2–1

2BBA 100

Dr. Salma Chad

2–2

The Changing Economy

• AgricultureUntil the late nineteenth century, all

economies were agrarian.

• IndustrializationFrom the late 1800s until the 1960s, most

developed countries moved from agrarian societies to industrial societies.

• Information Information technology is transforming society

from its manufacturing focus to one of service.

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The Changing Economy

Exhibit 2.1

Old Economy

• National borders limit competition

• Technology reinforces rigid hierarchies and limits access to information

• Job opportunities are for blue-collar industrial workers

• Population is relatively homogeneous

• Business is estranged from its environment

• Economy is driven by large corporations

• Customers get what business chooses to give them

New Economy

• National borders no longer define an organization’s operating boundaries

• Technological change makes information more accessible

• Job opportunities are for knowledge workers

• Population is characterized by cultural diversity

• Business accepts its social responsibilities

• Economy is driven by small entrepreneurial firms

• Customer needs drive business

Refer to your own note sheet which I have marked.

2–4

A Global Marketplace

• Global village / GlobalisationThe concept of a boundaryless world; the

production and marketing of goods and services worldwide.

• Borderless organizationA management structure in which internal

arrangements that impose artificial geographic barriers are broken down

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Globalization’s Effect On Managers

• ParochialismA narrow focus in which one sees things solely

through one’s own view and from one’s own perspective

• Hofstede’s framework for assessing cultures:Power distance Individualism versus collectivismQuantity of life versus quality of lifeUncertainty avoidanceLong-term versus short-term orientation

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2–6

Emphasis on Technology

• TechnologyAny equipment, tools, or operating methods

that are designed to make work more efficient

• Information Technology (IT)Benefits of IT

Cost savings (e.g., inventory control) Freedom from fixed locations for operations

Challenges Increased worker skill requirements A leveling of the the competitive playing field that

increases competition

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Internet Business Terms

• E-commerceAny computer transaction that occurs when

data are processed and transmitted over the Internet

• E-organizationThe applications of e-business concepts offered

to stakeholders.

• E-businessThe full breadth of activities included in a

successful Internet-based enterprise

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In What Ways Does Technology Alter A Manager’s Job?

• Effectiveness and efficiencyManagers have access to more complete and

accurate information than before, enabling them to function as better managers.

• PlaceTelecommuting: the linking of a worker’s

computer and modem with those of co-workers and management at an office.

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2–9

Labor Supply and Demand Adjustments

• DownsizingAn activity in an organization designed to

create a more efficient operation through extensive layoffs

• RightsizingLinking staffing levels to organizational goals

• OutsourcingAn organization’s use of outside firms for

providing necessary products and services

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2–10

Flexible Workforces

• Core employeesThe small group of full-time employees of an

organization who provide some essential job tasks for the organization

• Contingent workforcePart-time, temporary, and contract workers

who are available for hire on an as-needed basis

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–11

Classifying Global Village Businesses

• Global SourcingThe use of worldwide resources (outsourcing).

• ImportingDomestic firm buys products from foreign firms

and sells them in its home market.

• ExportingDomestic firm sells its locally-made products to

foreign buyers in overseas markets.

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–12

Classifying Global Village Businesses

• LicensingOne company allows another company to use

its assets (intellectual property) for a fee. Brand name, trademark, technology, patent, and

copyrightFranchising

For a fee, a franchiser provides the franchisee with the assets and support to conduct a business using the franchiser’s business model for its operations.

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–13

Classifying Global Village Businesses

• Management ContractsA company has a foreign firm manufacture the

goods while retaining the marketing process.

• Joint VentureA enterprise that is created when firms agree

to share in its ownership.

• Direct Investment Investment that occurs when a company builds

or purchases operating facilities (subsidiaries) in a foreign country.

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. 3–14

Taking a Business Global

Exhibit 3–2

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What is Diversity?

• Diversity is defined as all characteristics and experiences that define each of us as individuals.

• A common misconception about diversity is that it only pertains to certain persons or groups, when in fact, exactly the opposite is true.

• Diversity can include Race, Ethnicity, Gender, Age, Religion, Disability, and Sexual orientation

• A diverse workplace aims to create an inclusive culture that values and uses the talents of all its employees

Business Case for Diversity

• The belief that diversity is a business necessity because a more diverse workforce produces better business results.

