Unit 2 (Part 2) PDF

UNIT 2 Contents Managerial Functions, Challenges &. Roles Managerial Functions: POSDCORB Managerial Skills and Managerial Roles Design Thinking-Creativity & Innovation for Managers Social, Environmental & Ethical Responsibilities of Managers Sustainability Challenges- CSR, ESG Policy...

UNIT 2 Contents Managerial Functions, Challenges &. Roles Managerial Functions: POSDCORB Managerial Skills and Managerial Roles Design Thinking-Creativity & Innovation for Managers Social, Environmental & Ethical Responsibilities of Managers Sustainability Challenges- CSR, ESG Policy Managing Emerging Issues & Global Challenges due to IR 4.0, 5.0 Management by Objectives MANAGEMENT BY OBJECTIVES Drucker (1954) emphasized for the first time the organizational need for setting objectives to make performance more measurable. When objectives are set in a systematic manner, consciously directed towards effective and efficient achievement of organizational and individual targets, it is known as management by objectives (MBO). General Electric Company used the elements of MBO while reorganizing itself, introducing decentralized decision making. For most organizations, MBO is required for performance appraisal as it calls for active involvement of subordinates in setting objective standards. Moreover, MBO also acts as a motivating factor for employees because they can understand their specific objectives and assess the degree of their achievement themselves. Thus, MBO helps in managing an organization with clarity, encourages personal commitment, and creates effective controls. In a way, MBO has paved the way for participative management, involving people in framing objectives and aligning their individual goals with the organizational goals or vice versa. CONTD… Organizations use management by objectives (MBO), a process of setting mutually agreed-upon goals and using those goals to evaluate employee performance. If Francisco were to use this approach, he would sit down with each member of his team and set goals and periodically review whether progress was being made toward achieving those goals. MBO programs have four elements: goal specificity, participative decision making, an explicit time period, and performance feedback. Instead of using goals to make sure employees are doing what they’re supposed to be doing  Steps in MBO Does MBO work? Studies have shown that it can increase employee performance and organizational productivity. For example, one review of MBO programs found productivity gains in almost all of them. But is MBO relevant for today’s organizations? If it’s viewed as a way of setting goals, then yes, because research shows that goal setting can be an effective approach to motivating employee. Design Thinking-Creativity & Innovation for Managers Stimulating innovation “Innovation is the key to continued success.” “We innovate today to secure the future.” These two quotes (the first by Ajay Banga, the newly appointed CEO of MasterCard, and the second by Sophie Vandebroek, chief technology officer of Xerox Innovation Group) reflect how important innovation is to organizations. Success in business today demands innovation. In the dynamic, chaotic world of global competition, organizations must create new products and services and adopt state-of-the-art technology if they’re going to compete successfully. What companies come to mind when you think of successful innovators? Maybe it’s Apple with its iPad, iPhone, iPod, and wide array of computers. Maybe it’s Google with its continually evolving web platform. What’s the secret to the success of these innovator champions? What can other managers do to make their organizations more innovative? World’s Most Innovative Companies Creativity Versus Innovation Stimulating and Nurturing Innovation The systems model can help us understand how organizations become more innovative. Getting the desired outputs (innovative products and work methods) involves transforming inputs. These inputs include creative people and groups within the organization. But having creative people isn’t enough. It takes the right environment to help transform those inputs into innovative products or work methods. This “right” environment—that is, an environment that stimulates innovation—includes three variables: the organization’s structure, culture, and human resource practices. STRUCTURAL VARIABLES. When Carol Bartz joined Yahoo! Inc. as CEO, one of the first things she noticed was how the organization’s structure got in the way of innovation. Employees who wanted to try something different were unsure about whether they got to make the decision or somebody else did and what would happen if they went for it. Bartz’s philosophy was that “There’s a freedom when you organize around the idea that you’re clearly in charge and go for it.” Today, Yahoo!’s structure has been changed so that it provides clearer lines of responsibility and the freedom to make mistake. CONTD… An organization’s structure can have a huge impact on innovativeness. Research into the effect of structural variables on innovation shows five things. First, an organic-type structure positively influences innovation. Because this structure is low in formalization, centralization, and work specialization, it facilitates the flexibility and sharing of ideas that are critical to innovation. Second, the availability of plentiful resources provides a key building block for innovation. With an abundance of resources, managers can afford to purchase innovations, can afford the cost of instituting innovations, and can absorb failures. Third, frequent communication between organizational units helps break down barriers to innovation. Cross-functional teams, task forces, and