Chapter 2 Quiz - PDF

The Changing Environment of Organizations Figure 2.1 The Changing Environment of Business The changing environment of business presents both opportunities and challenges for managers today. Five important environmental forces are: Globalization (how it affects the organization), Diversity, Technol...

The Changing Environment of Organizations Figure 2.1 The Changing Environment of Business The changing environment of business presents both opportunities and challenges for managers today. Five important environmental forces are: Globalization (how it affects the organization), Diversity, Technology, Ethics and Corporate governance and New employment relationships. Diversity: Inequality- Unequal access to opportunities. Equality- Evenly distributed tools and assistance. Equity- Custom tools that identify and address inequality. (more effort there is more incentives) Justice- Fixing the system to offer equal access to both tools and opportunities. Types of Diversity: Diversity - the variety of observable and unobservable similarities and differences among people. Surface-level diversity - Observable differences in people, including race, age, ethnicity, physical abilities, physical characteristics, and gender. Deep-level diversity - individual differences that cannot be seen directly, including goals, values, personalities, decision-making styles, knowledge, skills, abilities and attitudes. (These “invisible” characteristics in others take more time to learn about, but can have stronger effects on group and organizational performance). Other within-group diversity that reflect different types of Deep-level diversity: Intersectionality - simultaneous membership in more than one demographic category. Separation diversity - differences in position or opinion among group members reflecting disagreement or opposition—dissimilarity in an attitude or value, for example,  especially with regard to group goals or processes. (Basically, people separate or stereotype where u stand) Variety diversity - differences in a certain type or category, including group members' expertise, knowledge, or functional background. (If everything mostly same, variety is less, workforce is homogenous than diverse) Disparity diversity - differences in the concentration of valuable social assets or resources—dissimilarity in rank, pay, decision-making authority, or status. E.g. *Salary grades = If rank & file, IT assistant (if 2nd yr college, let's give 6k entry lvl, if HR assistant it graduates USC w dl and has internship etc., so have 10k. But if supervisors that'll fall for 30-40k. Manager level is 100k-200k) same skills ish but disparity is still high.* Trends in Diversity *Diversity, Equity and Inclusion* By 2060, the total population is forecast to grow from 282.1 million in 2000 to 404 million. Changes in the workforce and the population in general are toward greater diversity. Talent shortages are forecast to rise globally. Population is ageing; age diversity in workforce is increasing Effective diversity management plays a role in attracting and retaining talent. By being as inclusive as possible organizations can attract, retain, and capitalize on abilities of high-talent people, regardless of their age, gender, ethnicity or religion. Today’s war for talent is global making recruiting and retaining a diverse workforce a more competitive business issue than ever. Figure 2.2: Percent of Age Groups Employed in 2021 - The U.S. labor force includes people from a wide array of age groups. As this graph illustrates, almost 62% of those aged 55-64 are still working, while 18% of those aged 65 or older continue to work. Extra: Generational Differences: Age-based diversity is a major issue facing many organizations today. (Today’s workforce is characterized in terms of four generational groups according to their range of birth years) Today's workforce is characterized in 5 generational groups: - Silent Generation (1928-1945) - Baby Boomers (1946-1964) - Generation X or Xennial Generation (1965-1980) - Generation Y or Millennials (1981-1996) - Generation Z (1997-2009) - Generation Alpha (Born after 2010-2024) - Older workers may have better job performance but need mentoring to adopt new technology (Society for Human Resource Management’s survey found that with 500 or more employees, 58% of HR professionals reported conflict between younger and older workers, largely due to their different perceptions of work ethics and work-life balance). - Age tends to be positively related to job performance. - Age was negatively associated with learning scores in an open learning program for managerial skills. - Older trainees demonstrated lower motivation, reduced learning, and less post-training confidence in comparison to younger trainees. - ^Suggests age has a negative relationship with learning and part of its influence may be due to motivation. This could be because speed of processing slows as age increases. - ^However, this does not apply to everyone. - Increasing conscientiousness and knowledge counteract some of the negative effects of ageing. - Older workers may not participate in learning and development activities, due to decline in confidence in their skills. Older adults may benefit from self-paced learning environments, which may allow additional time. Additionally, confidence-boosting interventions can help to address negative effects of anxiety and reduced confidence. Some organizations use reverse mentoring (pairing senior employee with junior employee, transferring skills of junior employee to senior employee) to bridge  generational differences and transfer the technology skills younger workers bring to the workplace to more senior employees. As managers, diversity awareness will enable us to hire, retain, and engage the best talent, which will help to maximize the organization’s performance. Diversity also fosters greater creativity and innovation. The