiley & Sons Canada, Ltd. 36 36 18  2025-01-11 The Management Process (5 of 7) Mintzberg’s 10 Managerial Roles Copyright ©2021 John Wiley & Sons Canada, Ltd. 37 37 The Management Process (6 of 7) Characteristics of managerial work Long hours Intense pace Fragmented and varied tasks Many communication media Filled with interpersonal relationships Copyright ©2021 John Wiley & Sons Canada, Ltd. 38 38 19  2025-01-11 The Management Process (7 of 7) Managerial agendas and networks Agenda setting o Develops action priorities for accomplishing goals and plans Networking o Process of building and maintaining positive relationships with people who can help advance agendas Social Capital o Capacity to attract support and help from others Copyright ©2021 John Wiley & Sons Canada, Ltd. 39 39 Learning How to Manage Learning The change in a behaviour that results from experience Lifelong learning The process of continuously learning from daily experiences and opportunities Copyright ©2021 John Wiley & Sons Canada, Ltd. 40 40 20  2025-01-11 Katz’ Essential Managerial Skills Katz’ essential managerial skills – technical, human, and conceptual Copyright ©2021 John Wiley & Sons Canada, Ltd. 41 41 Discussion 4 How might the upside-down pyramid view of organizations affect a manager’s approach to planning, organizing, leading, and controlling? Copyright ©2021 John Wiley & Sons Canada, Ltd. 42 42 21  2025-01-11 Copyright Copyright © 2021 John Wiley & Sons Canada, Ltd. All rights reserved. Reproductions or translations of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein. Copyright ©2021 John Wiley & Sons Canada, Ltd. 43 43 22 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Introduction to Management IND300 Lecturer 2 Management Learning Past to Present Copyright ©2021 John Wiley & Sons Canada, Ltd. 1 Learning Objectives 2.1 Describe the principal insights of classical management thinking. 2.2 Identify key insights of the behavioral management approaches. 2.3 Explain the core foundations of modern management theory and practice. Copyright ©2021 John Wiley & Sons, Inc. 2 2 1 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Major Classical Approach Branches to Management Major branches in the classical approach to management Copyright ©2021 John Wiley & Sons Canada, Ltd. 3 3 Classical Management Approaches (1 of 8) Four guiding principles of scientific management (Frederick Taylor) 1. Develop a “science” that includes rules of motion, standardized work implements, and proper working conditions for every job. 2. Carefully select workers with the right abilities for the job. 3. Carefully train workers to do the job and give them incentives to cooperate with the job “science.” 4. Support workers by carefully planning their task and by smoothing the way as they do their work. Copyright ©2021 John Wiley & Sons Canada, Ltd. 4 4 2 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Classical Management Approaches (2 of 8) Scientific management (the Gilbreths) Motion study o Science of reducing a job or task to its basic physical motions o Eliminating wasted motions improves performance o Improved performance results in increased productivity Copyright ©2021 John Wiley & Sons Canada, Ltd. 5 5 Classical Management Approaches (3 of 8) Practical insights from scientific management Make results-based compensation a performance incentive Carefully design jobs with efficient work methods Carefully select workers with the abilities to do these jobs Train workers to perform jobs to the best of their abilities Train supervisors to support workers so they can perform to the best of their abilities Copyright ©2021 John Wiley & Sons Canada, Ltd. 6 6 3 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Classical Management Approaches (4 of 8) Administrative principles (Henri Fayol) – rules / duties of management: Foresight o to complete a plan of action for the future Organization o to provide and mobilize resources to implement the plan Command o to lead, select, and evaluate workers to get the best work toward the plan Copyright ©2021 John Wiley & Sons Canada, Ltd. 7 7 Classical Management Approaches (5 of 8) Administrative principles (Henri Fayol) – rules / duties of management (cont’d): Coordination o to fit diverse efforts together and ensure information is shared and problems solved Control o to make sure things happen according to plan and to take necessary corrective action Copyright ©2021 John Wiley & Sons Canada, Ltd. 8 8 4 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Classical Management Approaches (6 of 8) Bureaucratic organization (Max Weber) Bureaucracy o An ideal, intentionally rational, and very efficient form of organization o Based on principles of logic, order, and legitimate authority o Believed that it would use resources more efficiently and treat employees more fairly Copyright ©2021 John Wiley & Sons Canada, Ltd. 9 9 Classical Management Approaches (7 of 8) Characteristics of bureaucratic organizations: Clear division of labour Clear hierarchy of authority Formal rules and procedures Impersonality Careers based on merit Copyright ©2021 John Wiley & Sons Canada, Ltd. 10 10 5 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Classical Management Approaches (8 of 8) Possible disadvantages of bureaucracy Excessive paperwork or “red tape” Slowness in handling problems Rigidity in the face of shifting customer needs High resistance to change Employee apathy Copyright ©2021 John Wiley & Sons Canada, Ltd. 11 11 Discussion 1 Should Weber’s notion of the ideal bureaucracy be scrapped altogether, or is it still relevant today? Copyright ©2021 John Wiley & Sons Canada, Ltd. 12 12 6 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Behavioural Management Approaches (1 of 16) Foundations in the behavioural