Management Test 1 Review Packet 1/19/10 Chapter 1- Management for Turbulent Times Management The attainment of organizational goals In an effective and efficient manner Through planning, organizing, controlling, and leading Planning- where do you want to go? Defines where you want to be in the future What do you do? What are your goals? (need to understand what you are as a company) Organizing- how you will accomplish the plan Grouping tasks = departments Assigning jobs to people Resource allocation How do we coordinate things to get everything done in an effective way? Controlling-making sure you are on track Making sure that things are systematic Procedures and rules Measuring performance Making sure that we are moving towards the goals Leading Influence to motivate people Leading=using power, building effective relationships Management hierarchy Top managers- people who are responsible for the direction and the activities of the company Include CEOS and VP Middle Managers- shape direct different divisions and companies of the corporation Non managerial Employees- make the good and service and distribute the product Skills for effective managers Need conceptual skills, human skills, technical skills Use of skills More conceptual at top More technical at the actual production level The manager?s job-effectively is a very tough job Lots of variety Fragmentation Interruptions are the job Managing the unexpected-happens daily Stay calm Be visible People before business Tell the truth Know when to get back to business Manager?s job Deal in information Work with people Make decisions New World of Management Technology Globalization Diversity of US workforce New ways of thinking about business and management Traditional Mindset Tight top-down control Employee separation and specialization Measurement by impersonal measurements and analysis (Analysis Paralysis-analyze problems) Things Change Global competition Cutbacks, layoffs are normal part of workforce Shifts worldwide, not just in US Workforce diversity Power sharing Decision making Management Changes No perfect answers Do more with less Managers create vision Quality of relationships = success Overview Managerial Functions Planning, organizing, controlling, leading Managerial Skills Conceptual, human, technical Manager has a tough job Manager plays different roles Information, interpersonal, decision New World Technology, diversity, new ways to think 1/21/2010 Chapter 2- Evolution of Management Thinking Evolution of Management Thinking Knowing something about the history of management helps us Achieve strategic thinking See big picture Improve conceptual skills Historical Forces shaping management Social forces-shape the relationships among people Political forces-institutions used to govern a society Economic forces Timeline Egypt-quite a bit of the timeline of history Rome Columbus Ancient History Sumerians-invented writing for a business reason (near Iraq) Needed to keep inventory of product Egyptians Babylonia (Hammurabi, 1800 BC-first given credit to codify laws of society) China-Tang Dynasty- created the ancient bureaucracy Ancient Greece and Rome: decentralized control (109 total provinces) Medieval Times Arsenal of Venice (15th and 16th Century) Italy divided into city-states Created an assembly line to build ships Modern work practices Need to standardize parts and warehouse them 1574- King of France visited, Venetians made ship in 1 hour Ships were powered by hired workers, allowed for maneuverability Mules would tow boat and then would be assembled as It went down canal Classical Perspective ~100-120 years ago Owners vs. Workers SCIENTIFIC MANAGEMENT F.W. Taylor Inspired by efficiency, then can produce more product (i.e. more profit) Any company that engages in Taylorism was prevented from doing business in US The ideas caught on in Western Europe and then repealed about WWI Bureaucracy Max Weber A rational way to organize and coordinate the activities Systematic, fair, and efficient Clearly define jobs and the hierarchy Promote on basis of accomplishments Rule system that is applied to everyone Administrative Theory Henri Fayol Functions Plan, organize, control and command First to truly define functions of management Principles of management Unity of command-only one boss to report to Division of work Scalar chain Human Resource Approach 20th Century Hawthorn Studies (1920?s) Human factors-showed if people were respected, they worked harder Human relations approach A productive workforce is a satisfied work force Dairy farm approach-contented cows give better milk Theory X-treat people like machines, Theory Y-acknowledge humanness Maslow?s Need Hierarchy McGregor-Theory X and Y Theory X Dislike work Need to coerce, control and punish Avoid responsibility Lack ambition All they want is job security Theory Y Do not dislike work Have self-control and direction They are creative and imaginable Underutilized Behavioral Science Approach late 20th Century Behavioral sciences in the workplace Fundamental approach still used Management Science-mid 20th Century Using math Forecasting, inventory control, linear programming, queuing, theory, simulation Contemporary Extensions Systems Theory-Picture in book Inputs into outputs Contingency View It depends on what the situation is Learning Organization Strong adaptive culture: values Information widely shared Team-based structure Push participation further down hierarchy able to get better decisions