Chapter 2 Challenges for Managers Describe the factors that affect organizations competing in the global economy. Explain how cultural differences form the basis of work-related attitudes. Describe the challenges and positive influences diversity bring to today’s business environment. Discuss the role of ethics, character, and personal integrity in the organization. Explain five issues that pose ethical dilemmas for managers. Describe the effects of technological advances on today’s workforce. Learning Outcomes © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Outcome 1 Describe the factors that affect organizations competing in the global economy. © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Four Challenges Globalization Diversity Ethics Technology Managerial Implications: Beating the Challenges Organizational success depends on managers’ ability to address the challenges of globalization, workforce diversity, ethics, and technological innovation. Successful organizations and managers view these four challenges as opportunities rather than as threats. Failure to address these challenges can mean costly losses, damage to reputations, and ultimately an organization’s demise. These four challenges are important because the way managers handle them shapes employee behavior. Developing global mindsets among employees expands their worldview and puts competition on a larger scale. Knowing that diversity is valued causes employees to think twice about engaging in discriminatory behaviors. Valuing technological change encourages employees to experiment with new technologies and develop innovative ways to perform their jobs. Sending a message that unethical behavior is not tolerated lets employees know that doing the right thing pays off. © 2011 Cengage Learning. All rights reserved.

Remaining Competitive Globalizing the firm’s operations Managing a diverse workforce Keeping up with technological change and implementing technology in the workplace Managing ethical behavior © 2011 Cengage Learning. All rights reserved. 2

Changing Business Perspectives From International (which implies an individual’s or organization’s held nationality is strongly in consciousness) To Globalization (which implies the world is free from national boundaries and that it is really a borderless world) © 2011 Cengage Learning. All rights reserved. 3

Changing Business Perspectives From Multinational Organizations (in which the organization was recognized as doing business with other countries) To Transnational Organizations (in which the global viewpoint supersedes national issues) © 2011 Cengage Learning. All rights reserved. 4

Beyond the Book: China and Globalization Suntech Power, China’s largest solar panel manufacturer, opening a plant in Arizona. Will build panels from parts manufactured in China and Texas. Important factor – shipping costs. Suntech has goal of reaching 20% US market share by end of 2010. Globalization is often viewed as the growth of western firms to emerging markets. As this case illustrates, however, globalization should properly be viewed as the worldwide integration of economies marked by multi-directional growth and expansion. While China is often viewed as the recipient of investments (and outsourcing) from the US, there are now many instances in which Chinese firms are making significant investments into the United States. In November 2009, Suntech Power, China’s largest solar panel manufacturer, announced their intentions to open a solar panel factory in the United States, with production beginning in the third quarter of 2010. A key factor in the decision to open a manufacturing plant in the US is the price of shipping. According to Roger Efird of Suntech, “As the price of solar panels has reduced dramatically in the last 12 months, the shipping costs have become a larger and larger portion of the overall cost of getting these projects to market.” The decision to locate in the US will likely benefit Suntech because it can sell its products as American-made. In addition to appealing to American consumers, this will also enable Suntech to market their products to governmental authorities, some of which have a “Buy American” requirement. Source: Kate Galbraith “Chinese Solar Panel Firm to Open Plant in Arizona” New York Times, 16 November 2009, available online at: http://www.nytimes.com/2009/11/17/business/energy-environment/17solar.html?_r=1&ref=business © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. GLOBAL MARKETPLACE Opening of Chinese market Creation of the European Union Establishment of NAFTA CHANGES IN THE © 2011 Cengage Learning. All rights reserved. 5

Understanding Cultural Differences HOFSTEDE’S DIMENSIONS © 2011 Cengage Learning. All rights reserved. 6

ON HOFSTEDE’S DIMENSIONS Where the U.S. Stands ON HOFSTEDE’S DIMENSIONS INDIVIDUALISM High power distance High uncertainty avoidance MASCULINITY Long-term orientation Collectivism Low power distance LOW UNCERTAINTY AVOIDANCE Femininity SHORT-TERMM ORIENTATION © 2011 Cengage Learning. All rights reserved. 6

© 2011 Cengage Learning. All rights reserved. Learning Outcome 2 Explain how cultural differences form the basis of work-related attitudes. © 2011 Cengage Learning. All rights reserved.