or human resource approaches to management Copyright ©2021 John Wiley & Sons Canada, Ltd. 13 13 Behavioural Management Approaches (2 of 16) Follett’s organizations as communities (Mary Parker Follett) Groups and human cooperation o Groups allow individuals to combine their talents for a greater good o Organizations are cooperating “communities” of managers and workers o Manager’s job is to help people cooperate and achieve an integration of goals and interests Copyright ©2021 John Wiley & Sons Canada, Ltd. 14 14 7 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Behavioural Management Approaches (3 of 16) Organizations as communities Forward-looking management insights: o Making every employee an owner creates a sense of collective responsibility precursor of employee ownership, profit sharing, and gain-sharing o Business problems involve a variety of inter-related factors precursor of systems and contingency thinking o Private profits must be considered relative to public good precursor of managerial ethics and corporate social responsibility Copyright ©2021 John Wiley & Sons Canada, Ltd. 15 15 Behavioural Management Approaches (4 of 16) Hawthorne studies Initial study examined how economic incentives and physical conditions affected worker output No consistent relationship found “Psychological factors” influenced results Copyright ©2021 John Wiley & Sons Canada, Ltd. 16 16 8 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Behavioural Management Approaches (5 of 16) Hawthorne studies Social setting and human relations o Manipulated physical work conditions to assess impact on output o Designed to minimize the “psychological factors” of previous experiment o Mayo and colleagues concluded: New “social setting” led workers to do good job Good “human relations” = higher productivity Copyright ©2021 John Wiley & Sons Canada, Ltd. 17 17 Behavioural Management Approaches (6 of 16) Hawthorne studies Employee attitudes and group processes o Some things satisfied some workers but not others o People restricted output to adhere to group norms Copyright ©2021 John Wiley & Sons Canada, Ltd. 18 18 9 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Behavioural Management Approaches (7 of 16) Lessons from the Hawthorne Studies Social and human factors are keys to productivity Hawthorne effect — people who are singled out for special attention perform as expected Copyright ©2021 John Wiley & Sons Canada, Ltd. 19 19 Behavioural Management Approaches (8 of 16) Maslow’s theory of human needs A need is a physiological or psychological deficiency a person feels compelled to satisfy o Physiological o Safety o Social o Esteem o Self-actualization Copyright ©2021 John Wiley & Sons Canada, Ltd. 20 20 10 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Behavioural Management Approaches (9 of 16) Maslow’s hierarchy of human needs Copyright ©2021 John Wiley & Sons Canada, Ltd. 21 21 Behavioural Management Approaches (10 of 16) Maslow’s theory of human needs Deficit principle o A satisfied need is not a motivator of behavior – people try to satisfy deprived needs Progression principle o A need becomes a motivator once the preceding lower-level need is satisfied – people try to satisfy these needs in sequence Both principles cease to operate at self-actualization level Copyright ©2021 John Wiley & Sons Canada, Ltd. 22 22 11 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Behavioural Management Approaches (11 of 16) McGregor’s Theory X assumes that workers: Dislike work Lack ambition Are irresponsible Resist change Prefer to be led Copyright ©2021 John Wiley & Sons Canada, Ltd. 23 23 Behavioural Management Approaches (12 of 16) McGregor’s Theory Y assumes that workers are: Willing to work hard Willing to accept responsibility Capable of self control Capable of self-direction Imaginative and creative Copyright ©2021 John Wiley & Sons Canada, Ltd. 24 24 12 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Behavioural Management Approaches (13 of 16) Implications of Theory X and Theory Y: Managers create self-fulfilling prophecies Theory X managers create situations where workers become dependent and reluctant Theory Y managers create situations where workers respond with initiative and high performance o Central to notions of empowerment and self-management Copyright ©2021 John Wiley & Sons Canada, Ltd. 25 25 Behavioural Management Approaches (14 of 16) Argyris’s theory of adult personality Classical management principles and practices inhibit worker maturation and are inconsistent with the mature adult personality Psychological success occurs when people define own goals Copyright ©2021 John Wiley & Sons Canada, Ltd. 26 26 13 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Behavioural Management Approaches (15 of 16) Argyris’s theory of adult personality Management practices should accommodate the mature personality by: o Increasing task responsibility o Increasing task variety o Using participative decision making Copyright ©2021 John Wiley & Sons Canada, Ltd. 27 27 Behavioural Management Approaches (16 of 16) Foundations for continuing developments in management Quantitative analysis and tools Organizations as systems Contingency thinking Quality management Evidence-based management Copyright ©2021 John Wiley & Sons Canada, Ltd. 28 28 14 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Discussion 2 How can a manager benefit by using insights from Maslow’s hierarchy of needs theory? Copyright ©2021 John Wiley & Sons Canada, Ltd. 29 29 Modern Management Foundations (1 of 8) Quantitative Analysis and Tools Analytics – the use of large data bases and mathematics to solve problems and make informed decisions using systematic analysis Typical quantitative approach to managerial problem-solving o