Business Case for Diversity: Diversity fosters greater creativity and innovation. Organizational performance increases when employees have a positive attitude toward diversity. Diversity contributes to a firm’s competitive advantage when it enables all employees to contribute their full talents and motivation to the company. Managing diversity brings out the best in all employees, allowing each of them to contribute maximally to the firm’s performance in an increasingly competitive business environment. Diversity can be a source of sustained competitive advantage for organizations. Culturally diverse teams make better decisions over time than homogeneous ones. Women in top management results in more innovation. Title VII (7) of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex or national origin. Other law offer protection to additional groups, including employees with disabilities and workers over the age of forty. *Reality, Equality (same tools regardless tall or short), Equity (tools given based on their needs and are more specific to needs of employment), Justice, Inclusivity (apil sa game na like sa e.g. shown sa tv.)* Table 2.2 Barriers to Inclusion: ***EXAMS MUGAWAS NI The "Like Me" Bias = People prefer to associate with others they perceive to be like themselves (consciously or unconsciously). Stereotypes = A belief about an individual or a group based on the idea that everyone in a particular group will behave the same way or have the same characteristics (labelling people). *Stereotypes can reduce inclusion opportunities for minorities, women, persons with disabilities, and both younger and older workers. *Stereotypes are harmful because they result in judgements about an individual based solely on his/her being part of a particular group, regardless of actual unique identity. Prejudice = Outright bigotry or intolerance for others groups  *bigotry - obstinate or intolerant devotion to one's own opinions and prejudices *even if organization has strong commitment to inclusion, possible that beliefs and actions of individual employees or managers are inconsistent with the organization’s policies and values. *can be reduced by selecting and training managers and employees, evaluating their inclusion behaviors, and tracking promotion rates of members of different groups who work for different supervisors. Perceived threat of loss = If some employees perceive a direct threat to their own career opportunities, they may feel that they need to protect their own prospects by impeding diversity efforts. *Can influence employees’ willingness to help minority employees, recruit diverse candidates for a position, and support diversity initiatives. Ethnocentrism = The belief that one’s own language, native country, and cultural rules and norms are superior to all others. *Less to do with prejudice, more to do with inexperience or ignorance about other people and environments. *Education and experiences that promote greater cross-cultural awareness can foster a conscious effort to value and promote cultural diversity. Unequal access to Organizational Networks = Women and minorities are often excluded from informal organizational networks, which can be important to job performance, mentoring opportunities, and being seen as a candidate for promotion. *(Diversity= make them effective in what they do)* Managing Diversity, Equity and Inclusion (most important element in leveraging positive potential of diversity): Top management support for diversity and for diversity initiatives. *If top managers do not promote inclusion and respect diversity, lower-level managers and employees are not likely to do so either. *An inclusive environment is created when all employees’ cultural awareness and empathy are enhanced through diversity and all employees given equal access to mentors. One technique to promote diversity awareness and inclusion- Reciprocal mentoring: Matches senior employees with diverse junior employees to allow both individuals to learn more about a different group. Other than that, some organizations use career development programs, networking opportunities, and mentoring programs for all employees to promote diversity. Older adults may benefit from self-paced learning environments and confidence-boosting intervention.  It is not realistic to claim or to pursue an "I'm totally unbiased" stance with regard to diversity. Globalization and Business: *(Impact of globalization to organizations)* Globalization - the internationalization of business activities and the shift toward an integrated global economy/environmental factor that affects OB. (internationalisation of business activities) Trends in Globalization: Factors increasing globalization (Four major accounts for much of growth in international trade): Advances in communication and transportation. (Easier to conduct international business today). Businesses have expanded internationally to increase their markets. Control of labor, distribution and distribution costs. (More firms are moving into international markets to control costs, especially to reduce labor costs. In searching for lower labor costs, some companies have discovered well-trained workers and built more efficient plants that are closer to international markets). Increased international competition (Many organizations have become international in response to competition). Cultural Competence: - the ability to interact effectively with people of different culture. Culture - The set of shared values, often taken for granted, that help people in a group, organization, or society understand which actions are considered acceptable and which are deemed unacceptable. Four components of cultural competence: Awareness of our cultural worldview and reactions to people who are different. Our attitude toward cultural differences. Knowledge of different worldviews and cultural practices. Cross-cultural skills (includes nonverbal