Reviewer (Lesson 1-6) PDF

Because learning changes everything. ® CHAPTER 1 The Exceptional Manager What You Do, How You Do It © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. ©Olivier Renck/ Getty Images No reproduction or further distribution permitt...

Because learning changes everything. ® CHAPTER 1 The Exceptional Manager What You Do, How You Do It © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. ©Olivier Renck/ Getty Images No reproduction or further distribution permitted without the prior written consent of McGraw Hill.  LEARNING OBJECTIVES 1-1 Identify the rewards of being an exceptional manager. 1-2 List the four principle functions of a manager. 1-3 Describe the levels and areas of management. 1-4 Identify the roles an effective manager must play. 1-5 Discuss the skills of an outstanding manager. 1-6 Identify the seven challenges faced by most managers. 1-7 Define the core competencies, knowledge, soft skills, attitudes, and other characteristics needed for career readiness and discuss how they can be developed. 1-8 Describe the process for managing your career readiness. © McGraw Hill  USING MANAGEMENT SKILLS FOR COLLEGE SUCCESS 1. Functions of management. 2. Applying the functions of management to school projects. 3. Applying the functions of management in your personal life. © McGraw Hill  MANAGEMENT: WHAT IT IS, WHAT ITS BENEFITS ARE The Rise of a Leader Key to Career Growth: “Doing Things I’ve Never Done Before” The Art of Management Defined Why Organizations Value Managers: The Multiplier Effect What Are the Rewards of Studying and Practicing Management? © McGraw Hill  THE RISE OF A LEADER General Motors CEO Mary Barra - has an enthusiasm for cars. Is passion necessary for managerial success? © McGraw Hill Mark Lennihan/AP Images  KEY TO CAREER GROWTH: “DOING THINGS I’VE NEVER DONE BEFORE” Jeff Bezos, founder of Amazon, left Wall Street to start Amazon from his basement. © McGraw Hill  THE ART OF MANAGEMENT DEFINED Being an exceptional manager is an art that can be learned. Management is the art of getting things done through people. Managers are task-oriented, achievement-oriented, and people-oriented. Good managers are concerned with trying to achieve both efficiency and effectiveness. Management is defined as the pursuit of organizational goals efficiently and effectively by integrating the work of people through planning, organizing, leading, and controlling the organization’s resources. © McGraw Hill  What Is Management? 3 0PCA The people responsible for supervising the use of an organization’s resources to meet its goals. Resources: People, skills, know-how, experience, machinery, raw materials, computers and IT, financial capital, patents, loyal customers and employees. © McGraw Hill Sam Edwards/age fotostock  What Is Management? 3 Organizations. Collections of people who work together and coordinate their actions to achieve a wide variety of goals. © McGraw Hill 9  Achieving High Performance Organizational Performance. A measure of how efficiently and effectively managers use available resources to satisfy customers and achieve organizational goals. © McGraw Hill  Organizational Performance Efficiency A measure of how productively resources are used to achieve a goal. © McGraw Hill 11  WHY ORGANIZATIONS VALUE MANAGERS: THE MULTIPLIER EFFECT As a manager you have a multiplier effect: Your influence on the Good managers organization is create value. multiplied far beyond the results that can be achieved by just one person acting alone. © McGraw Hill  WHAT ARE THE REWARDS OF STUDYING MANAGEMENT? The rewards of studying management include: You will have an insider’s understanding of how to deal with organizations from the outside. You will know from experience how to relate to your supervisors. You will better interact with co-workers. You will be able to manage yourself and your career. You might make more money during your career © McGraw Hill  WHAT ARE THE REWARDS OF PRACTICING MANAGEMENT? The rewards of practicing management include: You and your employees can experience a sense of accomplishment. You can stretch your abilities and magnify your range. You can build a catalog of successful products or services. © McGraw Hill  WHAT MANAGERS DO: THE FOUR PRINCIPAL FUNCTIONS Planning Organizing Leading Controlling © McGraw Hill  WHAT MANAGERS DO: THE FOUR PRINCIPAL FUNCTIONS Planning Process of identifying and selecting appropriate goals and courses of action. Steps in the Planning Process: 1. Decide which goals to pursue. 2. Decide what strategies to adopt to attain those goals. 3. Decide how to allocate organizational resources to pursue strategies that attain those goals. © McGraw Hill 16  WHAT MANAGERS DO: THE FOUR PRINCIPAL FUNCTIONS Organizing Structuring working relationships in a way that allows organizational members to work together to achieve organizational goals. Organizational Structure - a formal system of task and reporting relationships that coordinates and motivates organizational members so that they work together to achieve organizational goals © McGraw Hill 17  WHAT MANAGERS DO: THE FOUR PRINCIPAL FUNCTIONS Leading Articulating a clear vision and energizing and enabling organizational members so they understand the part they play in achieving organizational goals. © McGraw Hill 18  WHAT MANAGERS DO: THE FOUR PRINCIPAL FUNCTIONS Controlling Evaluating how well an organization is achieving its goals and taking action to maintain or improve performance. © McGraw Hill 19  THE MANAGEMENT PROCESS Figure 1.1: The Management Process Access the text alternative for these images. © McGraw Hill  LEVELS OF MANAGEMENT Levels of Managers © McGraw Hill  Levels...... First-Line Managers Responsible for the daily supervision of nonmanagerial employees and make short-term operating decisions. Middle Managers Supervise first-line managers. Responsible for finding the best way to use resources to achieve organizational goals and implement the policies and plans of the top managers above them. Top Managers Establish organizational goals, decide how departments should interact, and