Problem encountered, it is systematically analyzed, appropriate mathematical models and computations applied, optimal solution identified Copyright ©2021 John Wiley & Sons Canada, Ltd. 30 30 15 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Discussion 1 How can a manager benefit by using insights from Maslow’s hierarchy of needs theory? Copyright ©2021 John Wiley & Sons Canada, Ltd. 31 31 Modern Management Foundations (2 of 8) Organizations as systems System o Collection of interrelated parts that function together to achieve a common purpose Subsystem o A smaller component of a larger system Open systems o Organizations that interact with their environments in the continual process of transforming resource inputs into outputs Copyright ©2021 John Wiley & Sons Canada, Ltd. 32 32 16 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Modern Management Foundations (3 of 8) Organizations as complex networks of interacting subsystems Copyright ©2021 John Wiley & Sons Canada, Ltd. 33 33 Modern Management Foundations (4 of 8) Contingency thinking Tries to match managerial responses with problems and opportunities unique to different situations No “one best way” to manage in all circumstances The appropriate way to manage depends on the situation Copyright ©2021 John Wiley & Sons Canada, Ltd. 34 34 17 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Modern Management Foundations (5 of 8) Quality management Managers and workers in progressive organizations are quality conscious o Quality and competitive advantage are linked Total quality management (TQM) o Comprehensive approach to continuous improvement for the entire organization o The focus is on meeting customers’ needs by doing things right the first time Copyright ©2021 John Wiley & Sons Canada, Ltd. 35 35 Modern Management Foundations (6 of 8) Quality management Continuous improvement o Continual search for new ways to improve quality o Something always can and should be improved ISO certification o Global quality management standards o Refine and upgrade quality to meet ISO requirements o A rigorous assessment to ensure standards are met Copyright ©2021 John Wiley & Sons Canada, Ltd. 36 36 18 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Modern Management Foundations (7 of 8) Evidence-Based Management Making management decisions based on “hard facts” about what really works Managers should be well informed and knowledgeable when making decisions Management must conduct solid and meaningful research using scientific methods Copyright ©2021 John Wiley & Sons Canada, Ltd. 37 37 Modern Management Foundations (8 of 8) Evidence-Based Positive Human Resource Management Practices Employment security Selective hiring Self-managing teams High pay based on merit Training and development Reduced status distinctions Shared information Copyright ©2021 John Wiley & Sons Canada, Ltd. 38 38 19 Kring Ch3 Diagnosis and Assessment.ppt 1/11/2025 Discussion 3 Can system and subsystem dynamics help describe and explain performance problems for an organization in your community? Copyright ©2021 John Wiley & Sons Canada, Ltd. 39 39 Copyright Copyright © 2018 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein. Copyright ©2021 John Wiley & Sons Canada, Ltd. 40 40 20  2025-01-11 Management IND300 Lecture 3 Ethics and Social Responsibility This slide deck contains animations. Please disable animations if they cause issues with your device. Copyright ©2021 John Wiley & Sons Canada, Ltd. 1 Learning Objectives 3.1 Define ethics and describe the foundations of ethical behaviour. 3.2 Discuss ethical dilemmas and common ethics issues in the workplace. 3.3 Describe approaches to maintaining high ethical standards. 3.4 Discuss social responsibility and corporate governance. Copyright ©2021 John Wiley & Sons Canada, Ltd. 2 2 1  2025-01-11 Ethics (1 of 8) Ethics Moral code of principles. Set standards of “good” or “bad” or “right” or “wrong” in one’s conduct Individuals are influenced by family, friends, culture, religion, etc. Ethical behaviour What is accepted as good and right in the context of the governing moral code Copyright ©2021 John Wiley & Sons Canada, Ltd. 3 3 Ethics (2 of 8) Laws and values as influences on ethical behaviour: Legal behaviour is not necessarily ethical behaviour. Personal values help determine individual ethical behaviour. Copyright ©2021 John Wiley & Sons Canada, Ltd. 4 4 2  2025-01-11 Ethics (3 of 8) Laws and values as influences on ethical behaviour: Values - underlying beliefs and attitudes that help influence individual behaviour o Terminal values - preferences about desired ends or goals in life o Instrumental values – preferences regarding the means to desired ends, such as honesty, ambition, etc. Copyright ©2021 John Wiley & Sons Canada, Ltd. 5 5 Ethics (4 of 8) Four views of ethical behaviour Copyright ©2021 John Wiley & Sons Canada, Ltd. 6 6 3  2025-01-11 Ethics (5 of 8) Four alternative ethical views Utilitarian o Delivers the greatest good to the most people Individualism o Advances long-term self-interests Moral rights o Respects and protects the fundamental rights of all people Copyright ©2021 John Wiley & Sons Canada, Ltd. 7 7 Ethics (6 of 8) Four alternative ethical views Justice o Fair and impartial treatment of people according to legal rules and standards Procedural justice – policies and rules fairly applied to all individuals Distributive justice – fair distribution of outcomes to all concerned Interactional justice – all persons treated with dignity and respect Commutative justice – fairness of exchanges or transactions to all involved Copyright ©2021 John Wiley & Sons Canada, Ltd. 8 8 4  2025-01-11 Ethics (7 of 8) Cultural issues in ethical behaviour: Cultural relativism o Ethical behaviour is always determined by cultural context Moral absolutism o Behaviour unacceptable in one’s home environment should not be acceptable anywhere else Ethical imperialism o Imposing one’s ethical standards on others Copyright ©2021 John Wiley & Sons Canada, Ltd. 9 9 Ethics (8 of 8) The extremes of cultural relativism and ethical imperialism in international business ethics. Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,” Harvard Business Review, vol. 74 (September–October 1996), pp. 48–62. Copyright ©2021 John Wiley & Sons Canada, Ltd. 10 10 5  2025-01-11 Discussion 1 Is there ever a justification for cultural relativism in international business ethics? Copyright ©2021 John Wiley & Sons Canada, Ltd. 11 11 Ethics in the Workplace (1 of 10) Ethical dilemmas occur when choices, although having potential for personal and/or organizational benefit, may be considered unethical require action, but no clear consensus on right or wrong Copyright ©2021 John Wiley & Sons Canada, Ltd. 12 12 6  2025-01-11 Ethics in the Workplace (2 of 10) Ethical dilemmas common examples include: Discrimination Sexual harassment Conflicts of interest Product safety Use of organizational resources Copyright ©2021 John Wiley & Sons Canada, Ltd. 13 13 Ethics in the Workplace (3 of 10) Step 1. Recognize the ethical dilemma. Step 2. Get the facts and identify your options. Step 3. Test each option: Is it legal? Is it right? Whom does it affect? Who benefits? Who gets hurt? Step 4. Decide which option to follow. Copyright ©2021 John Wiley & Sons Canada, Ltd. 14 14 7  2025-01-11 Ethics in the Workplace (4 of 10) Step 5. Double-check your ethics by asking these spotlight questions: “How will I feel if my family finds out about my decision?” “How will I feel about this if my decision is reported in the local newspaper or posted on the Internet?” “What would the person I admire most for their character and ethical judgement say about my decision?” Step 6. Take action. Copyright ©2021 John Wiley & Sons Canada, Ltd. 15 15 Ethics in the Workplace (5 of 10) Influences on Ethical Decision Making Ethical framework o Provides personal rules or strategies for ethical decision making o Includes personal values Honesty Courage Fairness Integrity Self-respect Copyright ©2021 John Wiley & Sons Canada, Ltd. 16 16 8  2025-01-11 Ethics in the Workplace (6 of 10) Influences on ethical decision-making Copyright ©2021 John Wiley & Sons Canada, Ltd. 17 17 Ethics in the Workplace (7 of 10) Kohlberg’s levels of individual moral development Copyright ©2021 John Wiley & Sons Canada, Ltd. 18 18 9  2025-01-11 Ethics in the Workplace (8 of 10) Situational Context and Ethics Intensity Ethics intensity or issue intensity o the extent to which situations are perceived to pose important ethical challenges Organization Setting The work environment and organizational culture have a strong influence on the ethics of members Copyright ©2021 John Wiley & Sons Canada, Ltd. 19 19 Ethics in the Workplace (9 of 10) External Environment, Government Regulation, and Industry Norms Laws reflect social values and define appropriate behaviour; regulations help governments monitor these behaviours and keep them within acceptable limits Copyright ©2021 John Wiley & Sons Canada, Ltd. 20 20 10  2025-01-11 Ethics in the Workplace (10 of 10) Rationalizations for unethical behaviour People often rationalize ethical transgressions with after- the-fact justifications: o Behaviour is not really illegal o Behaviour is really in everyone’s best interest o Nobody will ever find out o The organization will “protect” you Copyright ©2021 John Wiley & Sons Canada, Ltd. 21 21 Discussion 2 Are ethical dilemmas always problems, or can they also be opportunities? Copyright ©2021 John Wiley & Sons Canada, Ltd. 22 22 11  2025-01-11 Maintaining High Ethical Standards (1 of 5) Moral Management Managers behave in one of three ways Three approaches to moral management Copyright ©2021 John Wiley & Sons Canada, Ltd. 23 23 Maintaining High Ethical Standards (2 of 5) Ethics training: Structured programs that help participants to understand ethical aspects of decision-making Helps people incorporate high ethical standards into everyday behaviours Codes of Ethical Conduct Formal statements of an organization’s values and ethical principles that set expectations for behaviour Copyright ©2021 John Wiley & Sons Canada, Ltd. 24 24 12  2025-01-11 Maintaining High Ethical Standards (3 of 5) Areas often covered by codes of ethics: Organizational citizenship Illegal or improper acts Customer/coworker relationships Bribes and kickbacks Political contributions Honesty of books and records Confidentiality of corporate information Copyright ©2021 John Wiley & Sons Canada, Ltd. 25 25 Maintaining High Ethical Standards (4 of 5) Whistleblowers Expose misdeeds of others to: o Preserve ethical standards o Protect against wasteful, harmful, or illegal acts Laws protecting whistleblowers vary across jurisdictions Legal protection for whistleblowers continually tested in court Copyright ©2021 John Wiley & Sons Canada, Ltd. 26 26 13  2025-01-11 Maintaining High Ethical Standards (5 of 5) Barriers to whistleblowing include: Strict chain of command Strong work group identities Ambiguous priorities Copyright ©2021 John Wiley & Sons Canada, Ltd. 27 27 Discussion 3 Is it right for organizations to require employees to sign codes of conduct and undergo ethics training? Copyright ©2021 John Wiley & Sons Canada, Ltd. 28 28 14  2025-01-11 Social Responsibility (1 of 15) Stakeholder Management Stakeholders: persons, groups, and other organizations directly affected by the behaviour of the organization and holding a stake in its performance Stakeholder power: the capacity of the stakeholder to positively or negatively affect the operations of the organization