© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1

Chapter Objectives Summarize the demographics of the new American workforce. Explain why America’s education and workplace readiness situation is a crisis. Define the term managing diversity, and explain why it is particularly important today. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2

Chapter Objectives (cont’d) Discuss how the changing political-legal environment is affecting the practice of management. Discuss why business cycles and the global economy are vital economic considerations for modern managers. Describe the three-step innovation process, and define the term intrapreneur. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3

The Social Environment Dimensions of the Social Environment Demographics Changes in the statistical profiles of population characteristics Inequalities Persistent barriers encountered by women, minorities, and others in the workplace Managing diversity Creating organizational cultures that enable all employees to realize their potential © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4

Demographics of the New Workforce It is getting larger, increasingly female, more racially and ethnically diverse, older, and more age-diverse. America’s Education and Workplace Skills Crisis To compete in a global labor market, U.S. workers need a constantly improving, world-class education – but American kids aren’t getting one Problems start early and persist throughout the education process © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5

Demographics of the New Workforce (cont’d) Myths About Older Workers They are less productive. They incur higher benefits costs. They have higher absenteeism. They have more accidents at work. They are less willing to learn. They are inflexible about the hours they are willing to work. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6

Figure 3.1: The Changing U.S. Workforce: © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7

Figure 3.1: The Changing U.S. Workforce: (cont)

Nagging Inequalities in the Workplace Under the Glass Ceiling Women continue to experience a significant gender- wage gap and strong barriers to advancement. Women are demanding more equitable compensation and workplace opportunities. Many women are leaving the corporate ranks to start their own businesses. Continuing Pressure for Equal Opportunity Women, minorities, and the physically challenged are all expected to press harder for more employment opportunities. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9

Nagging Inequalities in the Workplace (cont’d) About 17% of the U.S. labor force is made up of contingent workers. Reasons: Less costly Can be let go when times are bad There is lower job involvement among part-timers in comparison to their full-time counterparts © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10

Managing Diversity The process of creating an organizational culture that provides all employees, including women and minorities, with assistance and opportunities to help them realize their full potential More Than EEO The moral necessity and commitment in going beyond EEO and affirmative action to create flexible organizations that encompass and value diversity © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11

The Political-Legal Environment Politics is the art (or science) of public influence or control The Politicization of Management Issues management Ongoing process of identifying, evaluating, and responding to important social and political issues Purpose: Minimize “surprises” and make more systematic and effective responses to issues General political responses Defending the status quo against all comers Adopting a “wait and see” approach Proactively trying to identify and respond to issues © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12

Figure 3.2: Management’s Political Response Continuum © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13

The Political-Legal Environment (cont’d) Specific Political Strategies Campaign financing Political action committees (PACs) Lobbying Garnering political support Coalition building Common rallying points Indirect lobbying Advocacy advertising © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14

Increased Personal Legal Accountability Increases in Demands for Accountability Sarbanes-Oxley Act (2002) Increased penalties for accounting fraud Established a new felony with stiff prison term for securities fraud Political and Legal Implications for Management Increased use of legal audits A review of all operations to pinpoint possible legal liabilities or problems Use of alternative dispute resolution (ADR) Settling disputes with less costly methods, including arbitration and mediation © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15

The Economic Environment The Job Outlook in Today’s Service Economy, Where Education Counts Service providers are expected to generate 14.5 million jobs between 2008 and A solid educational foundation and networking skills are especially important in tough economic times. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16

The Economic Environment Coping with Business Cycles Up-and-down movement of an economy’s ability to generate wealth Predictive structure but variable timing Cycle-Sensitive Decisions Timing is everything Stay ahead of the pack Benefiting from Economic Forecasts Use a consensus approach © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17

Figure 3.3: Business Cycles Affect Managerial Decisions © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18

The Challenge of a Global Economy A Single Global Marketplace Global trade is causing a shift to a single economy. The size of the global economy has expanded dramatically. Globalization Is Personal A growing trend: Working for a foreign-owned company. Meeting world standards for quality and costs (through lower wages) is necessary to be globally competitive. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19

The Technological Environment Technology Technology includes all the tools and ideas available for extending the natural and mental reach of humankind. Technology is facilitating the evolution of the information age. Information has become a valuable strategic resource for gaining competitive advantage. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20

Table 3.1: Science Fiction Is Becoming Reality with Seven New Technologies © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21

The Technological Environment (cont’d) The Innovation Process The systematic and practical application of a new idea Steps in the Innovation Process Conceptualization: When a new idea occurs to someone Product technology: Creation of a working prototype Production technology: Development of a profitable production process © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22

Figure 3.4: The Three-Step Innovation Process © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23

The Technological Environment (cont’d) Innovation Lag The time it takes for a new product to be translated into satisfied demand Shortening Innovation Lag Goal setting: Creating a sense of urgency and purpose Empowerment: Pushing decision-making authority down to the level of the decision Concurrent engineering: Using a team approach to product design involving specialists from all functional areas including research, production, and marketing © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24

Promoting Innovation Through Intrapreneurship Intrapreneur An employee who takes personal responsibility for pushing an innovative idea through a large organization Fostering Intrapreneurship Focus on results and teamwork Reward innovation and risk taking Tolerate and learn from mistakes Remain flexible and change-oriented © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25

Summary The U.S. workforce will continue to become larger, older, more diverse, and more female. America’s education system has major problems at all levels. The persistence of opportunity and income inequalities (and the glass ceiling) among women and minorities is a strong stimulus for change. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 26

Summary (cont’d) Managers are becoming increasingly politicized and more likely to be held personally responsible for their decisions and actions. Managers can make timely decisions during somewhat unpredictable business cycles by taking a consensus approach to economic forecasts. A healthy innovation process is vital to technological development. An organizational climate that fosters intrapreneurship can help. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27

Terms to Understand Demographics Glass ceiling Contingent workers Managing diversity Issues management Advocacy advertising Legal audit Alternative dispute resolution Business cycle Technology Innovation process Product technology Production technology Innovation lag Concurrent engineering Intrapreneur © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 28