other such organizational designs facilitate interaction across departmental lines and are widely used in innovative organizations. Fourth, innovative organizations try to minimize extreme time pressures on creative activities despite the demands of white-water rapids environments. Companies such as Google, 3M, and Hewlett-Packard actually urge staff researchers to spend a chunk of their workweek on self-initiated projects. Finally, studies have shown that an employee’s creative performance was enhanced when an organization’s structure explicitly supported creativity. Beneficial kinds of support included things like encouragement, open communication, readiness to listen, and useful feedback. CONTD.. CULTURAL VARIABLES. Innovative organizations tend to have similar cultures. They encourage experimentation, reward both successes and failures, and celebrate mistakes. An innovative organization is likely to have the following characteristics: Accept ambiguity. Too much emphasis on objectivity and specificity constrains creativity. Tolerate the impractical. Individuals who offer impractical, even foolish, answers to what-if questions are not stifled. What at first seems impractical might lead to innovative solutions. Keep external controls minimal. Rules, regulations, policies, and similar organizational controls are kept to a minimum. Tolerate risk. Employees are encouraged to experiment without fear of consequences should they fail. Mistakes are treated as learning opportunities. Tolerate conflict. Diversity of opinions is encouraged. Harmony and agreement between individuals or units are not assumed to be evidence of high performance. Focus on ends rather than means. Goals are made clear, and individuals are encouraged to consider alternative routes toward meeting the goals. Focusing on ends suggests that several right answers might be possible for any given problem. Use an open-system focus. Managers closely monitor the environment and respond to changes as they occur. For example, at Starbucks, product development depends on “inspiration field trips to view customers and trends.” Provide positive feedback. Managers provide positive feedback, encouragement, and support so employees feel that their creative ideas receive attention. Exhibit empowering leadership. Be a leader who lets organizational members know that the work they do is significant. Provide organizational members the opportunity to participate in decision making. CONTD.. HUMAN RESOURCE VARIABLES. In this category, we find that innovative organizations actively promote the training and development of their members so their knowledge remains current; offer their employees high job security to reduce the fear of getting fired for making mistakes; and encourage individuals to become idea champions, actively and enthusiastically supporting new ideas, building support, overcoming resistance, and ensuring that innovations are implemented. Research finds that idea champions have common personality characteristics: extremely high self-confidence, persistence, energy, and a tendency toward risk taking. They also display characteristics associated with dynamic leadership. They inspire and energize others with their vision of the potential of an innovation and through their strong personal conviction in their mission. They’re also good at gaining the commitment of others to support their mission. In addition, idea champions have jobs that provide considerable decision-making discretion. This autonomy helps them introduce and implement innovations in organizations. Understanding Design Thinking Meaning of Design Thinking Design thinking supports in developing, teaching, learning, and applying strategies to solve complications in a creative manner in the projects and processes of the business. Definition of Design Thinking As time passes by, the importance of design thinking has been consistently increasing in the modern world. The consumers of today’s world can access global markets quickly. Design Thinking has evaded the differences between physical and digital experiences. Design Thinking is a strategy for creative problem solving by prioritizing customers’ requirements above everything else. It helps to engage a person in several opportunities like experimenting and creating a prototype model, gathering feedback from customers and redesigning the product using innovative solutions. Design Thinking is a solution-based approach where you focus on finding solutions to the problems in contrast to the problem-based approach. The problem-based thinking approach focuses on finding obstacles and limitations on why a problem exists. Social, Environmental & Ethical Responsibilities of Managers Social, Ethical & Environmental Responsibilities of Managers Social Responsibility The obligation of organization management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization. Social responsibility also covers a range of issues, many of which are ambiguous with respect to right or wrong. Ethical Responsibilities Ethical responsibility includes behaviours that are not necessarily codified into law and may not serve the corporation’s direct economic interests. To be ethical, organization decision makers should act with equity, fairness and impartiality, respect the rights of individuals and provide different treatment of individuals only when relevant to the organization’s goals and tasks. Unethical behaviour occurs when decisions enable an individual or company to gain at the expense of other people or society as a whole. Ethical responsibility is the pillar of corporate social responsibility rooted in acting in a fair, ethical manner. Companies often set their own standards, although external forces or