monitor the performance of middle managers and make long-term decisions Levels of Managers © McGraw Hill  AREAS OF MANAGEMENT: FUNCTIONAL MANAGERS VERSUS GENERAL MANAGERS Functional managers are responsible for just one organizational activity (Vice President of Production, Director of Finance, or Administrator for Human Resources) General managers are responsible for several organizational activities. © McGraw Hill D Dipasupil/Getty Image  MANAGERS FOR THREE TYPES OF ORGANIZATIONS For-profit organizations -making money (profits) by offering products or services Nonprofit organizations- offering services to some clients, not to make a profit (for example, hospitals, colleges, social-welfare agencies). Mutual-benefit organizations- aiding members in order to advance their interests (for example, political parties, farm cooperatives, labor unions, trade associations, clubs) © McGraw Hill  DIFFERENT ORGANIZATIONS, DIFFERENT MANAGEMENT? Generally you would be performing the four management functions of planning, organizing, leading, and controlling, regardless of the type of organization. The measures of success is the single biggest difference. © McGraw Hill  Measures of Success In a for-profit organization, the measure of success is how much profit (or loss) it generates. In the other two types of organizations, although income and expenditures are very important concerns, the measure of success is usually the effectiveness of the services delivered. © McGraw Hill 26  ROLES MANAGERS MUST PLAY SUCCESSFULLY Three Types of The Manager’s Managerial Roles: Roles: How Do Managers Spend Interpersonal Their Time? Informational Decisional © McGraw Hill  THE MANAGER’S ROLES: HOW DO MANAGERS SPEND THEIR TIME? Managers are always working, and they are in constant demand. Today’s managers work an average of 9.7 hours each weekday True “breaks” are rare, with most working at least a couple of hours on 79% of their weekend days and 70% of their vacation days Managers spend virtually all of their work time communicating with others. Managers must be purposeful and proactive about managing their time. © McGraw Hill  THREE TYPES OF MANAGERIAL ROLES: INTERPERSONAL, INFORMATIONAL, AND DECISIONAL Interpersonal roles: managers interact with people inside and outside their work units Figurehead, Leader, and Liaison Informational roles: managers receive and communicate information Monitor, Disseminator, and Spokesperson Decisional roles: managers use information to make decisions to solve problems or take advantage of opportunities Entrepreneur, Disturbance Handler, Resource Allocator, and Negotiator © McGraw Hill Relative Amount of Time That Managers Spend on the Four Managerial Functions © McGraw Hill  THE SKILLS EXCEPTIONAL MANAGERS NEED Technical Skills: the ability to perform a specific job Conceptual Skills: And additional The ability to think analytically and to visualize an valued traits in organization as a whole and managers. understand how the parts work together Human Skills: “Soft Skills,” the ability to interact well with people © McGraw Hill  TECHNICAL SKILLS Having the requisite technical skills seems to be most important at the lower levels of management—that is, among employees in their first professional job and first-line managers. © McGraw Hill  CONCEPTUAL SKILLS Conceptual skills are more important as you move up the management ladder, particularly for top managers, who must deal with problems that are ambiguous but that could have far-reaching consequences. © McGraw Hill  HUMAN SKILLS The most difficult set of skills to master but which are especially important with people in teams, an important part of today’s organizations. © McGraw Hill  THE MOST VALUABLE TRAITS IN MANAGERS Among the chief skills companies seek in top managers are the following: The ability to motivate and engage others The ability to communicate Work experience outside the country High energy levels to meet the demands of global travel and a 24/7 world © McGraw Hill  SEVEN CHALLENGES TO BEING AN EXCEPTIONAL MANAGER Challenge #1: Managing for Competitive Advantage—Staying Ahead of Rivals Challenge #2: Managing for Technological Advances—Dealing with the “New Normal” Challenge #3: Managing for Inclusion and Diversity—The Future Won’t Resemble the Past Challenge #4: Managing for Globalization—The Expanding Management Universe © McGraw Hill  Seven…. Challenge #5: Managing for Ethical Standards Challenge #6: Managing for Sustainable Development—The Business of Green Challenge #7: Managing for Happiness and Meaningfulness © McGraw Hill  CHALLENGE #1: MANAGING FOR COMPETITIVE ADVANTAGE— STAYING AHEAD OF RIVALS Organizations must stay ahead in four areas: Being responsive to customers- The first law of business is: take care of the customer. Innovation- “Innovate or die” is an important adage for any manager Quality- If another organization comes along and offers a better product or service, you may find your company falling behind. Efficiency- Companies strive to produce goods or services as quickly as possible using as few employees (and raw materials) as possible. © McGraw Hill  CHALLENGE #2: MANAGING FOR TECHNOLOGICAL ADVANCES– DEALING WITH THE NEW NORMAL Ecommerce: the buying and selling of goods or services over computer networks Far-ranging electronic management all of the time. Data, data, and more data: a challenge to decision making The rise of artificial intelligence: more automation in the workforce Organizational changes: shifts in structure, jobs, goals, and management Knowledge management and collaborative computing © McGraw Hill  CHALLENGE #3: MANAGING FOR INCLUSION AND DIVERSITY— THE FUTURE WON’T RESEMBLE THE PAST In the coming years there will be a different mix of women, immigrants, and older people in the general population, as well as in the workforce. Some scholars think that diversity and variety in staffing produce organizational strength. Clearly, however, the challenge to the manager of the near future is to maximize the contributions of employees diverse in gender, age, race, ethnicity, and sexual orientation. © McGraw Hill This Photo