Copyright ©2021 John Wiley & Sons Canada, Ltd. 29 29 Social Responsibility (2 of 15) Stakeholder Management Demand legitimacy: the validity and legitimacy of a stakeholder’s interest in the organization Issue urgency: the extent to which a stakeholder’s concerns need immediate attention Copyright ©2021 John Wiley & Sons Canada, Ltd. 30 30 15  2025-01-11 Social Responsibility (3 of 15) The many stakeholders of organizations Copyright ©2021 John Wiley & Sons Canada, Ltd. 31 31 Social Responsibility (4 of 15) Corporate social responsibility and governance: Looks at the way organizations behave in relation to their stakeholders Obligates organizations to act in ways that serve the interests of multiple stakeholders, including society at large Copyright ©2021 John Wiley & Sons Canada, Ltd. 32 32 16  2025-01-11 Social Responsibility (5 of 15) Stewardship Taking personal responsibility to always respect and protect the interests of all stakeholders Copyright ©2021 John Wiley & Sons Canada, Ltd. 33 33 Social Responsibility (6 of 15) Sustainability Acting in ways that support a high quality of life for present and future generations o Clean energy o Recycling o Water conservation o Waste avoidance Copyright ©2021 John Wiley & Sons Canada, Ltd. 34 34 17  2025-01-11 Social Responsibility (7 of 15) Triple bottom line evaluates organizational performance on economic, social, and environmental criteria 3 P’s of organizational performance – profit, people, and planet Copyright ©2021 John Wiley & Sons Canada, Ltd. 35 35 Social Responsibility (8 of 15) Perspectives on social responsibility: Classical view o Management’s only responsibility is to maximize profits Socioeconomic view o Management must be concerned for the broader social welfare, not just profits Copyright ©2021 John Wiley & Sons Canada, Ltd. 36 36 18  2025-01-11 Social Responsibility (9 of 15) Perspectives on social responsibility: Shared value view o Approaches business decisions with the understanding that economic and social progress are interconnected o Virtuous circle - socially responsible behaviour improves financial performance which leads to more responsible behaviour Copyright ©2021 John Wiley & Sons Canada, Ltd. 37 37 Social Responsibility (10 of 15) Arguments against social responsibility: Reduced business profits Higher business costs Dilution of business purpose Too much social power for business Lack of public accountability Copyright ©2021 John Wiley & Sons Canada, Ltd. 38 38 19  2025-01-11 Social Responsibility (11 of 15) Arguments in favor of social responsibility: Adds long-run profits Improves public image Makes organizations more attractive places to work Avoids more government regulation Businesses have resources and ethical obligation Copyright ©2021 John Wiley & Sons Canada, Ltd. 39 39 Social Responsibility (12 of 15) Four strategies of corporate social responsibility—from obstructionist to proactive behaviour Copyright ©2021 John Wiley & Sons Canada, Ltd. 40 40 20  2025-01-11 Social Responsibility (13 of 15) Corporate governance: The active oversight of the top management of an organization by a board of directors Corporate governance involves: Hiring, firing, and compensating the top executives Assessing strategy Verifying financial records Copyright ©2021 John Wiley & Sons Canada, Ltd. 41 41 Social Responsibility (14 of 15) How government influences organizations: Businesses required by law to have boards of directors that are elected by shareholders The Board will hold top management accountable for high- performance leadership Copyright ©2021 John Wiley & Sons Canada, Ltd. 42 42 21  2025-01-11 Social Responsibility (15 of 15) Ethics Self-governance in Leadership and the Managerial Role Copyright ©2021 John Wiley & Sons Canada, Ltd. 43 43 Discussion 4 What questions would you include on a social audit for an organization in your community? Copyright ©2021 John Wiley & Sons Canada, Ltd. 44 44 22  2025-01-11 Copyright Copyright © 2021 John Wiley & Sons Canada, Ltd. All rights reserved. Reproductions or translations of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein. Copyright ©2021 John Wiley & Sons Canada, Ltd. 45 45 23  2025-01-11 Introduction to Management IND300 Lecturer 4 Environment, Innovation, and Sustainability This slide deck contains animations. Please disable animations if they cause issues with your device. Copyright ©2021 John Wiley & Sons Canada, Ltd. 1 Learning Objectives 4.1 Summarize key trends in the external environment of organizations. 4.2 Discuss value creation and competitive advantage in complex environments. 4.3 Describe how organizations embrace technology and pursue innovation. 4.4 Explain the challenges of sustainability as an environmental priority. Copyright ©2021 John Wiley & Sons Canada, Ltd. 2 2 1  2025-01-11 External Environment of Organizations (1 of 2) Economic – overall health of the economy Legal-political – current and proposed laws, regulations, philosophy/objectives of political parties Socio-cultural – demographics, norms, customs, social values Technological – development, use, and availability of technology Natural environment – status and preservation of our natural resources and environmental conditions Copyright ©2021 John Wiley & Sons Canada, Ltd. 3 3 External Environment of Organizations (2 of 2) Sample elements in the general environments of organizations Copyright ©2021 John Wiley & Sons Canada, Ltd. 4 4 2  2025-01-11 The External Environment (1 of 5) Economic conditions Financial markets, inflation, income levels, and job creation Consumer spending patterns and prospects for companies Tax incentives for companies, offshoring and reshoring Copyright ©2021 John Wiley & Sons Canada, Ltd. 5 5 The External Environment (2 of 5) Legal-political conditions Regulation of banks and