demands by clients may shape ethical goals. Instances of ethical responsibility include: Fair treatment across all types of customers regardless of age, race, culture, or sexual orientation. Positive treatment of all employees including favorable pay and benefits in excess of mandated minimums. This includes fair employment consideration for all individuals regardless of personal differences. Contd… Environmental Responsibility Environmental responsibility is the pillar of corporate social responsibility rooted in preserving mother nature. Through optimal operations and support of related causes, a company can ensure that it leaves natural resources better than before its operations. A company can pursue environmental stewardship through: Reducing pollution, waste, natural resource consumption, and emissions through its manufacturing process. Recycling goods and materials throughout its processes, including promoting re-use practices with its customers. Offsetting negative impacts by replenishing natural resources or supporting causes that can help neutralize the company's impact. For example, a manufacturer that deforests trees may commit to planting the same amount or more. Distributing goods consciously by choosing methods that have the least impact on emissions and pollution. Corporate social responsibility (CSR) Corporate social responsibility (CSR) indicates a deliberate socially responsible behaviour of an organization. Even though globally there are many corporate governance mandates, both in terms of business norms and legislation, many organizations fail to integrate their social responsibility with their business practices. It is important to understand that only complying with the legislative requirements of corporate social responsibility is not enough— organizations need to make it their deliberate choice. In India, the Tata group is a notable role model, whose care for social responsibility, even going beyond the statutory requirements, has today created a win-win situation such that Tata Steel enjoys substantial cost benefits, sourcing materials from their community development centres. SOCIAL RESPONSIBILITY OF BUSINESS It is now proved worldwide that ultimately organizations can gain substantially. By meeting social expectations, it is possible for an organization to sustain itself in the long run and grow. The obligation of any business to protect and serve public interests is known as social responsibility of business. Apart from profit-making, organizations perform numerous social functions since they are a part of the society. Social responsibility can be defined as a business’s intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society. Social responsibility, therefore, implies that an organization must not harm the society at large while it does its business activities. Organizations’ concern about their social responsibility dissuades them from adopting any unfair means in the pursuit of profit. They voluntarily take part in activities related to social responsibility in order to meet the expectations of various stakeholders. Therefore, the importance of social responsibility for business is manifold. Some of the ways in which it is important are: It creates goodwill for the business among the public. It creates a positive public image. It helps in long-term survival and growth of business. It provides satisfaction to employees and this factor is directly related to productivity. Consumers become more conscious about their rights. CONTD… From an organization’s point of view, important constituents of social responsibility encompass all the stakeholders of the organization. J. R. Schermerhorn (1989) suggests eight important areas of organizational social responsibility. These are: 1. Ecology and environmental quality which covers pollution control, dispersion of industrial waste, and effective land use, including beautification 2. Consumerism, that is, truth in lending, advertising, and business. 3. Community needs, that is, meeting the education and health requirements, providing effective solutions to local problems, and enabling voluntary participation in community development works 4. Government relations 5. Taking cognizance of the minorities and disadvantaged persons 6. Labour relations 7. Shareholder relations 8. Philanthropy, that is, financial support to the promotion of art and culture, offering scholarships for education, and financial support for charities  Examples of Corporate Social Responsibility Starbucks Starbucks (SBUX) has long been known for its keen sense of corporate social responsibility and commitment to sustainability and community welfare. In its 2022 Environmental and Social Impact Report, the coffee giant highlights taking care of its workforce and the planet among its CSR priorities. Starbucks points to its investments in its employees through stock grants and providing additional medical, family, and educational benefits. In terms of environmental sustainability, the company's goals include achieving 50% reductions in greenhouse gas emission, water consumption, and waste by 2030, Home Depot As part of its annual reporting on ESG, Home Depot (HD) highlighted its achievements in focusing on its employees, operating sustainably, and strengthening its communities. The company has invested more than 1 million hours per year in training to help front-line employees advance in their careers, aims to produce or procure 100% renewable energy to operate its facilities by 2030, and has plans to spend $5 billion per year with diverse suppliers by 2025 General Motors General Motors won the Sustainability Leadership Award from Business Intelligence Group in 2022 and was among Diversity Inc.'s top 50 companies for