Class 1 - Global Management Notes

Chapter 1: Management

Chapter Outline

• 1.1 Working Today

• 1.2 Organizations

• 1.3 Managers

• 1.4 The Management Process

• 1.5 Learning How to Manage

1.1 Working Today

Objective: To recognize the challenges of working in the new economy.

Topics Explored:

• Talent

• Technology

• Globalization

• Ethics

• Diversity

• Careers and connections

Talent

• Talented People: Defined by "what they know, what they learn, and what they achieve." They are considered the primary source of Organizational Performance.

• Intellectual Capital (IC):

  • Represents the collective brainpower or shared knowledge of a workforce that can be used to create value.

  • For individuals and organizations, it signifies the value derived from knowledge, skills, and commitment.

  • Formula: Intellectual Capital $=$ Competency $+$ Commitment

    • Competency: What an individual or organization is capable of doing (skills, knowledge, abilities).

    • Commitment: The dedication and willingness to apply those competencies effectively.

• Important Principle: "Hard work beats talent when talent fails to work hard." – Kevin Durant. This emphasizes the significance of effort and dedication over innate ability alone.

Technology

• Pervasive Nature: Technology continuously challenges our talents and permeates every aspect of our lives.

• Technological Advancement: We are constantly exposed to new developments, such as smart phones, smart apparel, smart cars, and smart homes.

• Digital Overload: Individuals struggle to manage social media involvement, stay connected with messaging, and handle the volume of emails and voicemails.

• Generational Shift in Management: As younger workers advance into management roles, there's a potential for gaps or differences in technological approaches and communication styles across generations.

  • Generational Cohorts:

    • The Builders: $1920-1945$

    • Baby Boomers: $1945-1960$

    • Generation X: $1960-1985$

    • Millennials: $1985-1995$

    • Generation Z: $1995-2005$

    • Generation Alpha: $2005-2015$

  • Bridging Generational Gaps: "Reverse mentoring" is a viable alternative to reduce or bridge these gaps. It involves younger, often more tech-savvy employees mentoring older, more experienced colleagues on technology, social media, or current trends.

• Importance of Tech IQ: It is critical to build and maintain a high "Tech IQ" – an understanding and proficiency in technology relevant to one's field.

• Career Expectations: $72$ percent of college students desire "a job where I can make an impact," reflecting a desire for meaningful work that contributes positively to the world.

Globalization

• Definition: Globalization refers to the increasing interdependence of the world's economies, cultures, and populations, driven by cross-border trade, technology, and flows of investment, people, and information.

• Global Value Chain: The entire range of activities that firms and workers perform to bring a product from its conception to end use, including distribution and post-retail services, across multiple countries.

• Productivity-Wage Gap: There are growing concerns about the reasons for the expanding gap between productivity growth and wage increases, often attributed to globalization, technological changes, and weakening labor institutions.

• Shamrock Organization: A business model characterized by three distinct "leaves" or groups of workers:

  1. Core Workers: Essential, highly skilled professionals.

  2. Contractual Fringe: Independent contractors and consultants brought in for specific projects.

  3. Flexible Labor Force: Part-time or temporary staff used for routine tasks or during peak demand.

• Emerging Markets: These are economies that are transitioning from developing to developed status, characterized by rapid growth and industrialization. They are distinct from "Third World Countries," a term often associated with less-developed, non-aligned nations during the Cold War era.

Ethics

• Definition: Ethics refers to the moral principles that govern a person's, group's, or organization's behavior. In a business context, it concerns how individuals and organizations ought to act in situations involving right and wrong.

• Ethical vs. Legal: Actions can be legal but not ethical, or ethical but not legal, highlighting that legality isn't the sole determinant of moral correctness.

1.2 Organizations

• Definition: An organization is a collection of people working together to achieve a common purpose. It's a unique social phenomenon that enables members to perform tasks far beyond individual accomplishment, demonstrating "synergy."

• Organizational Purpose: The broad purpose is to provide goods or services of value to customers and clients.

  • A clear purpose tied to: quality products and services, customer satisfaction, and social responsibility can be a major source of organizational strength and performance advantage.

• Organizations as Open Systems:

  • Definition: Organizations are considered "open systems" because they continuously interact with their external environment.

  • They take in resources (inputs) from the environment, transform them through internal processes (throughput), and return finished goods or services (outputs) back to the environment.

  • Value Creation: For organizations, value creation is the process of producing or adding worth to something, typically by transforming inputs into outputs that are more valuable to customers.

    • The perception of value often depends on the stakeholder being asked (e.g., customer, employee, owner, community).

  • Bottom Line vs. Triple Bottom Line:

    • Bottom Line: Refers to the traditional measure of a company's financial performance (profit or loss).

    • Triple Bottom Line (TBL): An accounting framework that includes social and environmental measures into a company's financial performance. It extends the traditional bottom line to include "People, Planet, and Profit" (or social, environmental, and financial performance).

• Organizational Performance:

  • Productivity: A measure of the efficiency of production. It's the ratio of output to input (e.g., $ext{Productivity} = rac{ ext{Output}}{ ext{Input}}$).

  • Performance Effectiveness: The degree to which an organization achieves its stated goals. (Doing the right things).

  • Performance Efficiency: How well an organization uses its resources to achieve its goals, minimizing waste. (Doing things right).

1.3 Managers

• Quality of Work Life (QWL):

  • Definition: QWL refers to the overall quality of an individual's experience in the workplace.

  • Indicators of QWL: Some common indicators include:

    • Fair pay and benefits.

    • Safe working conditions.

    • Opportunities for learning and growth.

    • Respect for individual rights.

    • Pride in work and organization.

    • A sense of involvement and influence in decision-making.

    • Work-life balance.

• The Organization as an Upside-Down Pyramid: This model suggests that customers are at the top, served by frontline operating workers, who are supported by team leaders, and ultimately, by upper management at the bottom. This structure emphasizes customer satisfaction and employee empowerment.

• Katz's Essential Managerial Skills: Robert Katz identified three core sets of skills essential for managerial success, with their importance varying across different management levels:

  • Technical Skills:

    • Definition: The ability to apply expertise and perform a special task with proficiency.

    • Relevance: Most important for Lower-level managers.

  • Human Skills:

    • Definition: The ability to work well in cooperation with other persons; often related to emotional intelligence.

    • Relevance: Equally important for all managerial levels (Lower-level, Middle-level, Top-level managers).

  • Conceptual Skills:

    • Definition: The ability to think analytically and achieve integrative problem-solving; involves the capacity to view the organization as a whole and understand how its parts interrelate.

    • Relevance: Most important for Top-level managers.