the financial services industry Foreign trade agreements, protection of Canadian jobs and industries, and the minimum wage International copyright and intellectual property protection, freedom of expression, and internet censorship Copyright ©2021 John Wiley & Sons Canada, Ltd. 6 6 3  2025-01-11 The External Environment (3 of 5) Sociocultural conditions Social issues relating to educational opportunity, social network connections, access to technology, mentoring, job options Income inequality, employment discrimination, and racial injustice Norms, human rights, demographics, and social values Gender identity, expression, and inclusion of visible minorities Generational cohorts – people born within a few years of one another and who experience somewhat similar life events during their formative years Copyright ©2021 John Wiley & Sons Canada, Ltd. 7 7 The External Environment (4 of 5) Technological conditions Social media spending on product promotions Reputation management and internal communication Employee networking and data sharing, virtual meetings, and the remote office The continual penetration of technology into every day life Copyright ©2021 John Wiley & Sons Canada, Ltd. 8 8 4  2025-01-11 The External Environment (5 of 5) Natural environment conditions Nuclear plant failure, major oil spill, enormous hurricane “carbon neutral,” ”green,” “sustainable” concerns Protecting natural resources and preserving them for future generations Toxic waste, global warming, and fossil fuel consumption Copyright ©2021 John Wiley & Sons Canada, Ltd. 9 9 Discussion 1 If the interests of a business firm’s owners and investors conflict with those of the community, which stakeholder gets preference? What situational factors influence whose interests take precedence? Copyright ©2021 John Wiley & Sons Canada, Ltd. 10 10 5  2025-01-11 Environment and Value Creation (1 of 4) The specific (task) environment – actual organizations, groups, and persons with whom an organization interacts and conducts business Includes important stakeholders such as: o Customers o Employees o Suppliers o Competitors o Regulators o Owners Copyright ©2021 John Wiley & Sons Canada, Ltd. 11 11 Environment and Value Creation (2 of 4) The multiple stakeholders of an organization Copyright ©2021 John Wiley & Sons Canada, Ltd. 12 12 6  2025-01-11 Environment and Value Creation (3 of 4) Competitive advantage Something an organization does extremely well, is difficult to copy, and gives it an advantage over competitors in the marketplace Companies may achieve competitive advantage in many ways, including: o Costs o Quality o Delivery o Flexibility Copyright ©2021 John Wiley & Sons Canada, Ltd. 13 13 Environment and Value Creation (4 of 4) Environmental uncertainty A lack of complete information regarding what exists and what developments may occur in the environment Two dimensions of the environmental uncertainty Degree of complexity – the number of factors present in the environment Rate of change – are these factors stable or dynamic? Copyright ©2021 John Wiley & Sons Canada, Ltd. 14 14 7  2025-01-11 External Environments Dimensions of uncertainty in the external environments of organizations Copyright ©2021 John Wiley & Sons Canada, Ltd. 15 15 Discussion 2 Which of the two or three retail stores that you shop at weekly has the strongest competitive advantage and why? Copyright Copyright ©2017 ©2021 JohnJohn Wiley Wiley & Sons, & Sons Inc. Ltd. Canada, 1616 16 8  2025-01-11 Environment and Innovation (1 of 4) Innovation – process of putting new ideas into practice Business innovations Product innovation – creation of new or improved products Process innovation – better ways of ding things Business model innovation – new ways of making money Copyright ©2021 John Wiley & Sons Canada, Ltd. 17 17 Environment and Innovation (2 of 4) Social business innovations – find ways to use business models to address important social problems; focus on critical social issues Copyright ©2021 John Wiley & Sons Canada, Ltd. 18 18 9  2025-01-11 Environment and Innovation (3 of 4) The innovation process: Step 1: Imagining – thinking about new possibilities Step 2: Designing – building initial models, prototypes, samples Step 3: Experimenting – examining practicality Step 4: Assessing – identifying strengths/weaknesses Step 5: Scaling – implementing what’s learned Reverse innovation – innovation can come from lower levels in the organization and from diverse settings or locations Copyright ©2021 John Wiley & Sons Canada, Ltd. 19 19 Environment and Innovation (4 of 4) Disruptive innovation – creates products/ services that become so widely used that they largely replace prior practices and competitors Cellular phones that disrupted traditional landlines MP3 players that disrupted CDs and cassettes Copyright ©2021 John Wiley & Sons Canada, Ltd. 20 20 10  2025-01-11 Discussion 3 Housing for the homeless is a problem in many communities. In what way might this problem be addressed through some form of social business innovation? Copyright ©2021 John Wiley & Sons Canada, Ltd. 21 21 Environment and Sustainability (1 of 6) Sustainability – commitment to protect the rights of present and future generations as co-stakeholders of the world’s resources Copyright ©2021 John Wiley & Sons Canada, Ltd. 22 22 11  2025-01-11 Environment and Sustainability (2 of 6) Sustainable development makes use of environmental resources to support societal needs today while also preserving and protecting them for future generations Copyright ©2021 John Wiley & Sons Canada, Ltd. 23 23 Environment and Sustainability (3 of 6) Environmental capital – natural resources used to sustain life and produce goods and services for society Atmosphere Land Water Minerals Copyright ©2021 John Wiley & Sons