diversity for a seventh consecutive year in 2021. According to its latest Sustainability Report, the automaker provided $60 million in grants to more than 400 U.S. nonprofits focusing on social issues, and it has agreements in place to use 100% renewable electricity at its U.S. sites by 2025. Companies striving to measure success beyond bottom-line financial results may adopt corporate social responsibility strategies. These strategies may target environmental, ethical, philanthropic, and fiscal responsibility that extend beyond the products they sell. CSR aims to make the world a better place beyond transacting with customers and may result in company-specific benefits as well. CONTD… Corporate social responsibility, also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance, is a form of corporate self-regulation integrated into a business model. Ideally, a CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure their adherence to law, ethical standards, and international norms. All business would embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stockholders, and all other members of the public sphere. CONTD… Organizations need to demonstrate their social responsibilities to various stakeholders by complying with the following aspects: Ensuring reasonable returns on investment to investors/shareholders Prompt repayment of loans to financial institutions Paying salaries and ensuring social security to employees Providing care and comforts to employees at the workplace and meeting statutory requirements like holidays, maternity leave, sick leave, and overtime payment Payment of taxes to the government Providing quality goods and services to customers according to their money’s worth Arguments For and Against Social Responsibility Green Management & Sustainability Coca-Cola, the world’s largest soft drink company, announced that 100 percent of its new vending machines and coolers would be hydrofluorocarbon-free (HFC-free) by 2015. This initiative alone would have the same effect on global carbon emissions as taking 11 million cars off the road for a single year. In 2004, top executives at General Electric Company voted against CEO Jeffrey Immelt’s plan for a green business initiative. However, Immelt refused to take “no” for an answer and today that initiative, called Ecomagination, is one of the most widely recognized corporate green programs. It led to $100 million in cost savings and reduced the company’s greenhouse emissions by 30 percent. And the program fostered the development of 80 new products and services that generate some $17 billion in annual revenue. Immelt said, “Going green has been 10 times better than I ever imagined.” Being green is in! Increasingly, managers have begun to consider the impact of their organization on the natural environment, which we call green management. Contd…. Green management is when managers consider the impact of their organization on the natural environment. Organizations can “go green” in different ways. The light green approach is doing what is required legally, which is social obligation. Using the market approach, organizations respond to the environmental preferences of their customers. Using the stakeholder approach, organizations respond to the environmental demands of multiple stakeholders. Both the market and stakeholder approaches can be viewed as social responsiveness. With an activist or dark green approach, an organization looks for ways to respect and preserve the earth and its natural resources, which can be viewed as social responsibility. Contd… The first approach, the legal (or light green) approach, is simply doing what is required legally. In this approach, which illustrates social obligation, organizations exhibit little environmental sensitivity. They obey laws, rules, and regulations without legal challenge and that’s the extent of their being green. As an organization becomes more sensitive to environmental issues, it may adopt the market approach, and respond to environmental preferences of customers. Whatever customers demand in terms of environmentally friendly products will be what the organization provides. For example, DuPont developed a new type of herbicide that helped farmers around the world reduce their annual use of chemicals by more than 45 million pounds. By developing this product, the company was responding to the demands of its customers (farmers) who wanted to minimize the use of chemicals on their crops. This is a good example of social responsiveness, as is the next approach. In the stakeholder approach, an organization works to meet the environmental demands of multiple stakeholders such as employees, suppliers, or community. For instance, Hewlett Packard has several corporate environmental programs in place for its supply chain (suppliers), product design and product recycling (customers and society), and work operations (employees and community) Finally, if an organization pursues an activist (or dark green) approach, it looks for ways to protect the earth’s natural resources. The activist approach reflects the highest degree of environmental sensitivity and illustrates social responsibility. For example, Belgian company Ecover produces ecological cleaning products in a near-zero-emissions factory. This factory (the world’s first ecological one) is an engineering marvel with a huge grass roof that keeps things cool in summer and warm in winter and a water treatment system that runs on wind and solar energy. The company chose to build this facility because of its deep commitment to the environment. Managers and Ethical Behaviour Is it ethical for someone to use a company car for private use? How about using company e-mail for personal correspondence or