Developing Cross-Cultural Sensitivity Cultural sensitivity training Cross-cultural task forces/teams Global view of human resource functions Planning Recruitment and Selection Compensation Training and Development © 2011 Cengage Learning. All rights reserved. 8

© 2011 Cengage Learning. All rights reserved. Learning Outcome 3 Describe the challenges and positive influences diversity brings to today’s business environment. © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Diversity all forms of individual differences, including culture, gender, age, ability, personality, religious affiliation, economic class, social status, military attachment and sexual orientation © 2011 Cengage Learning. All rights reserved.

Diversity Statistics for the Workplace Ethnic 2020 Workforce: 68% white non-Hispanic 14% Hispanic 11% African-American 5% Asian Gender 2020 Workforce: 50% male 50% female © 2011 Cengage Learning. All rights reserved.

Beyond the Book: Diversity in College Football According to The Institute for Diversity and Ethics in Sport at the University of South Florida, key leadership positions at Football Bowl Subdivision schools remain predominantly white and male. 100% of athletic conference commissioners. 93.3% of university presidents 86.7% of athletic directors 92.5% of head football coaches 82.9% of faculty The Institute for Diversity and Ethics in Sport at the University of South Florida published some stark figures in their most recent report on diversity in college athletics, The Buck Stops Here: Assessing Diversity Among Campus and Conference Leaders for Football Bowl Subdivision (FBS) Schools in the 2009-10 Academic Year. According to the report, the key leadership positions at FBS schools are occupied overwhelmingly by white males. This includes football/athletics positions such as head coach, assistant coach/coordinator, and athletic director, as well as administrative roles such as president and conference commissioner, and the university’s faculty as a whole. This includes a total of just 9 non-white head coaches out of a total of 120 positions. This lack of diversity in leadership positions is even more stunning in light of the diversity of the student-athletes, 44.5% of which were white and 50.5 of which were African-American. The full report is available at: http://web.bus.ucf.edu/documents/sport/0910_fbs_demographics_study.pdf Source: http://today.ucf.edu/blog/2009/11/17/tides-latest-report-examines-fbs-schools/ © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. & OBSTACLES AT WORK Comprise over 60% of the workforce Earn 49% of all doctorates Earn 60% of master’s degrees Earn 58% of undergraduate degrees BUT Little increase in number of women CEOs. Earn 81% of what male counterparts do. Encounter the glass ceiling in the workplace WOMEN © 2011 Cengage Learning. All rights reserved.

Diversity Statistics Affecting the Workplace Age By 2030, people over 65 will comprise 20% of the population. Ability An estimated 50 million disabled live in the U.S.; their unemployment rate exceeds 50%. © 2011 Cengage Learning. All rights reserved.

Beyond the Book: Diversifying Dell Reverse mentoring scheme at Dell. Women in middle-management mentor senior-level men. Based on recognition that some aspects of leadership do not come as naturally to men as they do to women. Dell Incorporated, based in Round Rock, Texas, employs a reverse-mentoring scheme to help senior level managers increase their awareness of diversity issues. The program pairs a male senior-leader with a female from middle management, the goal being to have the males learn the issues and challenges that females face in the workplace. The program was begun when Dell executives found that certain aspects of leadership come more naturally to women, and that men would need extra coaching in those areas. Through this initiative, which Dell calls “inclusive leadership,” it hopes that it will not only foster gender-equity in the company, but foster within the organization traits traditionally associated with women such as intuition, collaboration and empathy. Source: http://www.hrmagazine.co.uk/News/MostEmailed/944898/Dell-female-middle-managers-mentor-male-colleagues/ © 2011 Cengage Learning. All rights reserved.

Diversity’s Benefits & Problems Attracts and retains the best talent Improves marketing efforts Promotes creativity and innovation Results in better problem solving Enhances organizational flexibility Resistance to change Lack of cohesiveness Communication problems Interpersonal conflicts Slower decision making © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Outcome 4 Discuss the role of ethics, character, and personal integrity in the organization. © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Ethical Theories [Rule-Based Theory] an ethical theory that emphasizes the character of the act itself rather than its effects [Consequential Theory] an ethical theory that emphasizes the consequences or results of behavior [Character Theory] an ethical theory that emphasizes the character, personal virtues, and integrity of the individual © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Outcome 5 Explain five issues that pose ethical dilemmas for managers. © 2011 Cengage Learning. All rights reserved.

Employee Rights Issues Technology and privacy HIV/AIDS Confidentiality © 2011 Cengage Learning. All rights reserved.

Sexual Harassment = Unwanted Sexual Attention Gender Harassment – crude comments; behaviors that convey hostility toward a particular gender Unwanted Sexual Attention – unwanted touching, unwanted pressure for dates Sexual Coercion – demands for sexual favors through job-related threats or promises © 2011 Cengage Learning. All rights reserved.