Canada, Ltd. 24 24 12  2025-01-11 Environment and Sustainability (4 of 6) Triple Bottom Line: Three P’s of organizational performance Profit People Planet Copyright ©2021 John Wiley & Sons Canada, Ltd. 25 25 Environment and Sustainability (5 of 6) Sustainable business – operates in ways that meet the needs of consumers while protecting and preserving the environment Sustainable/ green innovations – help reduce an organization’s negative impact; enhance positive impact on the natural environment Copyright ©2021 John Wiley & Sons Canada, Ltd. 26 26 13  2025-01-11 Environment and Sustainability (6 of 6) Human Sustainability – concern for the effect of management practices on employee physical and psychological well-being Health and wellness programs Stress management Minimizing work-family conflict Providing control over work Fair wages and equal opportunities Copyright ©2021 John Wiley & Sons Canada, Ltd. 27 27 Discussion 4 When the costs of pursuing sustainability goals reduce business profits, which stakeholder interests should take priority, business owners or society at large? Where do you think the balance between profits and sustainability should naturally emerge? Copyright ©2021 John Wiley & Sons Canada, Ltd. 28 28 14  2025-01-11 Copyright Copyright © 2021 John Wiley & Sons Canada, Ltd. All rights reserved. Reproductions or translations of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein. Copyright ©2021 John Wiley & Sons Canada, Ltd. 29 29 15  2025-01-11 Introduction of Management IND300 Lecture 5 Global Management and Cultural Diversity This slide deck contains animations. Please disable animations if they cause issues with your device. Copyright ©2021 John Wiley & Sons Canada, Ltd. 1 Learning Objectives 5.1 Discuss the implications of globalization for management and organizations. 5.2 Describe global corporations and the issues they face and create. 5.3 Define culture and identify ways to describe diversity in global cultures. 5.4 Identify the benefits of global learning for management and organizations. Copyright ©2021 John Wiley & Sons Canada, Ltd. 2 2 1  2025-01-11 Management and Globalization (1 of 18) Key concepts in the challenges of globalization: Global economy Globalization World 3.0 Global management Global manager Copyright ©2021 John Wiley & Sons Canada, Ltd. 3 3 Management and Globalization (2 of 18) Global economy Resources, supplies, product markets, and competition are worldwide in scope Globalization The growing interdependence among elements in the global economy World 3.0 Balancing cooperation in the global economy with national identities and interests Copyright ©2021 John Wiley & Sons Canada, Ltd. 4 4 2  2025-01-11 Management and Globalization (3 of 18) Global management Managing business and organizations with interests in more than one country Global manager Has global perspective, and is culturally aware and informed on current international affairs Copyright ©2021 John Wiley & Sons Canada, Ltd. 5 5 Management and Globalization (4 of 18) International businesses Conducting for-profit transactions of goods and services across national boundaries Reasons why businesses go global: Profits Customers Suppliers Labour Capital Risk Copyright ©2021 John Wiley & Sons Canada, Ltd. 6 6 3  2025-01-11 Management and Globalization (5 of 18) Market entry strategies involve the sale of goods or services to foreign markets but do not require expensive investments Copyright ©2021 John Wiley & Sons Canada, Ltd. 7 7 Management and Globalization (6 of 18) Types of market entry strategies: Global sourcing Exporting Importing Licensing agreement Franchising Copyright ©2021 John Wiley & Sons Canada, Ltd. 8 8 4  2025-01-11 Management and Globalization (7 of 18) Types of direct investment strategies: Strategic alliance Joint venture Wholly owned subsidiary Copyright ©2021 John Wiley & Sons Canada, Ltd. 9 9 Management and Globalization (8 of 18) Common forms of global business Copyright ©2021 John Wiley & Sons Canada, Ltd. 10 10 5  2025-01-11 Management and Globalization (9 of 18) How Companies Go Global: Global Sourcing the process of purchasing materials, manufacturing components, or locating business services around the world Exporting selling locally made products in foreign markets Importing buying foreign-made products and selling them domestically Copyright ©2021 John Wiley & Sons Canada, Ltd. 11 11 Management and Globalization (10 of 18) How Companies Go Global: Licensing Agreement one firm pays fee for rights to make or sell another company’s products Franchising a fee is paid for rights to use another firm’s name, branding, and methods Copyright ©2021 John Wiley & Sons Canada, Ltd. 12 12 6  2025-01-11 Management and Globalization (11 of 18) Foreign direct investment involves setting up and buying all or part of a business in another country. Insourcing refers to local job creation that results from foreign direct investment. Copyright ©2021 John Wiley & Sons Canada, Ltd. 13 13 Management and Globalization (12 of 18) Types of insourcing: Joint ventures: operate in a foreign country through co- ownership by foreign and local partners Strategic alliances: a partnership in which foreign and domestic firms share resources and knowledge for mutual gains Foreign subsidiaries: local operation completely owned by a foreign firm Copyright ©2021 John Wiley & Sons Canada, Ltd. 14 14 7  2025-01-11 Management and Globalization (13 of 18) Criteria for choosing a joint venture partner: Familiarity with your firm’s major business Strong local workforce Values its customers Future expansion possibilities Strong local market for partner’s own products Good profit potential Sound financial standing Copyright ©2021 John Wiley & Sons Canada, Ltd. 15 15 Management and Globalization (14 of 18) Global