communication) Developing this skill requires examining our prejudices and biases, actively developing cross-cultural skills, learning from role models, and having a positive attitude about cultural issues. The key to cross-cultural success is awareness. Cross-Cultural Differences and Similarities: General observation: Cultural and national boundaries may not coincide. Behavior in organizational settings varies across cultures. Behavior patterns are also likely to be wide-spread and pervasive within an organization. Culture is one major cause of this variation. Organizations and the way they are structured appear to be growing increasingly similar (managerial practices at a general level may be becoming more alike, but people who work within organizations still differ markedly). The same individual behaves differently in different cultural settings. Cultural diversity can be an important source of synergy in enhancing organizational effectiveness. *synergy - combined power of a group of things when they are working together that is greater than the total power achieved by each working separately. Specific Cultural Issues: - Attitudes and behaviors differ significantly because of values and beliefs that characterize different countries (Geert Hofstede). Hofstede's Dimensions of Culture: Individualism - Exists to the extent that people in a culture define themselves primarily as individuals rather than as part of one or more groups or organisations. Collectivism - Characterized by tight social frameworks in which people tend to base their identities on the group or organization to which they belong. Power distance (also orientation to authority) - Extent to which people accept as normal an unequal distribution of power. Uncertainty avoidance (also preference for stability) - Extent to which people feel threatened by unknown situations and prefer to be in clear and unambiguous situations. Masculinity (also assertiveness or materialism) - Extent to which the dominant values in a society emphasize aggressiveness and the acquisition of money and other possessions as opposed to concern for people, and overall quality of life. Long-term values - Include focusing on the future, working on projects that have a distant payoff, persistence, and thrift. Short-term values - More oriented toward the past and the present and include respect for traditions and social obligations. Table 2.3 Work-Related Differences in 10 Countries Important takeaway: People from diverse cultures value things differently from each other and that people need to take these differences into account as they work. Global Perspective: A global perspective is distinguised by - A willingness to be open to and learn from the alternative systems and meanings of other people and cultures and a capacity to avoid assuming that people from everywhere are the same. *A person with a global perspective scans the world from a broad view, always seeking unexpected trends and opportunities, accepting life as a balance of conflicting forces. Given globalization trends and the multicultural nature of the U.S. workforce, managers increasingly need a global perspective and a supportive set of skills and knowledge to be most effective (To meet this need, most business schools are increasing their efforts to develop students’ global managerial skills). *Competitive advantage: an edge over others Technology & Business: Technology - refers to the methods used to create products, including both physical goods and intangible services. Three specific areas of technology affecting businesses today: Shift toward a service-based company (service-based company must be based on the customers and how u can adapt to their needs) Growing use of technology for competitive advantage (companies now will need technology to make sure they can keep up with the trend). Mushrooming change in information technology. E.g. Mobile Company Phone (HQ in China) need Operations, Sales Management, IT, Research & Development Department, Distribution & Logistics Manufacturing and Service Technologies: (MIGHT COME OUT IN EXAM)  Manufacturing - a form of business that combines and transforms resources into tangible outcomes that are then sold to others. - Manufacturing was once the dominant technology in US. Service organization - one that transforms resources into an intangible output and creates time or place utility for its customers. - Experiencing tremendous growth even as the manufacturing sector declines. - Service-oriented businesses need to recruit and train employees to take on a variety of roles as they interface with the business’s customers. Employees need to be capable of functioning in many different situations. - Managers have come to see that many of the tools, techniques, and methods that are used in a factory are also useful to a service firm. - Service-based firms must hire and train employees with a different skill set than is required by most manufacturers. Technology and Competition: Maintaining a leadership position: technology is the basis of competition for some firms. Coping with decreasing cycle times (the time it takes a firm to accomplish some recurring activity or function from beginning to end, e.g. making deliveries, processing credit payments) Businesses can be more competitive if they can systematically decrease cycle times. Hence, many companies now focus on decreasing cycle times in areas ranging from developing products to making deliveries and collecting credit payments. The speedier process allows them to more quickly respond to changing economic conditions, consumer preferences, and new competitor products while recouping their product-development costs faster. Information technology and social media: - Advantages: Breakthroughs in information technology have resulted in leaner organizations and more flexible operations, increased collaboration, more flexible work sites, and improved management processes and