Manager?s role changes-articulate the value system of the organization Current Issues Globalization Lean Operations Excellence Summary Practice of management Social, political, and economic forces Problems same, solutions different 1/26/10 Chapter 3- The Environment and Corporate Culture Environment External Environment Outside the walls Corporate Culture Internal environment External Environment General Environment- outside the boundaries of the company International business issues and politics Technology changes Sociocultural changes-demographics, customs, birth rates, values Economic-recessions, booms etc? Legal-political- laws and such Task Environment ? will affect within the short term Customers Competitors Suppliers Labor Market Organization-Environment Relationship Environmental Uncertainty- extremely unpredictable (try to respond to changes) Adapt-wait until something happens Influence-be proactive and shape to suit business Adapting to Uncertainty Adapting: fitting the business to the environment Boundary spanning-hang out in environment and report back the outside Interorganizational partnerships Mergers and joint ventures Influencing the Environment Influencing Advertising and PR Political activity Trade associations- collective efforts to shape public opinion Internal Environment: Culture Culture Values, beliefs Shared understanding about how things are done Surface vs. deeper Internal Environment: Culture Visible Manifestations Symbols-objects that convey meanings Stories about predecessors and company Heroes Slogans-phrases and expressions Ceremonies-convey what is important to the company Culture Types of Culture Adaptability Culture- believe in risk taking and speed Achievement Culture- performance is the most important Involvement Culture- centers around the needs of the employees Value cooperation, generosity, egalitarian Consistency Culture- orderly, rational, disciplined Changing Culture Cultural Leadership- leader is supposed to be representation of culture 1/28/10 Chapter 4- Managing in a Global Environment Managing in a Global Environment Global ownership and orientation Basic functions of management are same, but their expression changes A Borderless World Business is becoming a unified, global world Gain a competitive advantage over other companies Consumers can no longer tell from which country they are buying Domestic markets are saturated for many companies Four States of Globalization Domestic Stage Market potential is limited to the home country Production and marketing facilities located at home International State Exports increase Company usually adopts a multi-domestic approach Multinational state Marketing and production facilities located in many countries More than 1/3 of its sales outside the home country Global (stateless) stage Making sales and acquiring resources in whatever country offers the best opportunities and lowest cost ownership, control and top management tend to be dispersed Getting Started internationally Market Entry Strategy An organizational strategy for entering a foreign market Global Outsourcing (offshoring) Engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country (also called global sourcing) Strategies for Entering International Markets Graph in book Start selling, them move operations, outside by licensing and franchising International business environment Key international factors Economic environment Legal-political environment Sociocultural environment Economic Environment Economic Development Less Developed Countries (LDC?s) Lack of infrastructure of US, Canada or Western Europe Resource and product markets Access to materials, transportation, communications system Exchange Rates Legal-Political Political risk- appropriation, revolutions Political Instability Laws and regulations are different than ours Sociocultural Environment- hardest to deal with A nation?s cultural beliefs Hofstede studied the power distance through employees of IBM Power distance is acceptability of differences in class and wealth inside of a country (egalitarian or not) Uncertainty avoidance Individualism and collectivisim Masculinity and Femininity Masculine- embraces materialism, achievement and assertance Feminine- focuses on relationships GLOBE Project Extends Hofstede Assertiveness Future orientation- look into future and outcomes Gender differentiation- enforces stereotypes Performance orientation Humane orientation Social values, language, religion all influence style We can?t fully understand these which makes this the hardest to deal with Ethnocentrism- internal biases that make us unable to realize other cultures International Trade Alliances: GATT and WTO (General Agreement on Tariffs and Trades) Ensures nondiscrimination, negotiation of disputes, participation of lesser developed nations (make foreign products more expensive, makes local more attractive) 149 nations WTO (World Trade Organization)- mature GATT WTO Most favored nation clause- if belong, every other country in GATT gets the same deal as far as tariffs and taxes Encompasses GATT and all its agreements Has legal authority to arbitrate disputes Backlash (similar to G summits) European Union Formed 1957 Now has 25 nations Moving to include eastern Europe Monetary change: Euro Laws apply to every member nation NAFTA- North American Free Trade Agreement Jan 1, 1994 Merged US, Canada, Mexico Breaks down tariffs on agricultural and manufacturing products Success or failure? US