by Unknown Author is licensed under CC BY-SA-NC  CHALLENGE #4: MANAGING FOR GLOBALIZATION—THE EXPANDING MANAGEMENT UNIVERSE Verbal expressions and gestures don’t mean the same thing to everyone around the world. Failure to understand cultural differences can affect organizations’ ability to manage globally. Globalization is the increasingly interconnected nature of business around the world. Managing for globalization will be a complex, ongoing challenge. © McGraw Hill  CHALLENGE #5: MANAGING FOR ETHICAL STANDARDS Recent incidents point to serious repercussions when people fail to realize that ethical standards must be followed in every area of life. Ethical lapses have the potential to do great harm, and not only financial harm. © McGraw Hill  CHALLENGE #6: MANAGING FOR SUSTAINABLE DEVELOPMENT—THE BUSINESS OF GREEN Our economic system has brought prosperity but in doing so has often assumed an unlimited supply of natural resources. We now believe some of the actions and decisions of the past have caused irreversible damage to the environment. The United Nations addressed these issues by adopting a set of 17 Sustainable Development Goals. Clearly sustainable development is a critical issue facing businesses today. © McGraw Hill  CHALLENGE #7: MANAGING FOR HAPPINESS AND MEANINGFULNESS Research shows that a sense of meaningfulness in your life is associated with better health, work and life satisfaction, and performance. Build meaning into your life by: Identifying activities you love doing Finding a way to build your natural strengths into your personal and work life Going out and helping someone © McGraw Hill  FIGURE 1.4 MODEL OF CAREER READINESS Access text description for images. © McGraw Hill  DEVELOPING CAREER READINESS Build self-awareness- you need to make an accurate evaluation of your strengths and developmental opportunities: Learn from educational activities- Proactive learning orientation is the desire to learn and improve your knowledge, soft skills, and other characteristics in pursuit of personal development. Model others possessing the targeted competencies- Identify role models or mentors who possess the skills or traits you need and then interview them © McGraw Hill  DEVELOPING CAREER READINESS DEVELOPING CAREER READINESS Learn from on-the-job activities-Seek new assignments that require you to use one of your targeted competencies and volunteer for special projects or committees Seek experience from student groups and organizations - join student groups and seek leadership positions Experiment- identify new behaviors you want to master and then practice them © McGraw Hill  MANAGING YOUR CAREER READINESS Three keys to success. 1. It’s your responsibility to manage your career. Don’t count on others. 2. Personal reflection, motivation, commitment, and experimentation are essential. 3. Success is achieved by following a process. © McGraw Hill  STEPS FOR DEVELOPING CAREER READINESS STEP 1: Examine the list of career readiness competencies and pick two or three that impact your current performance. STEP 2: Consider how you can use material from the text to develop your targeted career readiness competencies. STEP 3: Experiment with small steps aimed at developing your targeted career readiness competencies. STEP 4: Evaluate what happened during your small-step experiments. © McGraw Hill  A PROCESS FOR DEVELOPING CAREER READINESS Figure 1.5 Process for managing career readiness. Kinicki and Associates, Inc. 2022 Access text descriptions for images. © McGraw Hill  MAKE IT A HABIT A simple way to approach the task of managing your career readiness: Make it a habit. Identify something specific you want to accomplish- Be sure to choose something that excites you Identify a simple, tiny change you can implement - You should plan to make incremental progress toward your desired outcome through a series of tiny, simple changes © McGraw Hill  End of Main Content Because learning changes everything. ® www.mheducation.com © 2020 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.  The Manager’s Changing Work Environment & Ethical Responsibilities Doing the Right Thing Chapter 2 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.  Major Questions You Should Be Able to Answer 3.1 Is profit the only important goal of a business? 3.2 Who are the stakeholders important to me inside the organization? 3.3 Who are stakeholders important to me outside the organization? 3.4 What does the successful manager need to know about ethics and values? 3.5 Is being socially responsible really necessary? 3.6 How can I trust a company is doing the right thing? © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-2  The Triple Bottom Line: People, Planet, & Profit Triple bottom line Social audit representing People, a systematic assessment Planet, and Profit (the 3 of a company’s Ps) performance in measures an implementing socially organization’s social, responsible programs environmental, and often based on financial performance predefined goals © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.  YOUNGER WORKERS’ SEARCH FOR MEANING Millennials (born between 1981 and 1996) and Gen Zers (born after 1997) care about the triple bottom line. Younger workers expect more from the organizations they work for and do business with. These generations want things like meaningful work and products that represent their personal values more than older generations ever did.  