systems. - Disadvantages: Less personal communication, less "down time," an increased sense of communication and decision-making urgency (changes that have not necessarily always been beneficial). Ethics and Corporate Governance: Ethics - a person's beliefs regarding what is right or wrong in a given situation. Framing Ethical Issues: Most ethical dilemmas faced by managers relate to how organization treats its employees, how employees treat the organization, and how employees and organizations treat other economic agents. Framing ethical issues relates to: Treatment of employees (hiring, firing, wages, working conditions, respect, privacy) How employees treat the organization Treatment of economic agents (customers, competitors, stockholders, suppliers, dealers, unions) Variations in ethical and legal business practices across countries How an Organization Treats Its Employees: One important area of managerial ethics is treatment of employees by organization (includes policies such as hiring, firing, wages, working conditions, respect, privacy). - E.g. Discriminating against african americans in hiring is unethical and illegal behavior. Hires a family friend when other applicants are as or more qualified. Manager paying employee less than deserved as manager know employee can’t afford quitting or risk losing his job by complaining. *organization is obligated to protect privacy of employees.) How Employees Treat the Organization: Numerous ethical issues stem from how employees treat the organization, especially in regard to conflicts of interest, secrecy and confidentiality, and honesty. A conflict of interest occurs when a decision potentially benefits the individual to possible detriment of organization. To guard against such practices, most companies have policies that forbid their buyers to accept gifts from suppliers. Divulging company secrets is also clearly unethical. A third area of concern is honesty (sometimes use work stuff for personal use, or lie about being sick or need time for personal needs when not). How Employees and the Organization Treat Other Economic Agents: Managerial ethics also come into play in rs between the firm and its employees with other economic agents. The interactions between the organization and these agents may be subject to ethical ambiguity include advertising and promotions, financial disclosures, ordering and purchasing, shipping and solicitations, bargaining and negotiation and other business rs. Managerial Ethics Figure 2.3 Managers face a variety of ethical situations. In most cases these situations involve how the organisation treats its employees, how employees treat the organization, and how employees and organizations treat other economic agents. *Shareholders - Interest in the company so hold shares like state revenue....* *Stakeholders - Customers, Suppliers, anyone who has interest in the process or business, employees* *Ethics give boundaries and protect human rights. *How to pay careful attention when it comes to employees - how they hire, fire, terminate, etc.* Ethical Issues in Corporate Governance: Corporate governance - refers to the oversight of a public corporation by its board of directors. Proper management of business in the best interests of shareholders and other stakeholders Independence of the board from the business *The board of public corporation is expected to ensure that the business is being properly managed and that the decisions made by its senior management are in the best interests of shareholders and other stakeholders. *Biggest complaint is board independence. While board members need to have some familiarity with both firm and industry in order to function effectively, also need to have sufficient independence to carry out oversight function. Ethical Issues and Information Technology: (Another set of issues emerged in recent times involves information technology). Individual rights to privacy and the potential abuse of information technology by companies (Individuals who register at many online sites are often asked to list their date of birth and other details, or asked for personal information) *Legislators tryna protect customer rights* Corporate Social Responsibility: - Businesses living and working together for the common good and valuing human dignity. (outreach programs, promoting fitness activities, charity events can lead to, in terms of managing..., waste management in company, aligned w scr also) Corporate sustainability - when social responsibility issues involve the creation of a “green” strategy intended to protect natural environment. - Organizations are interested in balancing financial performance with employees’ quality of life and improving local community and broader society. Businesses being responsible to be good citizens: Can help a firm attract the best talent. Customers increasingly favor companies that do the right. To have lasting effects, social responsibility efforts should be integrated into the culture of the organization. - Social responsibility supporters believe that ethical behavior is more profitable and more rational, and crucial for effectiveness of business organizations. - Corporate sustainability initiatives can be top-down, with someone in a position of authority dictating to managers and employees what to do. - CS can also be grassroots, with employees identifying projects and taking the initiative to organize their own activities. - The International Organization for Standardization (ISO) has created a variety of standards that help organizations gain international acceptance of their practices and outcomes. ISO also publishes management standards including those for leadership, customer focus, involvement of people, and continual improvement, which help managers meet their environmental and social responsibility objectives. New Employment Relationships (significant area for environmental change): The Management of Knowledge Workers (e.g. teachers, nurses being sent out): Knowledge workers (tend to work in high-technology firms and usually experts in some abstract knowledge base) - Those employees who add value in an organization simply because of what they know. How well these employees are managed is seen as major factor in determining which firms will be successful in the future. Some employees add value in an organization simply because of what they know. E.g. comp scientists, physical scientists, engineers, product designers Even after knowledge workers are on job, retraining and training updates are critical so skills do not become obsolete (out of date). Failure to update required skills will result in organization’s losing competitive advantage and increase likelihood of knowledge worker going to another firm that is more committed to updating those skills.  