doesn?t like Mexican trucking (safety standards) Other Alliances Association of Southeast Asian Nations (ASEAN) Mercosur (Argentina, Brazil, Bolivia, Chile, Paraguay, Uruguay) The Central American Free Trade Agreement (CAFTA) Free Trade Area of the Americas (FTAA) What happens if the organizations disagree? Global (Stateless) corporations Number is increasing Awareness of national borders is decreasing since they operate everywhere Corporate Examples Fred Hassan- Pakistan born CEO of Schering Plough Fernando Aguirre- Mexican born CEO of Chiquita brands The Big Players Multinational corporations (MNCs) More than 25% of revenue outside of home Managed as integrated systems Global perspective Global Challenges Personal Challenges Being sensitive Managing Cross-Culturally Leadership Motivation Control Road Ahead What does it mean to be and ?American? car maker? Nissan coming to Tennessee Side-stepping American car maker situation New approach by other ?foreign? manufacturers Proctor and Gamble- Emerging Markets 80 countries across the world $78 billion worth of products (most from North America, western Europe, Japan) Try to add 548,000 new customers per day China, India, Nigeria US $110, Mexico $20, China <$3, India <$1 per year on products Competitive Challenges Logistics: getting shampoo to every village Product Adjustment: smaller packages, lower prices Educate: diapers, sanitary pads 2/2/10 Chapter 5- Managing Ethics and Social Responsibility Ethics The code of principles and values that govern behavior in terms of what is right and wrong Right and wrong behavior, acceptable vs. unacceptable Standards Internal values Present when harm/benefit Human behavior falls into three categories Codified law- legal standard Free choice- anything you want is clear, personal standard Ethics- social standards Problem- ethical dilemma Moral Agent- try to resolve ethical dilemmas Criteria for Ethical Decision Making Managers often use normative ethics (rules of thumb based on values) Approaches to Ethical Decision Making Utilitarian Moral behavior produces the greatest good for the greatest number Example- recent trend among companies to monitor employee use of Internet Individualism Best for ME in the long run Believed to promote honesty and integrity in the long run WorldCom, Enron, Tyco Moral-Rights Moral decisions are those that best maintain the rights of those people affected by them An ethical decision is one that avoids interfering with the fundamental rights of others Six Moral Rights Right to free consent- cannot be compelled to do something against will Right to privacy Right to freedom of conscience- freedom of religion, political views Right to free speech Right to due process Right to life and safety Justice Moral decisions based on equity, fairness, impartiality Types of justice Distributive Procedural Compensatory- if harmed, entitled to compensation Factors affecting Ethical Choices The manager Stages of moral development Who the manager is in terms of personality, values, attitudes, and stage of moral development- three stages of moral development Preconventional: concerned with external rewards and punishments Conventional: conforming to expectations of good behavior Principled: internal set of standards and values The organization- culture and beliefs inside the business Most managers want to fulfill obligations, so company can have powerful influence on ethical behavior Company and influence ethical behavior Rules and policies about moral behavior Rewards for moral behavior Concern for employee welfare- tend to promote moral behavior and be populated by people who behave ethically Emphasis on legal and professional standards Moral leadership 60 Minutes Test Is problem/dilemma what it appears to be? Is the action you are considering LEGAL? Do you understand opposing positions? Will the action you are considering HARM someone? Who? Have you sought other opinions? Will the action you are considering EMBARRASS you if someone finds out? Social Responsibility An obligation to contribute to the welfare and interests of society as well as interests of the company Is about being a good citizen Problem: Responsible to whom? Stakeholders Companies are ultimately responsible to their stakeholders Investors Employees Customers Suppliers Government Larger community Natural Environment Concern for natural environment Consumers aware of ?green? issues Companies aware of ?green? issues Corporate Actions towards Social Demands Ways in which a business can respond to a demand from a stockholder Obstruct- say they didn?t do anything, deny responsibility Defend Accommodate- give in to every demand Be proactive Management must create ethical climate Leading by example Code of ethics Ethical structures- committee whose job is to be a watch dog for company Ethical Behavior Pays Research has shown a small, positive relationship between socially responsible behavior and financial performance Use of resources for social good does not hurt company Integrity and trust are essential ingredients in long-term success Whole Foods, Whole People, Whole Planet John Mackey, founder and CEO ALL stakeholders 5% of profits is put into local charities Quality organic and natural foods Social Responsibility Mackey?s blogs- nice things about Whole Foods but ripping other companies Ethical Organization- figure in textbook Ethical Individuals Ethical Leadership Structures and Systems
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