Contemporary Management PDF

Contemporary Management  1-2 1 The Environment of Management Learning Objective 1.To be able to outline organizational environment 2.To be able to identify forces influence the organizational environment 3.To be able to examine barrier that affect manag...

Contemporary Management  1-2 1 The Environment of Management Learning Objective 1.To be able to outline organizational environment 2.To be able to identify forces influence the organizational environment 3.To be able to examine barrier that affect managers 4.To be able to classify the Hofstede cultural dimension toward managerial effectiveness.  3-4 Organizational Environment ⚫Organizational Environment: those forces outside its boundaries that can impact it. ◼ Forces can change over time and are made up of Opportunities and Threats. ⚫Opportunities: openings for managers to enhance revenues or open markets. ◼ New technologies, new markets and ideas. ⚫Threats: issues that can harm an organization. ◼ economic recessions, oil shortages. ⚫Managers must seek opportunities and avoid threats. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-5 Forces in the Organizational Environment Figure 3.1 General Environment Technological Task Sociocultural Environment Forces Forces Competitors Global Supplier Firm Customers Economic Forces s Forces Distributors Political & Demographic Legal Forces Forces Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-6 Task Environment ⚫Task Environment: forces from suppliers, distributors, customers, and competitors. ⚫Suppliers: provide organization with inputs ◼ Managers need to secure reliable input sources. ◼ Suppliers provide raw materials, components, and even labor. ◆ Working with suppliers can be hard due to shortages, unions, and lack of substitutes. ◆ Suppliers with scarce items can raise the price and are in a good bargaining position. ◼ Managers often prefer to have many, similar suppliers of each item. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-7 Task Environment ⚫Distributors: organizations that help others to sell goods. ◼ Compaq Computer first used special computer stores to sell their computers but later sold through discount stores to reduce costs. ◼ Some distributors like Wal-Mart have strong bargaining power. ◆ They can threaten not to carry your product. ⚫Customers: people who buy the goods. ◼ Usually, there are several groups of customers. ◆ For Compaq, there are business, home, & government buyers. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-8 Task Environment ⚫Competitors: other organizations that produce similar goods. ◼ Rivalry between competitors is usually the most serious force facing managers. ◼ High levels of rivalry often means lower prices. ◆ Profits become hard to find. ◼ Barriers to entry keep new competitors out and result from: ◆ Economies of scale: cost advantages due to large scale production. ◆ Brand loyalty: customers prefer a given product. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-9 Industry Life Cycle ⚫Reflects the changes that take place in an industry over time. ⚫Birth stage: firms seek to develop a winning technology. ◼ VHS vs. Betamax in video, or 8-track vs. cassette in audio. ⚫Growth stage: Product gains customer acceptance and grows rapidly. ◼ New firms enter industry, production improves, distributors emerge. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-10 ⚫Shakeout stage: at end of growth, there is a slowing customer demand. ◼ Competitor rivalry increases, prices fall. ◼ Least efficient firms fail and leave industry. ⚫Maturitystage: most customers have bought the product, growth is slow. ◼ Relationships between suppliers, distributors more stable. ◼ Usually, industry dominated by a few, large firms. ⚫Declinestage: falling demand for the product. ◼ Prices fall, weaker firms leave the industry. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-11 The General Environment ⚫Consistsof the wide economic, technological, demographic and similar issues. ◼ Managers usually cannot impact or control these. ◼ Forces have profound impact on the firm. ⚫Economic forces: affect the national economy and the organization. ◼ Includes interest rate changes, unemployment rates, economic growth. ◼ When there is a strong economy, people have more money to spend on goods and services. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-12 ⚫Technological forces: skills & equipment used in design, production and distribution. ◼ Result in new opportunities or threats to managers. ◼ Often make products obsolete very quickly. ◼ Can change how we manage. ⚫Socialcultural forces: result from changes in the social or national culture of society. ◼ Social structure refers to the relationships between people and groups. ◆ Different societies have vastly different social structures. ◼ National culture includes the values that characterize a society. ◆ Values and norms differ widely throughout the world. ◼ These forces differ between cultures and over time. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-13 The Industry Life Cycle Figure 3.3 Birth Growth Shakeout Maturity Decline Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-14 ⚫Demographic forces: result from changes in the nature, composition and diversity of a population. ◼ These include gender, age, ethnic origin, etc. ◆ For example, during the past 20 years, women have entered the workforce in increasing numbers. ◼ Currently, most industrial countries are aging. ◆ This will change the opportunities for firms competing in these areas. ◆ New demand for health care, assisting living can be forecast. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-15 ⚫Political-legal forces: result from changes in the political arena. ◼ These are often seen in the laws of a society. ◼ Today, there is increasing deregulation of many state-run firms. ⚫Global forces: result from changes in international relationships between countries. ◼ Perhaps the most important is the increase in economic integration of countries. ◼ Free-trade agreements (GATT, NAFTA, EU) decreases former barriers to trade. ◼ Provide new opportunities and threats to managers. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-16 Managing the Organization Environment ⚫Managers must measure the complexity of the environment and rate of environmental change. ⚫Environmental complexity: deals with the number and possible impact of different forces in the environment. ◼ Managers must pay more attention to forces with larger impact. ◼ Usually, the larger the organization, the greater the number of forces managers must oversee. ⚫Themore forces, the more complex the manger’s job becomes. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-17 ⚫Environmentalchange: refers to the degree to which forms in the task and general environments change over time. ◼ Change rates are hard to predict. ◼ The outcomes of changes are even harder to identify. ⚫Managers thus cannot be sure that actions taken today will be appropriate in the future given new changes. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-18 Reducing Environmental Impact ⚫Managers can counter environmental threats by reducing the number of forces. ◼ Many firms have sought to reduce the number of suppliers it deals with which reduces uncertainty. ⚫Alllevels of managers should work to minimize the potential impact of environmental forces. ◼ Examples include reduction of waste by first line managers, determining competitor’s moves by middle managers, or the creation of a new strategy by top managers. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-19 Organizational Structure ⚫Managers can create new organizational structures to deal with change. ◼ Many firms use specific departments to respond to each force. ⚫Managers also create mechanistic or organic structures. ◼ Mechanistic structures have centralized authority. ◆ Roles are clearly specified. ◆ Good for slowly changing environments. ◼ Organic structures authority is decentralized. ◆ Roles overlap, providing quick response to change. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-20 Boundary Spanning ⚫Managers must gain access to information needed to forecast future issues. ◼ Rod Canion’s forecast of Compaq’s future was wrong due to his incorrect view of the environment. ⚫ Boundary spanning is the practice of relating to people outside the organization. ◼ Seek ways to respond and influence stakeholder perception. ◼ By gaining information outside, managers can make better decisions about change. ⚫ More management levels involved in spanning, yields better overall decision making. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-21 Boundary Spanning Roles Figure 3.5 Managers in boundary spanning roles feedback information to other managers Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-22 Scanning and Monitoring ⚫Environmentalscanning is an important boundary spanning activity. ◼ Includes reading trade journals, attending trade shows, and the like. ⚫Gatekeeping: the boundary spanner decides what information to allow into organization and what to keep out. ◼ Must be careful not to let bias decide what comes in. ⚫Interorganizational Relations: firms need alliances globally to best utilize resources. ◼ Managers can become agents of change and impact the environment. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  3-23 Change as a 2-way Process Figure 3.6 Change in Environment affects Environment Organization Managerial actions impact Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-24 The Global Environment Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-25 The Global Environment ⚫Inthe past, managers have viewed the global sector as closed. ◼ Each country or market was assumed to be isolated from others. ◼ Firms did not consider global competition, exports. ⚫Today’s environment is very different. ◼ Managers need to view it as an open market. ◼ Organizations buy and sell around the world. ◼ Managers need to learn to compete globally. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-26 Tariff Barriers ⚫A tariff is a barriers to trade. ◼ Tariffs are taxes levied upon imports. ◼ These seek to protect jobs in the home country. ◼ Other countries usually retaliate. ⚫Free trade: in a free trade agreement, each country seeks to specialize in things they make most efficiently. ◼ If India is more efficient in making textiles, and the USA in making computer software, then each country Irwin/McGraw-Hill should focus on these. ©The McGraw-Hill Companies, Inc., 2000  4-27 Distance & Culture Barriers ⚫The second leading cause of trade barriers. ◼ Distance closed the markets as far as some managers were concerned. ◼ Communications could be difficult. ◼ Languages and cultures were different. ⚫Duringthe last 50 years, communications and transportation technology has dramatically improved. ◼ Jet aircraft, fiber optics, satellites have provided fast, secure communications and transportation. ◼ These have also reduced cultural differences. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-28 Effects on Managers ⚫Decliningbarriers have opened great opportunities for managers. ◼ Managers can not only sell goods and services but also buy resources and components globally. ⚫Managers now face a more dynamic and exciting job due to global competition. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-29 Free Trade NAFTA: North American Free Trade Agreement. ◼ Abolishes most tariffs on goods traded between Mexico, Canada and the U.S. ◼ Allows unrestricted cross-border flows of resources. ◼ Many U.S. firms have now invested in Mexico. ⚫This is a manufacturing opportunity. ◼ Wage costs are lower in Mexico. ◼ Can serve Mexico with a plant in Mexico and reduce freight. ⚫Managers face new opportunities and threats. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-30 Global Task Environment Figure 4.2 Suppliers Forces yielding Competitors Opportunities Distributors and threats Customers Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-31 Suppliers & Distributors ⚫Managers buy products from global suppliers or make items abroad and supply themselves. ◼ Key is to keep quality high and costs low. ⚫Globaloutsourcing: firms buy inputs from throughout the world. ◼ GM might build engines in Mexico, transmissions in Korea, and seats in the U.S. ◼ Finished goods become global products. ⚫Distributors:each country often has a unique system of distribution. ◼ Managers must identify all the issues. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-32 Customers & Competitors ⚫Formerly distinct national markets are merging into a huge global market. ◼ True for both consumer and business goods. ◼ Creates large opportunities. ⚫Still, managers often must customize products to fit the culture. ◼ McDonald's sells a local soft drink in Brazil. ⚫Global competitors present new threats. ◼ Increases competition abroad as well as at home. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-33 Forces in the Global General Environment Figure 4.3 Political & Legal Systems Forces yielding Economic Sociocultural Opportunities System system and threats Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-34 Political-Legal Forces ⚫Results from diverse and changing nature of each countries’ political system. ⚫Representative democracies: such as the U.S., Britain, Canada. ◼ Citizens elect leaders who make decisions for electorate. ◼ Usually has a number of safeguards such as freedom of expression, a fair court system, regular elections, and limited terms for officials. ◼ Well defined legal system and economic freedom. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-35 ⚫Totalitarian regimes: a single political party or person monopolize power in a country. ◼ Typically do not recognize or permit opposition. ◼ Most safeguards found in a democracy do not exist. ◼ Examples include Iran, Iraq, and China. ⚫These are difficult to do business with given the lack of economic freedom. ⚫Further, human rights issues also cause managers to avoid dealing with these countries. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-36 Economic Systems ⚫Freemarket economy: production of goods and services is in private ownership. ◼ Production is dictated by supply and demand. ⚫Command economy: decisions on what to produce, how much, done by the government. ◼ Most command economies are moving away from the command economy. ⚫Mixedeconomy: certain economic sectors controlled by private business, others are government controlled. ◼ Many mixed countries are moving toward a free enterprise system. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-37 Recent Trends ⚫Currentshift away from totalitarian dictators toward democratic regimes. ◼ Very dramatic example seen in the collapse of the former Soviet Republic. ◼ Also very pronounced in Latin America and Africa. ⚫Withthis shift, has come a strong movement toward free market systems. ◼ This provides great opportunities to business managers on a global level. ◼ Many businesses are investing millions in former totalitarian countries to seize these opportunities. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-38 Changing Political and Figure 4.4 Economic Forces Democratic Britain Britain 1985 1995 Russia 1995 Hungary 1995 Political Freedom Hungary 1985 China Russia China 1995 Totalitarian 1985 1985 Command Mixed Market Economic Freedom Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-39 Sociocultural Forces ⚫National culture: includes the values, norms, knowledge, beliefs, and other practices that unite a country. ⚫Values: abstract ideas about what a society believes to be good, desirable and beautiful. ◼ Provides attitudes for democracy, truth, appropriate roles for men, and women. ◼ Usually not static but very slow to change. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-40 ⚫Norms: social rules prescribing behavior in a given situation. ◼ Folkways: routine social conventions including dress codes and manners. ◼ Mores: Norms that are central to functioning of society. much more significant that folkways. ◼ More examples include theft, adultery, and are often enacted into law. ⚫Norms vary from country to country. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-41 Hofstede’s Model of National Culture Individualism Collectivism Low Power High Power Distance Distance Figure 4.5 Achievement Nurturing Oriented Oriented Low Uncertainty High Uncertainty Avoidance Avoidance Short Term Long Term Orientation Orientation Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-42 Individualism v. Collectivism ⚫Individualism: world view that values individual freedom and self-expression. ◼ Usually has a strong belief in personal rights and need to be judged by achievements. ⚫Collectivism: world view that values the group over the individual. ◼ Widespread in Communism. ◼ Prevalent in Japan as well. ⚫Managers must understand how their workers relate to this issue. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-43 Power Distance ⚫Asociety’s acceptance of differences in the well being of citizens due to differences in heritage, and physical and intellectual capabilities. ◼ In high power distance societies, the gap between rich and poor gets very wide. ◼ In low power distance societies, any gap between rich and poor is reduced by taxation and welfare programs. ◆ Most western cultures (U.S., Germany, United Kingdom) have relatively low power distance and high individualism. ◆ Many economically poor countries such as Panama, Malaysia have high power distance and low individualism. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-44 Achievement vs Nurture ⚫Achievement oriented societies value assertiveness, performance, success. ◼ The society is results-oriented. ⚫Nurturing-oriented value quality of life, personal relationships, service. ⚫The U. S. and Japan are achievement- oriented while Sweden, Denmark are more nurturing-oriented. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-45 Uncertainty Avoidance Societies and people differ on their willingness to take on risk. ⚫Low uncertainty avoidance (U.S., Hong Kong), value diversity, and tolerate differences. ◼ Tolerate a wide range of opinions and beliefs. ⚫High uncertainty avoidance (Japan and France) are more rigid and do not tolerate people acting differently. ◼ High conformity to norms is expected. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-46 Long Term Outlook ⚫Long-term outlook is based on values of saving, and persistence. ◼ Taiwan and Hong Kong are cultures that are long -term in outlook. ⚫Short-term outlook seeks the maintenance of personal stability or happiness right now. ◼ France and the U. S. are examples of this approach. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-47 International Expansion ⚫Importing and Exporting: the least complex method of expansion. ◼ Exporting: firm makes products and sells abroad. ◼ Importing: firm sells products made abroad. ⚫Licensing: firm allows foreign organization to make and distribute goods for a fee. ◼ Helps the home firm since it does not have to set up a complete production and distribution network. ⚫Franchising: company sells a foreign organization the rights to use brand name and know-how in return for payment and profit percentage. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-48 International Options ⚫StrategicAlliances: managers pool resources with a foreign firm and both organizations share the rewards and risks. ◼ Allows firm to maintain control which is a problem with exporting, licensing, and franchising. ⚫Wholly-owned foreign subsidiary: firm invests in production operations in a foreign country. ◼ Many Japanese auto firms have done this in the U.S. ◼ This is very expensive but can yield high returns. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-49 International Expansion Wholly- Importing Licensing Joint Ventures owned For. Exporting Franchising Strat. Alliances Subsidiary Low Level of Foreign involvement and investment High needed by a global organization Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-50 Ethics, Social Responsibility, and Diversity Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-51 Ethics and Stakeholders ⚫Stakeholders: people or groups that have an interest in the organization. ◼ Stakeholders include employees, customers, shareholders, suppliers, and others. ◼ Stakeholders often want different outcomes and managers must work to satisfy as many as possible. ⚫Ethics: a set of beliefs about right and wrong. ◼ Ethics guide people in dealings with stakeholders and others, to determine appropriate actions. ◼ Managers often must choose between the conflicting interest of stakeholders. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-52 Ethics It is difficult to know when a decision is ethical. Here is a good test: Managerial ethics: If a manager makes a decision falling within usual standards, is willing to personally communicate the decision to stakeholders, and believes friends would approve, then it is likely an ethical decision. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-53 Ethical Models Figure 5.2 Social Ethics: Legal rules, customs Organization’s Code of Ethics Professional Ethics: Individual Ethics: Values in workplace Family influence Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-54 Ethical Origins ⚫Societal Ethics: standards that members of society use when dealing with each other. ◼ Based on values and standards found in society’s legal rules, norm, and mores. ◼ Codified in the form of law and society customs. ◼ Norms dictate how people should behave. ⚫Societal ethics vary based on a given society. ◼ Strong beliefs in one country may differ elsewhere. ◼ Example: bribes are an accepted business practice in some countries. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-55 Ethical Origins ⚫Professional ethics: values and standards used by groups of managers in the workplace. ◼ Applied when decisions are not clear-cut ethically. ◼ Example: physicians and lawyers have professional associations that enforce these. ⚫Individual ethics: values of an individual resulting from their family& upbringing. ◼ If behavior is not illegal, people will often disagree on if it is ethical. ◼ Ethics of top managers set the tone for firms. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-56 Ethical Decisions ⚫A key ethical issue is how to disperse harm and benefits among stakeholders. ◼ If a firm is very profitable for two years, who should receive the profits? Employees, managers and stockholders all want a share. ◼ Should we keep the cash for future slowdowns? What is the ethical decision? ⚫What about the reverse, when firms must layoff workers. ⚫Final point: stockholders are the legal owners of the firm! Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-57 Ethical Decisions ⚫Some other issues managers must consider. ◼ Should you hold payment to suppliers as long as possible to benefit your firm? ◆ This will harm your supplier who is a stakeholder. ◼ Should you pay severance pay to laid off workers? ◆ This may decrease the stockholder's return. ◼ Should you buy goods from overseas firms that hire children? ◆ If you don’t the children might not earn enough money to eat. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-58 Why Behave Ethically? ⚫Managersshould behave ethically to avoid harming others. ◼ Managers are responsible for protecting and nurturing resources in their charge. ⚫Unethicalmanagers run the risk for loss of reputation. ◼ This is a valuable asset to any manager! ◼ Reputation is critical to long term management success. ◼ All stakeholders are judged by reputation. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-59 Social Responsibility ⚫Social Responsibility: the manager’s duty to nurture, protect and enhance the welfare of stakeholders. There are many ways managers respond to this duty: ⚫Obstructionist response: managers choose not to be socially responsible. ◼ Managers behave illegally and unethically. ◼ They hide and cover-up problems. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-60 ⚫Defensive response: managers stay within the law but make no attempt to exercise additional social responsibility. ◼ Put shareholder interest above all other stakeholders. ◼ Managers say society should make laws if change is needed. ⚫Accommodative response: managers realize the need for social responsibility. ◼ Try to balance the interests of all stakeholders. ⚫Proactiveresponse: managers actively embrace social responsibility. ◼ Go out of their way to learn about and help stakeholders. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-61 Levels of Responsibility Figure 5.3 Obstruction Defensive Accommodative Proactive response response response response Low High Social responsibility Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-62 Why be Responsible? ⚫Managers gain advantages by being responsible. ◼ Workers and society benefit. ◼ Quality of life in society will improve. ◼ It is the right thing to do. ⚫Whistleblowers: a person reporting illegal or unethical acts. ◼ Whistleblowers now protected by law in most cases. ⚫Socialaudit: managers specifically take ethics and business into account when making decisions. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-63 Promoting Ethics ⚫There is evidence showing that ethical managers benefit over the long run. ⚫Ethical Control System: a formal system to encourage ethical management. ◼ Firms appoint an ethics ombudsman to monitor practices. ◼ Ombudsman communicates standards to all employees. ⚫Ethical culture: firms increasingly seek to make good ethics part of the norm and organizational culture. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-64 Managing Diverse Workforces ⚫Theworkforce has become much more diverse during the last 30 years. ◼ Diversity refers to differences among people such as age, gender, race, religion. ◼ Diversity is an ethical and social responsibility issue. ⚫Managers need to give all workers equal opportunities. ◼ Not following this is against the law and unethical. ◼ When all have equal opportunity, the organization benefits. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-65 Types of Diversity Figure 5.5 Capabilities Disabilities Age Socioeconomic Gender background Sexual orientation Race Religion Ethnicity Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-66 Manage Diversity ⚫Distributive Justice: dictates members be treated fairly concerning pay raises, promotions, office space and similar issues. ◼ These rewards should be assigned based on merit and performance. ◼ A legal requirement that is becoming more prevalent in American business. ⚫Procedural Justice: Managers should use fair practices to determine how to distribute outcomes to members. ◼ This involves how managers appraise worker performance or decide who to layoff. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-67 Diversity Makes Business Sense ⚫Diverse employees provide new, different points of view. ◼ Customers are also diverse. ⚫Still, some employees may be treated unfairly. 1. Biases: systematic tendencies to use information in ways that result in inaccurate perceptions. 2. People often view those like themselves positively and have biases about others. 3. Social status is a type of bias conferred to people of differing social position. 4. Stereotypes: inaccurate beliefs about a given group. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-68 How to Manage Diversity 1. Increase diversity awareness: managers need to become aware of their own bias. 2. Understand cultural differences and their impact on working styles. 3. Practice effective communication with diverse groups. 4. Be sure top management is committed to diversity. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-69 Sexual Harassment ⚫Damages both the person being harassed and the organization. ◼ Both men and women can be victims. ⚫Quid pro quo harassment: victim is requested to perform sexual favors to keep a job or win promotion. ⚫Hostile work environment harassment: Some members are faced with a hostile, intimidating work environment. ◼ Lewd jokes, pornographic displays and remarks. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-70 Avoiding Harassment ⚫Develop and communicate a sexual harassment policy. ◼ Point out that these actions are unacceptable. ⚫Set up a fair complaint system to investigate allegations. ◼ If there are problems, correct them at once. ⚫Provide harassment training to employees and managers. Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000  4-71 Forum In Malaysia, as in many multicultural societies, attitudes toward risk and uncertainty vary across different cultural groups. Some may be more open to diversity and differing opinions, while others may prefer adherence to established norms. Discuss how cultural attitudes toward uncertainty avoidance influence management practices in Malaysia. How do managers in Malaysia balance the need for innovation and flexibility with the expectations for conformity to cultural norms? Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 QUESTION & ANSWER