using the company phone to make personal phone calls? As managers plan, organize, lead, and control, they must consider ethical dimensions. What do we mean by ethics? We’re defining it as the principles, values, and beliefs that define right and wrong decisions and behavior. Many decisions that managers make require them to consider both the process and who’s affected by the result. Ethics and Values in Organizations Encouraging Ethical behaviour Many empirical studies and research substantiate that ethical organizations achieve better business results. It is due to this reason that organizations globally are increasing their social responsiveness and ethical practices to fulfil the expectations of all stakeholders. Whether it is a case of child labour exploitation by McDonald’s in China, the Indian carpet industry or the Bangladesh garment industry, or suppression of information regarding adverse effects of products or services, organizations get immediately identified and socially reprimanded, resulting in a loss in business and long-term sustainability. Stakeholders are no longer just limited to shareholders or investors. A stakeholder could be anyone who has any interest in or involvement with, dependence on, or made any contribution to the organization. Therefore, every organization needs to embrace values, morals, and ethics to be socially acceptable and to ensure long-term sustainability. A strong culture exerts more influence on employees than a weak one. If a culture is strong and supports high ethical standards, it has a powerful and positive influence on the decision to act ethically or unethically. For example, IBM has a strong culture that has long stressed ethical dealings with customers, employees, business partners, and communities. To reinforce the importance of ethical behaviors, the company developed an explicitly detailed set of guidelines for business conduct and ethics. And the penalty for violating the guidelines: disciplinary actions including dismissal. IBM’s managers continually reinforce the importance of ethical behavior and reinforce the fact that a person’s actions and decisions are important to the way the organization is viewed. Managers can do a number of things if they’re serious about encouraging ethical behaviors—hire employees with high ethical standards, establish codes of ethics, lead by example, Job Goals, ethics training , protective mechanism as ethical counsellors and so forth. Managing Ethical and Social responsibility challenges Today’s managers continue to face challenges in being socially responsible and ethical. Managers can manage ethical lapses and social irresponsibility by being strong ethical leaders and by protecting employees who raise ethical issues. The example set by managers has a strong influence on whether employees behave ethically. Ethical leaders also are honest, share their values, stress important shared values, and use the reward system appropriately. Managers can protect whistle-blowers (employees who raise ethical issues or concerns) by encouraging them to come forward, by setting up toll free ethics hotlines, and by establishing a culture in which employees can complain and be heard without fear of reprisal. Social entrepreneurs play an important role in solving social problems by seeking out opportunities to improve society by using practical, innovative, and sustainable approaches. Social entrepreneurs want to make the world a better place and have a driving passion to make that happen. Businesses can promote positive social change through corporate philanthropy and employee volunteering efforts. Sustainability Challenges- CSR, ESG Policy Sustainability is concerned with “meeting the needs of people today without compromising the ability of future generations to meet their own needs.” From a business perspective, sustainability has been defined as a company’s ability to achieve its business goals and increase long-term shareholder value by integrating economic, environmental, and social opportunities into its business strategies. Social responsibility can be explained as "the obligation of the firm to use its resources in ways to benefit society, through committed participation as a member of society, taking into account the society at large and improving the welfare of society at large independent of direct gains of the company" (Weile et al., 2001). Corporate social responsibility (CSR) and sustainability are not just buzzwords, but essential aspects of modern business. They reflect how companies manage their environmental, social, and governance (ESG) impacts and contribute to the well-being of society and the planet. Stakeholder capitalism One of the major shifts in CSR and sustainability is the move from shareholder to stakeholder capitalism. This means that companies are not only accountable to their owners and investors, but also to their employees, customers, suppliers, communities, and the environment. Stakeholder capitalism requires a more holistic and long-term approach to business strategy, decision-making, and performance measurement. It also demands more transparency, engagement, and collaboration with diverse and often conflicting interests. Contd… Sustainability and ESG (environmental, social and governance) are initiatives that have become imperative in business with the threat of climate change and climate risk. ESG refers to a set of criteria used to assess a company's environmental, social, and governance impact. In contrast, sustainability is the capacity to maintain or endure, focusing on the interplay of environmental, social, and economic factors. What is sustainability? Sustainability is the practice of operating a business in a way that meets the economic, social