Week 4 Management and Financial Wellbeing PDF

Introduction to Business Management (MGMT1281) Vurain Tabvuma  Session Outline Management and Financial Wellbeing Capitalism and Economics Approaches to jobs, goods and services, and profits  3 Important Things!!!!! Ask me questions! Happy to meet with you! A...

Introduction to Business Management (MGMT1281) Vurain Tabvuma  Session Outline Management and Financial Wellbeing Capitalism and Economics Approaches to jobs, goods and services, and profits  3 Important Things!!!!! Ask me questions! Happy to meet with you! Ask me questions!!! Management and Financial Wellbeing  Capitalism and Economics We learn about this to improve critical thinking, current state of affairs reflects historical choices, understanding how we are today can inform how we can make a different future. Capitalism  Capitalism Emphasis on rewarding on rewarding entrepreneurs for profitably combining resources in ways that create valued goods and services. Economics Economics Understanding how goods and services are produced, distributed and consumed. Types of Capitalism Documentational capitalism emphasizes detailed contracts, public financial reports, management independence and rights, stringent anti-trust legislation, rewarding a labor force that is mobile and has transferable skills, short-term maximization of financial performance, and the use of stock options to motivate managers Relational capitalism emphasizes relational contracts, the long-term reputation and financial performance of organizations, employee rights, satisfying the needs of many different stakeholder groups, and investment in developing the skills of employees Economics Acquisitive economics refers to the management of property and wealth to maximize the short-term monetary value for owners Sustenance economics refers to managing property and wealth to increase the long-term overall well-being for owners, members, and other stakeholders Models of the Economy  Discussion Given our understanding of the corporate model of the economy, how do you think the three different approaches to management differ in their approach to jobs?  Economic Well-being in High Income Setting - Jobs FBL Management More jobs being created now than ever before  Economic Well-being in High Income Setting - Jobs TBL Management Also considers social and ecological impact of jobs, e.g. inequality Concern that low quality of jobs/pay will decrease performance  Economic Well-being in High Income Setting - Jobs SET Management Concerned about impact of income inequality: crime, health… Creating jobs for people in need  Economic Well-being in High Income Setting - Jobs SET Management Living wage - means earnings are adequate pay for the basic amenities of life, including adequate housing, food, clothing, education, and health care  Economic Well-being in High Income Setting – Goods and Services FBL management: - Gross Domestic Product is increasing - GDP measures the total financial value of all the goods and services produced within a country TBL management: - Produce goods and services that increase profits and decrease negative social and ecological externalities (e.g., solar power) SET management: - Don’t produce more goods than the planet can sustain If: “Growth is a substitute for equality of income” Then: “Greater equality of income is a substitute for growth.”  Economic Well-being in High Income Setting – Profits FBL management: - Corporate profits steadily increasing - Financial sector accounts to 60% of all profit in USA TBL management: - Can grow profits by reducing negative social and ecological externalities (e.g., less packaging, LED lighting) SET management: - Genuine profit refers to the difference between an organization’s financial expenses and its financial revenues after taking into account its socio-ecological externalities. SET management seek profits that enhance the Genuine Progress Indicator (e.g., promote income equality, reduce crime, reduce pollution, enhance leisure time)  Economic Well-being in High Income Setting – Profits SET Management: Genuine Progress Indicator (GPI) measures quality of life based on: Income distribution Crime Resource depletion Pollution Long-term environmental damage Leisure time  Economic Well-being in Global Setting – Jobs FBL management: - Associated with globalization, free trade, and “a rising tide raises all boats” TBL management: - People want secure jobs to provide families with food, clothing and education; providing such jobs can increase profits SET management: - Promotes creating of jobs based fair trade principles which seek to ensure that workers in low-income countries are paid a fair price for the products they produce  Economic Well-being in Global Setting – Goods and Services FBL management: - International trade can help people in low-income countries. Free trade reduces subsidies, tariffs, and quotas TBL management: - Businesses should increase their sales by targeting the “Base of the Pyramid” (BoP) thus enable BoP to participate in the global economy, e.g. M-Pesa SET management: - Permit low-income countries to use tariffs/subsidies/quotas to strengthen their local economies (today 95% of the economic benefits of globalization go to the richest 5% of the world)  Economic Well-being in Global Setting – Profits FBL management: - Promote free flow of money (global corporate profits rose from 7.6% to 9.8% of global GDP from 1980 to 2013) TBL management: - Promote initiatives like the UN Global Compact, which helps firms to increase profits responsibly SET management: - Challenges practices that increase income disparity such as derivatives trading; rather, supports initiatives like the Tobin Tax and Socially Responsible Investing Next Steps Week 4 Task List Brightspace Thank you!