• Many organizations began to see that having diversity in the workplace was a precursor to diversity in the market place.

The Effects of Diversity in the Workplace

• Solid research needed to be conducted to support the idea that diversity was beneficial to the workplace.

• Diversity was found to be a lot more complex than it was originally thought to be.

• Research indicates that diversity can produce both positive and negative effects when introduced and enforced in the workplace.

• Evidence suggests that diversity may produce conflict and employee turnover as well as more creativity and innovation

Benefits of Diversity

• Groups with greater diversity were shown to have greater innovation and creativity.

• Diverse groups have a greater range of perspectives, and are able to generate more high quality solutions than less diverse groups.

• Diversity increases constructive group processes and is positively associated with performance in business units.

• Diversity is associated with increased sales revenue, greater market share, more customers, and greater profits.

Negative Effects of Diversity

• Diverse groups are shown to be less integrated and have a higher level of dissatisfaction.

• Increases the level of dissatisfaction in group members, as well as miscommunication.

• Diversity can be linked with conflict, lower group adhesiveness, increased employee turnover and absenteeism, and lower quality of performance.

Factors that Effect Diversity

• Research suggests that whether or not diversity has a positive or negative effect depends on different aspects of the organization’s strategies, culture, and human resource practices. This indicates that diversity may be beneficial under certain conditions and in certain organizations (Pugh, Dietz, Brief, & Wiley, 2008).Size of the organizationAge of the organizationType of organizationDiversity of the community surrounding an organization

Diversity Training

• As diversity in the workforce grows at an amazing rate, more and more organizations are now focusing on diversity in the workplace by emphasizing recruitment, selection, retention, and training.

Diversity Training

• Diversity training has three major objectives in the workplace: increase awareness about diversity issuesreduce biases and stereotypes that deter from

effective managementchange behaviors to help effectively manage a

diverse workforce

Effectiveness of Diversity Training

• With diversity training, employees have a greater understanding of the value diversity, better diversity management skills, and more effective diversity related behaviors .

• After undergoing training, managers saw diversity related practices as more important than they did prior to the training, and were more likely to positively engage in diversity related practices.

Diversity in the Workplace Today

• While many organizations are embracing diversity in the workforce, there are still organizations today that remain unreceptive. Although many government agencies and Fortune 500 companies provide diversity training, around 40% of organizations still do not.

• Even the organizations that claim to be strong advocates for diversity do not have the statistics to back their claims. Only 30% of female employees hold management positions in Wal-

Mart This is a very low number considering 70% of their employees are female.

Diversity in the Workplace Today

• Gender discrimination is still a huge problem within many organizations. Many male managers are slow to promote female employees to managerial positions. A Senior Vice President interviewed by Turner (2007), was quoted saying,

“Well, yes we need to have more women in senior positions. Our senior leadership team includes only men. But, personally, I’m just less comfortable with women on the senior team. We spend a lot of time together. You know you always have to be worried about the sexual harassment thing, what you say, how you say it…But, that doesn’t mean we shouldn’t pursue it .”

• Other companies such as Abercrombie and Fitch show extreme racial preference, with a reputation for hiring people to fit their image of a “Classic American,” which they believe are attractive white employees.

Diversity in the Workplace Today

• Other companies such as Abercrombie and Fitch show extreme racial preference, with a reputation for hiring people to fit their image of a “Classic American,” which they believe are attractive white employees. Due to this, they have faced many lawsuits

Diversity in the Workplace Today

• Many of these companies now claim that diversity is important to them, especially on their websites, however it is clear that this is only in response to the many lawsuits they’ve faced.

• Marques states “It becomes apparent, however, when studying the background of these appealing statements, that they were not formulated spontaneously, but, just like A&F above, merely as a reaction to massive discrimination lawsuits” (2010).

Conclusion

• It is clear that diversity has a profound effect in the workplace. While many studies have been conducted, these studies show conflicting results, implying further research is needed.

• As the workforce continues to grow more diverse at a staggering rate, it is necessary for organizations to embrace diversity

• Although many organizations have increased their acceptance of diversity, it has yet to fully garner a majority of support

Thank you

Questions?