business environments Legal and political systems Trade agreements and trade barriers Regional economic alliances Copyright ©2021 John Wiley & Sons Canada, Ltd. 16 16 8  2025-01-11 Management and Globalization (15 of 18) Legal and political systems Differing laws and practices regarding o Business ownership o Negotiation and implementation of contracts o Foreign currency exchange o Protection of intellectual property rights Counterfeit merchandise Copyright ©2021 John Wiley & Sons Canada, Ltd. 17 17 Management and Globalization (16 of 18) Legal and political systems Political risk o Potential loss in value or control of a foreign investment due to instability and political changes in the host country Political risk analysis o Forecast political disruptions that threaten the security of a foreign investment Copyright ©2021 John Wiley & Sons Canada, Ltd. 18 18 9  2025-01-11 Management and Globalization (17 of 18) Trade Agreements and Trade Barriers World Trade Organization (WTO) deals with issues about o Most favoured nation status o Tariffs o Non-tariff barriers o Protectionism Copyright ©2021 John Wiley & Sons Canada, Ltd. 19 19 Management and Globalization (18 of 18) Regional Economic Alliances NAFTA or USMCA – North American Free Trade Agreement (United States-Mexico-Canada Agreement) EU – European Union (Recent departure of the UK) APEC – Asia Pacific Economic Cooperation ASEAN – Association of Southeast Asian Nations SADC – Southern Africa Development Community TPP11 – Trans-Pacific Partnership (includes 11 countries) Copyright ©2021 John Wiley & Sons Canada, Ltd. 20 20 10  2025-01-11 Discussion 1 What aspects of the Canadian legal-political environment could prove difficult for a Chinese firm setting up a factory in Canada? Copyright ©2021 John Wiley & Sons Canada, Ltd. 21 21 Global Businesses (1 of 8) Types of global businesses: Global corporation o MNE (multinational enterprise) or MNC (multinational corporation) with extensive business operations in many foreign countries Transnational corporation o A global corporation that operates worldwide on a borderless basis, without being identified to one national home Copyright ©2021 John Wiley & Sons Canada, Ltd. 22 22 11  2025-01-11 Global Businesses (2 of 8) Mutual benefits for host country and global corporation or MNC: Shared growth opportunities Shared income opportunities Shared learning opportunities Shared development opportunities Copyright ©2021 John Wiley & Sons Canada, Ltd. 23 23 Global Businesses (3 of 8) What should go right and what can go wrong in global corporation and host-country relationships Copyright ©2021 John Wiley & Sons Canada, Ltd. 24 24 12  2025-01-11 Global Businesses (4 of 8) Host country complaints about MNCs: Excessive profits Domination of local economy Interference with local government Hiring the best local talent Limited technology transfer Disrespect for local customs Copyright ©2021 John Wiley & Sons Canada, Ltd. 25 25 Global Businesses (5 of 8) MNC complaints about host countries: Profit limitations Overpriced resources Exploitative rules Foreign exchange restrictions Failure to uphold contracts Copyright ©2021 John Wiley & Sons Canada, Ltd. 26 26 13  2025-01-11 Global Businesses (6 of 8) Ethical challenges for Global Businesses: Corruption Child labour Sweatshops Conflict minerals Copyright ©2021 John Wiley & Sons Canada, Ltd. 27 27 Global Businesses (7 of 8) Ethical issues for Global Businesses: Corruption – illegal practices that further one’s business interests Corruption of Foreign Public Officials Act (CFPOA) – makes it illegal for Canadian firms and their representatives to engage in corrupt practices overseas o Bribes to foreign officials o Excessive commissions o Non-monetary gifts Copyright ©2021 John Wiley & Sons Canada, Ltd. 28 28 14  2025-01-11 Global Businesses (8 of 8) Child labour, Sweatshops, and Conflict Minerals: Child labour – employment of children for work otherwise done by adults Sweatshops – employment of workers at very low wages for long hours in poor working conditions Conflict Minerals – gains from sale of minerals used to help finance armed violence (such as in the DRC) Copyright ©2021 John Wiley & Sons Canada, Ltd. 29 29 Discussion 2 Is the Corruption of Foreign Public Officials Act unfair to Canadian firms trying to compete for business around the world? Copyright ©2021 John Wiley & Sons Canada, Ltd. 30 30 15  2025-01-11 Cultures and Global Diversity (1 of 11) Culture The shared set of beliefs, values, and patterns of behavior common to a group of people Culture shock Confusion and discomfort a person experiences in an unfamiliar culture Copyright ©2021 John Wiley & Sons Canada, Ltd. 31 31 Cultures and Global Diversity (2 of 11) Cultural intelligence The ability to adapt and adjust to new cultures Ethnocentrism Tendency to consider one’s own culture as superior to others Copyright ©2021 John Wiley & Sons Canada, Ltd. 32 32 16  2025-01-11 Cultures and Global Diversity (3 of 11) Stages in adjusting to a new culture: Confusion Small victories The honeymoon Irritation and anger Reality Copyright ©2021 John Wiley & Sons Canada, Ltd. 33 33 Cultures and Global Diversity (4 of 11) Silent languages of culture: Context o Low context o High context Space o Proxemics Time o Monochronic o Polychronic Copyright ©2021 John Wiley & Sons Canada, Ltd. 34 34 17  2025-01-11 Cultures and Global Diversity (5 of 11) Context Low context cultures - emphasize communication via spoken or written words o United States o Canada o Germany Copyright ©2021 John Wiley & Sons Canada, Ltd. 35 35 Cultures and Global Diversity (6 of 11) Context High context cultures – rely on nonverbal and situational cues as well as on spoken or written words o Thailand o Malaysia Copyright ©2021 John Wiley & Sons Canada, Ltd. 36 36