The Community of Stakeholders Inside the Organization  Stakeholders the people whose interests are affected by an organization’s activities they include internal, external © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-5 Stakeholders  Internal Stakeholders Internal stakeholders consist of employees, owners, and the board of directors Owners- consist of all those who can claim it as their legal property (i.e. stockholders) Board of Directors – members are elected by the stockholders to see that the company is being run according to their interests © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-7  The Community of Stakeholders Outside the Organization  External stakeholders people or groups in the organization’s external environment that are affected by it The external environment consists of task environment and the general environment © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-8  The General Environment Figure 3.1 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-9  THE GENERAL ENVIRONMENT The general environment includes six forces: economic, technological, sociocultural, demographic, political–legal, and international. You may be able to control some forces in the task environment, but you can’t control those in the general environment. As a manager you need to keep your eye on the far horizon because these forces of the general environment can affect long-term plans and decisions.  Example: Amazon.com and the Customer Experience Jeff Bezos, founder and CEO of Amazon.com is obsessed with customer service Believes that company’s success is driven by the customer experience © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-11  THE TASK ENVIRONMENT Task Customers environment Competitors consists of 10 Suppliers groups that Distributors interact with Strategic Allies the Employee Organizations organization on Local Communities a regular basis. Financial Institutions Government Regulators Special-Interest Groups  The Task Environment Supplier A person or organization that provides raw materials, services, equipment, labor or energy to other organizations © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-13  The Task Environment  Distributor a person or organization that helps another organization sell its goods and services to customers Ex. Ticketmaster © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-14  The Task Environment  Strategic allies describes the relationship of two organizations who join forces to achieve advantages neither can perform as well alone (i.e. Hewlett Packard and Hitachi creating an Internet-Based Electronic Securities/Commodities Exchange System Solution) © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-15  The Task Environment  Employee Organizations: Labor Unions & Associations - are usually associated with hourly employees and professional associations usually represent salaried workers © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-16  The Task Environment  Local Communities -rely on companies for jobs, for tax revenues, for financial support, and so on  Clawbacks Rescinding the tax breaks when firms don’t deliver promised jobs © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 17  The Task Environment  Financial Institutions - like commercial banks, investment banks, and insurance companies  Crowdfunding is a new kind of financing by raising money for a project or venture by obtaining many small amounts of money from many people (“the crowd”)  Mass Media - is a powerful disseminator of both positive and negative news about companies © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 18  Example: Managing the Media: What’s the Best Practice for Handling Product Recalls?  The gold standard in brand crisis management is the path followed by health products company Johnson & Johnson in 1982, after several consumers died from taking tainted Tylenol pills.  “Communicate clearly with the public about a crisis, cooperate with government officials, swiftly begin its own investigation of a problem, and, if necessary, quickly institute a product recall.” © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 19  The Task Environment  Government regulators regulatory agencies that establish ground rules under which organizations may operate they affect the activities of your organization, they in turn are affected by it. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-20  The Task Environment  Special interest groups groups whose members try to influence specific issues, some of which may affect your organization (i.e. animal rights groups) © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-21  The General Environment  The general environment includes six forces: economic, technological, sociocultural, demographic, political–legal, and international.  You may be able to control some forces in the task environment, but you can’t control those in the general environment.  As a manager you need to keep your eye on the far horizon because these forces of the general environment can affect long-term plans and decisions. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 22  The General Environment  Economic forces consist of the general economic conditions and trends – unemployment, inflation, interest rates, economic growth – that may affect an organization’s performance © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-23  The General Environment Technological forces new developments in methods for transforming resources into goods and services The use of Artificial Intelligence © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-24  The General Environment  Sociocultural forces Influences and trends originating in a country’s, a society’s, or a culture’s human relationships and values that may affect an organization © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-25  The General Environment  Demographic forces influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-26  The General Environment  Political-Legal forces changes in the way politics shape laws and laws shape the opportunities for and threats to an organization © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-27  The General Environment  International forces changes in the economic, political, legal, and technological global system that may affect an organization © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-28  The Ethical Responsibilities Required of You as a Manager Ethical standards may vary among countries and among cultures. Six most common workplace behaviors that are considered ethical misconduct:  Conflicts of interest  Abusive behaviors  Violations of health and safety regulations  Corruption  Discrimination  Sexual harassment  Values and value systems are the underpinnings for ethics and ethical behavior. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 29  The Ethical Responsibilities Required of You as a Manager Ethical dilemma situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-30  Four Approaches to Deciding Ethical Dilemmas Utilitarian Individual guided by what will guided by what will result in the greatest result in the good for the greatest individual’s best long number of people term interest, which ultimately are in everyone’s self- interest © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-31  Four Approaches to Deciding Ethical Dilemmas Moral-rights Justice guided by respect for guided by respect for the fundamental impartial standards rights of human of fairness and equity beings © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-32  Defining Ethics & Values  Ethics standards of right and wrong that influence behavior  Values relatively permanent and deeply held underlying beliefs and attitudes that help determine a person’s behavior © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-33  COST of CORRUPTION (Legal Briefcase) Madoff Investment Securities: Bernie Madoff is serving 150 years behind bars after running his exclusive wealth management firm as a gigantic Ponzi scheme. Enron: Jeffery Skilling is serving a 24 year sentence for accounting fraud while Richard Causey, who pled guilty, Has been released in October 2011. Former CEO, Kenneth Lay, died before sentencing. WorldCom: Former CEO, Bernie Ebbers, was convicted of fraud, conspiracy and false filings and sentenced to 25 years. 4-34  WHAT is a PONZI SCHEME? A fraud by paying returns to existing investors from funds contributed by new investors. New investors are promised opportunities claimed to generate high returns with little or no risk. Fraudsters focus on attracting new money to make promised payments. Source: Securities and Exchange Commission, www.sec.gov, accessed June 2011. 4-35  Values Organizations may have two value systems that conflict: 1. The value system stressing financial performance versus 2. the value system stressing cohesion and solidarity in employee relationships © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-36  The Sarbanes–Oxley Reform Act Sarbanes-Oxley of 2002 (US Law) Executives’ deceits generated a great deal of public outrage, and as a result Congress passed the Sarbanes-Oxley Act. Often shortened to SarbOx or SOX, established requirements for proper financial record keeping for public companies and penalties of as much as 25 years in prison for noncompliance © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-37  How Do People Learn Ethics? Kohlberg’s Theories  Level 1, preconventional – follows rules to avoid unpleasant consequences.  Level 2, conventional – follows expectations of others, are conformist, and lead by encouragement and cooperation. Most managers are at this level.  Level 3, postconventional – guided by internal values and standards, focusing on the needs of their employees and trying to lead by empowering them. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-38  How Organizations Can Promote Ethics 1. Creating of a strong ethical climate 2. Screening prospective employees 3. Instituting ethics codes and training programs 4. Rewarding ethical behavior: Protecting whistle-blowers © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-39  Rewarding Ethical Behavior: Protecting Whistle-Blowers  Whistle-blower an employee, or even an outside consultant, who reports organizational misconduct to the public, such as health and safety matters, waste, corruption, or overcharging of customers © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-40  A Famous Whistleblower in the Philippines Janet Napoles has been linked with an alleged misuse of PDAF (she exposed the PDAF Scam) , together with Philippine Senators Bong Revilla, Jinggoy Estrada, Juan Ponce Enrile, and other congressmen © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 41  The Social Responsibilities Required of You as a Manager  Social responsibility manager’s duty to take actions that will benefit the interests of society as well as of the organization social responsibility focuses on being a good organizational citizen  The Social Responsibilities Required of You as a Manager  Corporate social responsibility notion that corporations are expected to go above and beyond following the law and making a profit Paul Samuelson suggests that firms need to be concerned for the welfare of society as well as corporate profits Samuelson claims that since firms create problems like pollution, they should help solve them  The Social Responsibilities Required of You as a Manager CSR is a commitment to improve community well- being through business practices and contributions of corporate resources. It is the attempt by companies to meet the economic, legal, ethical, and philanthropic demands of a given society at a particular point in time. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 44  Why do corporations have social responsibilities?  Business reasons (‘enlightened self-interest’) Extra and/or more satisfied customers Employees may be more attracted/committed Forestall legislation Long-term investment which benefits corporation  Moral reasons: Corporations cause social problems Corporations should use their power responsibly All corporate activities have some social impacts Corporations rely on the contribution of a wide set of stakeholders in society, not just shareholders  The Social Responsibilities Required of You as a Manager  Community Physical locations like towns or cities in which companies are located A community provides a company with the physical and social infrastructure that allows it to operate  A company contributes to the economy of the town or region through salaries, wages, and taxes 3-46  Carroll’s Global Corporate Social Responsibility Pyramid Figure 3.2 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-47  Another Type of Social Responsibility: Philanthropy, “Not Dying Rich” Philanthropy Making charitable donations to benefit humankind Corporate Philanthropy- a corporation makes a direct contribution to a charity or cause, most often in the form of cash grants, donations, and/or in-kind services. This initiative is perhaps the most traditional of all corporate social initiatives © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3-48 Corporate Social Responsibility GENEROUS GUYS World’s Biggest Givers Who? How Much? What For? Bill Gates $28B Malaria, public health, education Warren Buffett $8.3B Gates Foundation George Soros $8B Human rights, democracy Gordon Moore $6.8B Environment Carlos Slim $4B Education, healthcare Eli Broad $2.6B Education, arts Azim Premji $2.1B Education James Stowers $2B Genetic research Michael Bloomberg $1.8B Antismoking, transportation LiSource: Ka-Shing Forbes, June 6, 2011. $1.6B Education, healthcare 4-49  Social Responsibility Sustainability or “going green is meeting humanity’s needs without harming future generations.  