and environmental needs of the present without compromising the ability of future generations to meet their own needs. Environmental sustainability focuses on reducing or eliminating negative impacts on the environment by minimizing greenhouse gas (GHG) emissions, reducing waste and pollution, and conserving natural resources. The social aspect focuses on promoting social equity, diversity, and inclusion by ensuring fair and safe labor practices that prioritise health and safety, human rights, and community involvement. Finally the economic aspect of sustainability focuses on maintaining long-term profitability, creating economic value, and ensuring responsible resource allocation. Contd… Corporate sustainability aims to ensure that businesses operate in an ethical, responsible, and sustainable manner, and that they contribute to the well-being of the communities in which they operate. By addressing a wide range of issues, such as reducing greenhouse gas emissions, improving working conditions, promoting human rights, and conserving natural resources corporate sustainability can ensure businesses operate in a way that's profitable and socially responsible. This will create value and benefit all stakeholders in the long-term. What is ESG? ESG is a set of criteria used to evaluate a company’s environmental, social, and governance. You can think of it as a subset of sustainability which includes economic considerations. Its main purpose is to provide stakeholders and investors with a framework to assess a company's impact on society and the environment, as well as its corporate governance practices. ESG metrics and factors are considered alongside traditional financial services and metrics by institutional investors for ESG investing(investment made in firms that adopt ethical practices to make profits.) Breaking down ESG, the environmental component includes factors such as greenhouse gas emissions, energy efficiency, waste management, and water conservation. The social component considers how you interact with your employees and community such as human rights, employee diversity, labor standards, and supply chain management. Lastly the governance component of ESG considers how your business is run and ensures it acts in the best interest of your stakeholders. This includes board diversity, compensation, risk management and ethics. Understanding and improving an organization’s ESG performance can benefit you in multiple ways, including improved financial performance, enhanced reputation and branding, and reduced risk of regulatory non-compliance. In recent years, ESG factors have become increasingly important to investors and other stakeholders, as they seek to invest in companies with a positive impact on society and the environment. Managing Emerging Issues & Global Challenges due to IR 4.0, 5.0 The advent of the steam engine accelerated the First Industrial Revolution, which began in Britain in the middle of the 18th century. The Second Industrial Revolution arose in Europe and the United States in the second mid-nineteenth century. This revolution had characterized by mass manufacturing and the substitution of chemical and electrical energy for steam. Many technologies and mechanization had been developed to meet the increased demand, allowing productivity to increase. The Third Industrial Revolution was sparked by the creation of the Integrated Circuit (microchip). Using electronics and information technology to accomplish increased automation in manufacturing is a significant characteristic of this revolution, which arose in many industrialized countries around the world in the later years of the twentieth century. Every industrial revolution centered around boosting productivity. The first three industrial revolutions had a significant impact on industrial operations, allowing for increased productivity and efficiency by utilizing innovative technological breakthroughs, such as steam engines, electricity, and digital technology. The Fourth Industrial Revolution, 4IR, or Industry 4.0 conceptualizes rapid change to technology, industries, and societal patterns and processes in the 21st century due to increasing interconnectivity and smart automation  Contd… Industry 4.0, which could ultimately be referred to as the fourth industrial revolution, is a highly complex framework that has been commonly debated and discovered. It has a significant impact on the industrial sector because it introduces relevant improvements related to smart and future factories. This developing Industry 4.0 concept is an umbrella term for a new industrial paradigm that includes Cyber-Physical Systems (CPS), the Internet of Things (IoT), the Internet of Services (IoS), Robotics, Big Data, Cloud Manufacturing, and Augmented Reality, etc. The origin of Industry 5.0 With Industry 4.0, companies began to use technology intelligently. In this way, the entire market has become more competitive, productive, and efficient. But in addition to focusing on having a factory completely automated by artificial intelligence and other technologies, it is necessary to think about other aspects as well. The main one is how to unite the work of humans and robots for better and more personalized results. It is in this sense that the concept of Industry 5.0 is established in the market today. The concept is that man and machine need to work together to facilitate production processes in the industry and make products less automated and lacking in flexibility. he most classic examples are companies like Tesla Motors, Apple, and Boeing. It is possible to notice that we are only mentioning very large companies, and this is not by chance. Unlike small and medium-sized companies that are still