Organizational Justice Distributive Justice – fairness of the outcomes that individuals receive in an organization Procedural Justice – fairness by which the outcomes are allocated in an organization © 2011 Cengage Learning. All rights reserved.

Individual and Organizational Responsibility Whistle-Blower – an employee who informs authorities of the wrongdoing of his or her company or coworkers Public Hero or Vile Wretch? Social Responsibility – the obligation of an organization to behave ethically © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. The Four Way Test Is it the TRUTH? Is it FAIR to all concerned? Will it build GOODWILL and better friendships? Will it be BENEFICIAL to all concerned? © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Outcome 6 Describe the effects of technological advances on today’s workforce. © 2011 Cengage Learning. All rights reserved.

Technological Innovation Technology The intellectual and mechanical processes used by an organization. The intellectual and mechanical processes used by an organization to transform inputs into products or services that meet organizational goals. Examples Internet Expert System Robotics © 2011 Cengage Learning. All rights reserved.

Beyond the Book: Addicted to the Internet Technology can be addicting. Key warning sign – being preoccupied with online activities, adversely affecting relationships Types – pornography, gambling, auctions sites, games. The internet and related mobile technologies have revolutionized how organizations run. Communication can occur almost instantaneously, across vast geographic distances and at nearly all times of the day, allowing people to connect with individuals from all over the world. However, this revolution has a dark side, the danger of addiction. The instant access to information and communication makes the internet unpredictable. According to David Greenfield, assistant clinical professor of psychiatry at the University of Connecticut School of Medicine, “The fact that it is unpredictable is what compels the brain to keep checking over and over and over.” The compulsive checking of e-mail and web sites is only one part of the problem. The anonymity of the internet allows users to fuel various other addictions, such as gambling or pornography, with astonishing ease. Meanwhile, because on-line connections between people require relatively little relational labor, many medical experts feel that this can cause significant problems in the conduct of real-life relationships. In response to these concerns, the Chinese government has declared excessive internet use and video game addictions as public health problems. In the US, the nation’s first internet addiction rehab center opened in Fall City, Washington. Source: http://www.seattlepi.com/health/412332_internetaddiction1116.html © 2011 Cengage Learning. All rights reserved.

Alternative Work Arrangements Telecommuting Satellite offices Virtual offices © 2011 Cengage Learning. All rights reserved.

Alternative Work Arrangements [Employees] Gain flexibility Save the commute to work Enjoy the comforts of home [But, they ] Have distractions Lack socialization opportunities Lack interaction with supervisors Identify less with the organization © 2011 Cengage Learning. All rights reserved.

Technological Change Requires Managers to: Develop technical competence to gain workers’ respect Focus on helping workers manage the stress of their work Take advantage of the wealth of information available to motivate, coach, and counsel—not to control © 2011 Cengage Learning. All rights reserved.

Help Employees Adjust by Involving them in decision making regarding technological change Selecting technology that increases workers’ skill requirements Providing effective training Establishing support groups Encouraging reinvention (creative application of new technology) © 2011 Cengage Learning. All rights reserved.

While watching this sequence, pretend you have arrived in Tokyo, and you are experiencing what you are seeing. Do you understand everything you see? Is Charlotte bewildered by her experiences? Is she experiencing some culture shock? What aspects of Japanese culture appear in this sequence? What do you see as important values of Japanese culture? Review the Chapter 2 section, "Cultural Differences," to gain some insights about these questions. Lost in Translation Jet lag conspires with culture shock to force the meeting of Charlotte (Scarlett Johansson) and Bob Harris (Bill Murray). Neither can sleep after their Tokyo arrival. They meet in their luxury hotel’s bar, forging an enduring relationship as they experience Tokyo’s wonders, strangeness, and complexity. This sequence is an edited composite taken from different parts of the film. It shows selected aspects of Tokyo and Kyoto, Japan. Charlotte has her first experience with the complex and busy Tokyo train system. She later takes the train to Kyoto, Japan’s first capital city. Ask your students: 1. While watching this sequence, pretend you have arrived in Tokyo, and you are experiencing what you are seeing. Do you understand everything you see? 2. Is Charlotte bewildered by her experiences? Is she experiencing some culture shock? 3. What aspects of Japanese culture appear in this sequence? What do you see as important values of Japanese culture? Review the earlier section, “Understanding Cultural Differences,” to gain some insights about these questions.