The green movement emerged as concern about global warming increased. 3-50  Example of Social Responsibility A Socially Responsible Business Practice by McDonald’s:  In the early 1990s, in most parts of the world, McDonald's changed its carryout bags from bleached, 100 percent virgin paper fiber to unbleached, recycled content  During that same period, McDonald's purchased more than $4 billion worth of products made from recycled materials for use in the construction and operation of restaurants worldwide  Corporate Governance Corporate governance the system of governing a company so that the interests of corporate owners and other stakeholders are protected.  The Need for Independent Directors  More attention is being paid to strengthening corporate governance so that directors are clearly separated in their authority from the CEO by insisting on strong financial reporting systems  The Social Responsibilities Required of You As A Manager HOW DOES BEING GOOD PAY OFF? Some examples: Customers prefer to buy products from companies that are ethically and socially responsible even if the products cost more Managers consider a company’s social and ethical track record when considering joining and staying with companies  Thought Question: QUIZ 1  If your boss told you to shred documents as part of a “routine document retention policy” (under the threat of TERMINATION) and you knew the documents were important to a criminal investigation, what would you do? Explain thoroughly. (Save your Assignment on WORD DOC following this format: Family name-Quiz1-MANPRIN) Submit your quiz on or before 5PM today 4 - 56  Global Management Managing across Borders Chapter 3 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.  Major Questions You Should Be Able to Answer 4.1 What three important developments of globalization will probably affect me? 4.2 Why learn about international management, and what characterizes the successful international manager? 4.3 Why do companies expand internationally, and how do they do it? © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-2  Major Questions You Should Be Able to Answer 4.4 What are barriers to free trade, and what major organizations and trading blocs promote trade? 4.5 What are the principal areas of cultural differences? © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-3  Competition & Globalization: Who Will Be No. 1 Tomorrow? © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4  COMPETITION AND GLOBALIZATION: WHO WILL BE NO. 1 TOMORROW? It goes without saying that the world is a competitive place. The United States remained the world’s largest economy in 2024 with a GDP of $29.17 trillion. But Singapore was ranked first in the index of competitiveness for countries worldwide for 2024. © McGraw Hill  COMPETITION AND GLOBALIZATION: WHO WILL BE NO. 1 TOMORROW? Economies of the world are increasingly tied together. Money changes hands globally in a matter of keystrokes. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6  WHY LEARN ABOUT INTERNATIONAL MANAGEMENT? You may work for Multinational corporations You may deal with foreign customers or partners You may deal with foreign employees or suppliers You may work for a foreign firm in the United States, Europe or else where  Competition & Globalization: Who Will Be No. 1 Tomorrow? Globalization the trend of the world economy toward becoming a more interdependent system © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-8  The Rise of the “Global Village” & Electronic Commerce Global village the “shrinking” of time and space as air travel and the electronic media have made it much easier for the people of the globe to communicate with one another © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-9  The Rise of the “Global Village” & Electronic Commerce E-commerce the buying and selling of products and services through computer networks Some E-comerce Statistics:  In the Philippines, revenue in the eCommerce Market is projected to reach US$14.66bn in by the end of 2024  Between 12 and 24 million stores are available online globally  In 2024, retail e-commerce sales are estimated to exceed 4.1 trillion U.S. dollars worldwide  93.5% of internet users worldwide have bought something online. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-10  One Big World Market: The Global Economy Global economy- can be defined as the sum of activities that take place both within a country and between different countries. Each country is a separate unit, with its own industrial production, labor market, financial market, resources and environment. the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-11  One Big World Market: The Global Economy Positive effects world will be far more interconnected leading to better and more affordable products, as well as ever better communication among nations Negative effects the movement, or outsourcing, of formerly well-paying jobs overseas as companies seek cheaper labor costs, particularly in manufacturing © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-12  One Big World Market: The Global Economy Minifirms operating worldwide Small companies can get started more easily Small companies can maneuver faster © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-13  Why Learn About International Management? Never assume that what works in one country will work in another. “Think global, act local” is a valuable motto to follow. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 14  Why Learn About International Management? Multinational Multinational corporation organization business firm with nonprofit operations in several organization with countries operations in several countries (The American Red Cross, Salvation Army, and Amnesty International) © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-15  Why Learn About International Management? Philippine Multinational Firms include: Jollibee Food Corporation San Miguel Corporation Ayala Corporation Petron Corporation SM Investments PLDT Universal Robina Corporation © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 16  The Successful International Manager Ethnocentric managers believe that their native country, culture, language, and behavior are superior to all others Parochialism narrow view in which people see things solely through their own perspective © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-17  The Successful International Manager Polycentric managers take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-18  The Successful International Manager Geocentric managers accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-19  THE SUCCESSFUL INTERNATIONAL MANAGER: GEOCENTRIC, NOT ETHNOCENTRIC OR POLYCENTRIC Ethnocentric managers— “We know best.” Polycentric managers— “They know best.” Geocentric managers— “What’s best is what’s effective, regardless of origin.”  Being a Star Road Warrior Lesson 1: Frequent travel may be needed because personal encounters are essential Lesson 2: Travel may be global, but understanding must be local Lesson 3: Travel downtime can be used to expand business contacts © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-21  Why Companies Expand Internationally 1. Availability of supplies 2. New markets 3. Lower labor costs 4. Access to finance capital 5. Avoidance of tariffs & import quotas © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-22  Five Ways of Expanding Internationally Figure 4.1 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-23  How Companies Expand Internationally Global outsourcing using suppliers outside of your home country, to provide labor, goods, or services Also called offshoring © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-24  How Companies Expand Internationally Importing a company buys goods outside the country and resells them domestically Exporting a company produces goods domestically and sells them outside the country Countertrading bartering goods for goods © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-25  How Companies Expand Internationally Exporting provides a great boost to a country’s economy. It’s estimated every $1 billion in U.S. exports generate over 7,000 U.S. jobs. How much money does the Philippines make from exports? $115.26 billion in 2022 (Electronic products 56.9% Agricultural products 8.7% Manufactured goods 5.4% Mineral products 4.2% Ignition wirings 3.6% Machinery and Transport equipment 3.3% Other 17.9%) 4-26  How Companies Expand Internationally Licensing a company allows a foreign company to pay it a fee to make or distribute the firm’s product or service (i.e. DuPont might license a company in Brazil to make Teflon) Franchising a company allows a foreign company to pay it a fee and a share of the profit in return for using the company’s brand name and a package of materials and services (i.e. Burger King, Hertz, Hilton Hotels) © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-27  How Companies Expand Internationally Franchisors need to be careful to adapt their product to the countries they serve. Yum! Brands, home of KFC, Taco Bell and Pizza Hut, learned that food preferences differ all around the world. 4-28  How Companies Expand Internationally TIME to MAKE the DONUTS… Dunkin’ Donuts Flavors in Taiwan Sweet Potato Honeydew Melon Green Apple Kiwi Fruit Mango Pineapple Strawberry Corn Crumb Soft Rice Cake 4-29  How Companies Expand Internationally GOLDEN ARCHES GLOWING ACROSS the GLOBE McDonald’s has more than 32,000 restaurants in over 117 countries. Maintains varying menus around the world due to the different preferences of its customers. Attracts top-level college graduates to be trained for management spots. Only 8 of every 1,000 applicants actually makes it into the program! 4-30  How Companies Expand Internationally McDonald’s menus in Japan and Thailand © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 31  How Companies Expand Internationally Joint ventures formed with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country also known as a strategic alliance (ex. Hewlett- Packard and Hitachi and Samsung) © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-32  How Companies Expand Internationally Wholly-owned subsidiary foreign subsidiary that is totally owned and controlled by an organization ( i.e. Nestle…has acquired foreign subsidiaries like Perrier in France, Chef America and Dreyer’s Ice Cream) Greenfield venture a foreign subsidiary that the owning organization has built from scratch. In addition to the construction of new production facilities, these projects can also include the building of new distribution hubs, offices and living quarters. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-33  How Companies Expand Internationally Maquiladora- is a Mexican assembly plant that imports materials and equipment on a duty-free and tariff-free basis. Maquiladoras receive raw materials from companies in the U.S. to assemble and export back as finished products. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 34  Barriers to International Trade Trade protectionism – the use of government regulations to limit the import of goods and services. There are three ways by which countries exert protectionism: © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 35  Barriers to International Trade Tariffs customs duty, or tax, levied mainly on imports Import quotas limits on the numbers of a product that can be imported Embargoes complete ban on the import or export of certain products © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-36  Organizations Promoting International Trade World Trade Organization (WTO) designed to monitor and enforce trade agreements Agreements are based on the General Agreement on Tariffs and Trade (GATT) Consist of 159 countries © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-37  Organizations Promoting International Trade World Bank purpose is to provide low-interest loans to developing nations for improving transportation, education, health, and telecommunications International Money Fund (IMF) designed to assist in smoothing the flow of money between nations and operates as the last-resort lender. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-38  Major Trading Blocs Trading bloc group of nations within a geographic region that have agreed to remove trade barriers with one another also known as an economic community © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-39  Major Trading Blocs In a trading bloc, tariffs and non-tariff barriers are reduced or eliminated among the participating states, allowing them to trade with each other as easily as possible. To create a trading bloc, two or more countries come together and create an agreement outlining their trading policies with one another and removing tariffs or other barriers to trade with one another. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 40  Major Trading Blocs  NAFTA – U.S., Canada, Mexico  European Union – 27 trading partners in Europe  APEC – group of 21 Pacific Rim countries  ASEAN - trading bloc of 10 countries in Asia  Mercosur – trading bloc in Latin America  CAFTA – Central America © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-41  Most Favored Nation Trading Status Most favored nation trading status describes a condition in which a country grants other countries favorable trading treatment such as the reduction of import duties. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-42  The Importance of National Culture Culture shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-43  Cultural Dimensions: The GLOBE Project The GLOBE Project- The Global Leadership and Organizational Behavior Effectiveness research program is an on-going cross cultural investigation of leadership and national culture.  Involved surveying thousands of business executives from 61 countries about nine cultural dimensions  It added dimensions such as Humane Orientation- the degree to which society rewards individuals for being generous and kind to others; and Performance Orientation – the degree to which society encourages and rewards group members for performance improvement and excellence. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Cultural Dimensions: The GLOBE Project Low-context culture High-context culture shared meanings are people rely heavily on primarily derived situational cues for from written and meaning when spoken words (i.e. communicating with Germany and the US) others (i.e. China and Japan) © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-45  The Globe Project’s Nine Cultural Dimensions Power distance how much unequal distribution of power should there be in organizations and society Countries with HIGH Power Distance: Malaysia, Philippines, Mexico (High Power distance results to companies having a centralized structure and autocratic leadership). Titles are used, formality is the rule and authority is seldom by- passed © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-46  The Globe Project’s Nine Cultural Dimensions Uncertainty avoidance how much should people rely on social norms and rules to avoid uncertainty Its also shows the extent to which societies tolerate risk or are risk averse. Institutional collectivism how much should leaders encourage and reward loyalty to the social unit © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 47  The Globe Project’s Nine Cultural Dimensions In-group collectivism how much pride and loyalty should people have for their family or organization Gender egalitarianism how much should society maximize gender role differences Assertiveness how confrontational and dominant should individuals be in social relationships © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-48  The Globe Project’s Nine Cultural Dimensions Future orientation how much should people delay gratification by planning and saving for the future Performance orientation how much should individuals be rewarded for improvement and excellence Humane orientation how much should society encourage and reward people for being kind, fair, friendly, and generous © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-49  Other Cultural Variations 1. Language 2. Interpersonal space 3. Communication 4. Time orientation Monochronic, Polychronic 5. Religion 6. Law and political stability © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4-50  Other Cultural Variations 1. Language - more than 3,000 different languages are spoken in the world Managers can either speak their own language, use a translator, or learn the local language 4-51  Other Cultural Variations LOST in TRANSLATION: Advertisements Gone Wrong Braniff Airlines’ slogan "Fly in leather” translated in Spanish as "Fly naked.” Siri, Apple’s new digital assistant on iPhone 4S, is a common slang term for “butt” in Japanese. In Italy, Schweppes Tonic Water was mistaken as Schweppes Toilet Water. Nokia’s line of Lumia phones is Spanish for “prostitute.” 4-52  Other Cultural Variations 2. Interpersonal space - how close people should be when communicating varies by culture (proxemics) Some cultures like the people of Latin America prefer a smaller interpersonal space, whereas others, like the people of Northern Europe prefer to be further apart 4-53  Proxemics: Territorial Space Territorial Space - bands of space extending outward from the body; territorial space differs from cultur