struggling to use Industry 4.0 technology in the right way, these giant companies can already see beyond. They understand that in addition to technology, it is also necessary to invest in the humanization of processes and appreciation of the human factor for a business to grow. The pillars of Industry 4.0 The pillars of Industry 5.0 What are the differences between Industry 4.0 and Industry 5.0? As with the first three industrial revolutions, there are significant changes between Industry 4.0 and 5.0: The fourth revolution was driven by technological change, the fifth will be powered by values. Rather than innovating to create a profitable and efficient production process, new cyber systems will make manufacturing more sustainable, human-centric and resilient. With the advent of the Internet of Things (IoT), greater automation and artificial intelligence, connectivity between machines was the focus of Industry 4.0. In contrast, Industry 5.0 will prioritise greater collaboration between humans and machines through cyber-physical systems and technologies. As well as making industrial production more human-centric, Industry 5.0 will see an increased focus on customer needs. From making the supply chain more resilient to creating interactive products and enhancing the overall customer experience. The challenges of Industry 5.0 People may need to develop completely new skills. Working alongside robots sounds fantastic, but human workers will have to learn how to collaborate with a smart machine, a robot manufacturer. Beyond the soft skills required, technical skills will also be an issue. Programming the industrial robot or managing it translates into new jobs, like Chief Robotics Officer. The adoption of new technology has always taken time and effort. How will the manufacturing industry implement it all? What are industry 5.0 technologies? Customized software connecting factories, real-time data, collaborative robotics, 3D printing, Artificial Intelligence (AI), the Internet of Things (IoT), Cloud are only a few to name. Furthermore, these technologies need investment. A UR Cobot doesn’t come cheap. Training people for the new jobs also brings costs. Some companies may find it difficult to upgrade their production lines for Industry 5.0. Even if money is not a problem, the rhythm of change could be. Those who cannot afford it or are too slow in adopting 5.0 may be left behind. The opportunities of Industry 5.0 The good news is that regardless of the challenges, there are more opportunities to encourage companies to implement Industry 5.0. Let’s see what they are: Increased overview of the maintenance plan. It refers to predictive maintenance, as opposed to preventive maintenance applied so far. Smart sensors, IoT devices, and customized software help to monitor and predict possible failures in due time. Only those machines likely to break down will be stopped for adjustments. Sustainability. Industry 5.0 manufacturing promises to use resources wisely, adjusting to the current need. The collaboration between humans and machines leads to flexible business models. In consequence, waste and overproduction can be reduced up to elimination. Local production and new jobs will also make local economies sustainable. Human efficiency & productivity. Ironically, advanced technologies bring people back to the center of production. A collaborative robot can now perform repetitive, even dangerous, tasks while people focus on creativity and solutions. Such skills lead to increased productivity, especially when people feel motivated by their work and the end result. Environmental control inside the factory. Smart, connected sensors and customized software give real-time and predictive overviews of climate, humidity, temperature, and energy consumption. This is especially helpful in farms that depend so much on the weather. Knowing what to expect and where to intervene can prevent severe losses and improve production. Forecasting line production efficiency. Smart, connected machines together with customized software, machine learning, and industrial automation, can forecast production efficiency based on the current activity. This is what renders flexibility: processes can be adjusted according to parameters to avoid losses. Organizational Behaviour Unit 3 Contents Organizational Behaviour: Framework Organizational Behaviour INTRODUCTION Although most managers will not go as far as Vineet Nayar to promote employee satisfaction, many organizations are concerned with the attitudes of their employees. Like him, most managers want to attract and retain employees with the right attitudes and personality. They want people who show up and work hard, get along with coworkers and customers, have good attitudes, and exhibit good work behaviors in other ways. But as you’re probably already aware, people don’t always behave like that “ideal” employee. They job hop at the first opportunity or they may post critical comments in blogs. People differ in their behaviors and even the same person can behave one way one day and a completely different way another day. For instance, haven’t you seen family members, friends, or coworkers behave in ways that prompted you to wonder: Why did they do that? Focus and Goals of OB Organizational behavior is the study of the actions of people at work. Like an iceberg, OB has a small visible dimension and a much larger hidden portion. OB provides managers with considerable insights into these important, but hidden, aspects of the organization Focus of Organizational Behavior Organizational behavior focuses on three major areas. First, OB looks at individual behavior. Based predominantly on contributions from psychologists, this area includes such topics