Unique working arrangements and performance motivation requirements - Autonomous work, strong identification with professional standard, and continual updating of skills - Specifically (individually) tailored compensation packages - Growth opportunities, profit sharing, less bureaucracy. (Most firms employing these workers, has tendency to reduce number of levels of organization to allow knowledge workers to react more quickly to external environment). Outsourcing and Offshoring: Outsoursing - the practice of hiring other firms to do work previously performed by the organisation itself; when this work is moved overseas, it is often called Offshoring. Advantages of outsourcing: - Helps firms to focus on core activities and avoid getting sidetracked by secondary activities. - Lowers labor costs through exportation of work. - Outsourcing makes good business sense in areas highly unrelated to firm’s core business activities. Disadvantages of outsourcing: - Disaffected employees: out-of-job workers are used to train the newly hired foreign replacements - Reduction of domestic job opportunities (jobs that perform work in or for a private household or households. They provide direct and indirect care services, and as such are key members of the care economy). Offshoring - Outsourcing to workers in another country, in order to lower labor costs. Advantages of offspring include: - Lower labor costs. Disadvantages of offspring: - Results in loss of jobs in home country - Controversial issue Temp and Contingent Workers (using this is another trend that impact employment relationships in business): Contingency worker (workers usually on standby, waiting for companies to call them) - a person who works for an organization on something other than a permanent or full-time basis. Categories of contingent workers include: Independent contractors, on-call workers, temporary employees (usually hired through outside agencies), and contract and leased employees. Another category is part-time workers (less expensive than adding permanent staff, and provide greater flexibility). Some can’t find traditional job, while some value the flexibility that often accompanies a nontraditional job. Managing these workers are not always straightforward, from a behavioral perspective. Tiered workforce - When one group of an organization’s workforce has a contractual arrangement with the organization objectively different from another group performing the same jobs. *Contractual e.g. contracted on a date to do a certain job, and once done wala na.* The Changing Nature of the Psychological Contract: (MIGHT COME OUT EXAM) Psychological Contract - A person's set of expectations regarding what he or she will contribute to an organization and what the organization, in return, will provide to the individual (Unwritten agreement about expectations between an organization and its employees). - Individuals contribute effort, skills, abilitiy, time, loyalty. - Organizations provide inducements in the form of tangible/intangible rewards. Figure 2.4 - Psychological contracts govern the basic relationship between people and organizations. Individuals contribute to such things as effort and loyalty. In turn, organizations offer such inducements as pay and job security. - Essential nature of psychological contract: Individuals contribute efforts, skills, abilitiy, time, and loyalty to the organization. - Organizations provide inducements in the form of tangible (pay and career opportunities), and intangible rewards (job security and status). - If either party sees an inequity in contract. Employee might ask for pay raise or promotion, put forth less effort, look for a better job elsewhere. Organization can also initiate change by training the worker to improve his skills, transferring him to another job, or by firing him. - Organizations want value from their employees, and need to give employees right inducements (underpaid employees may perform poorly/leave for better jobs. May also steal organizational resources as way to balance psychological contract). - Overpaying employees who contribute little to organization, incurs unnecessary costs. - New forms of inducements: additional training opportunities and increased flexibility in working schedules. - Increased globalization of business also complicates the management of psychological contracts. E.g. array of inducements that employees deem to be of value varies across cultures. - Related problem faced by international businesses is management of psychological contracts for expatriate (a person who lives outside their native country) managers (more like a formal contract). - Managers selected for foreign assignment are usually given estimate duration of assignment and receive various adjustments in their compensation package. When assignment is over, manager must be integrated back into domestic organization. During time of assignment, organization may have changed in many ways. Hence, returning managers may come back to an organization that is quite different from before and a job different from what they expected.