as attitudes, personality, perception, learning, and motivation. Second, OB is concerned with group behavior, which includes norms, roles, team building, leadership, and conflict. Our knowledge about groups comes basically from the work of sociologists and social psychologists. Finally, OB also looks at organizational aspects including structure, culture, and human resource policies and practices. OB applies the knowledge gained about individuals, groups, and the effect of structure on behavior in order to make organizations work more effectively. Goals of Organizational Behavior The goals of OB are to explain, predict, and influence behavior. Managers need to be able to explain why employees engage in some behaviors rather than others, predict how employees will respond to various actions and decisions, and influence how employees behave. Six important behaviours have been identified: employee productivity, absenteeism, turnover, organizational citizenship behavior (OCB), job satisfaction, and workplace misbehavior. An understanding of four psychological factors—employee attitudes, personality, perception, and learning—can help us predict and explain these employee behaviors. Challenges and opportunities managers have in applying OB concepts Understanding organizational behavior has never been more important for managers. Take a quick look at the dramatic changes in organizations. The typical employee is getting older; more women and people of color are in the workplace; corporate downsizing and the heavy use of temporary workers are severing the bonds of loyalty that tied many employees to their employers; global competition requires employees to become more flexible and cope with rapid change. The global recession has brought to the forefront the challenges of working with and managing people during uncertain times. In short, today’s challenges bring opportunities for managers to use OB concepts. In this section, Following are some of the most critical issues confronting managers for which OB offers solutions—or at least meaningful insights toward solutions Contd… Responding to Economic Pressures: Managing employees well when times are tough is just as hard as when times are good—if not more so. But the OB approaches sometimes differ. In good times, understanding how to reward, satisfy, and retain employees is at a premium. In bad times, issues like stress, decision making, and coping come to the fore. Responding to Globalization Organizations are no longer constrained by national borders. Burger King is owned by a British firm, and McDonald’s sells hamburgers in Moscow. ExxonMobil, a so-called U.S. company, receives almost 75 percent of its revenues from sales outside the United States. Increased Foreign Assignments If you’re a manager, you are increasingly likely to find yourself in a foreign assignment—transferred to your employer’s operating division or subsidiary in another country. Once there, you’ll have to manage a workforce very different in needs, aspirations, and attitudes from those you are used to back home. Working with People from Different Cultures To work effectively with people from different cultures, you need to understand how their culture, geography, and religion have shaped them and how to adapt your management style to their differences. Managing Workforce Diversity Workforce diversity acknowledges a workforce of women and men; many racial and ethnic groups; individuals with a variety of physical or psychological abilities; and people who differ in age and sexual orientation. Managing this diversity is a global concern. Improving Customer ServiceToday, the majority of employees in developed countries work in service jobs, including 80 percent in the United States. The common characteristic of these jobs is substantial interaction with an organization’s customers. And because an organization can’t exist without customers—whether it is American or Indians, management needs to ensure employees do what it takes to please customers. Many an organization has failed because its employees failed to please customers. Management needs to create a customer-responsive culture. OB can provide considerable guidance in helping managers create such cultures—in which employees are friendly and courteous, accessible, knowledgeable, prompt in responding to customer needs, and willing to do what’s necessary to please the custom Contd… Improving People Skills the knowledge of OB helps managers to explain and predict the behavior of people at work. Manager learn the ways to design motivating jobs, techniques for improving their listening skills, and how to create more effective teams. Stimulating Innovation and Change Today’s successful organizations must foster innovation and master the art of change, or they’ll become candidates for extinction. Victory will go to the organizations that maintain their flexibility, continually improve their quality, and beat their competition to the marketplace with a constant stream of innovative products and services. An organization’s employees can be the impetus for innovation and change, or they can be a major stumbling block. The challenge for managers is to stimulate their employees’ creativity and tolerance for change. The field of OB provides a wealth of ideas and techniques to aid in realizing these goals. Creating a Positive Work Environment A real growth area in OB research is positive organizational scholarship (also called positive organizational behavior), which studies how organizations develop human strengths, foster vitality and resilience, and unlock potential. Some key independent variables in positive OB research are engagement, hope, optimism, and resilience in the face of strain. ALL THE BEST!