part Chapter © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 1 McGraw-Hill Contemporary Issues 4 Chapter 13

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 2 McGraw-Hill Learning Objectives 1.Define diversity and explain how it applies to management. 2.Define global management. 3.Compare and contrast importing and exporting. 4.Identify protectionism. 5.Explain how to manage change and the change process. 6.Explain the process of organizational development.

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 3 McGraw-Hill Diversity and Management In the past, minority workers -- menial jobs Today, more in higher level positions Glass ceiling Downsizing opening doors What is Diversity Definition Trend – Greater diversity

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 4 McGraw-Hill Diversity and Management Reasons for Creating a Diverse Workforce Reasons Improved decision making Increasing globalization Challenges New human resource policy Solutions Tolerance Potential payoff

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5 McGraw-Hill Global Management International trade Standard of living Absolute Advantage Different countries different resources Definition Comparative Advantage The law of comparative advantage

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 6 McGraw-Hill Exporting and Importing International trade Exports Why do companies export? How do companies identify markets? Imports Imports of materials Imports of consumer goods

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 7 McGraw-Hill Exporting and Importing The Trade Balance Trade surplus Trade deficit Foreign Exchange Foreign exchange rate Fluctuation

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 8 McGraw-Hill Protectionism Tariffs Quotas Embargos Free trade areas –NAFTA –EU

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 9 McGraw-Hill Doing Business Globally Forms of International Operations Working through a foreign intermediary Signing a licensing agreement with a foreign country Forming a strategic alliance Becoming a multinational corporation Challenges of Working in an International Environment Deal with customers, suppliers, and employees from different countries

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 10 McGraw-Hill Doing Business Globally Understanding Foreign Cultures Different cultural attitudes Coalitions of Cooperating Countries and Trading Blocs Coalition EU OPEC NAFTA

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 11 McGraw-Hill Doing Business Globally Political Changes Most dramatic illustration Human Rights and Ethics Close plants? Strike a balance

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 12 McGraw-Hill Doing Business Globally Managing Change Change as a Global Issue Types of Change: –Technological –Environmental –Internal

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 13 McGraw-Hill The Change Process Change Lewin’s Three-Step Model for Change Unfreezing New alternative Refreezing

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 14 McGraw-Hill The Change Process Resistance to Change Normal reaction Organizational resistance Reasons for resisting change: – fear of unknown – economics – fear of skills loosing value – threats to power – additional work – threats to interpersonal relations

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 15 McGraw-Hill The Change Process Reducing resistance to change –Four basic situations –Ways to reduce resistance & build commitment: build trust discuss upcoming change involve the employee ensure change reasonableness avoid threats, and follow a sensible time schedule

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 16 McGraw-Hill The Change Process Leading change – Kotter’s eight-step method – Establish a sense of urgency – Create a guiding coalition – Develop a vision and strategy – Communicate the change vision – Empower broad-based action – Generate short-term wins – Consolidate gains and produce more change – Anchor new approaches in the culture

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 17 McGraw-Hill The Change Process Organizational Development The human side of organization Ultimate goal of OD Diagnoses Review available records, survey questionnaire, personal interviews, direct observations Change planning Intervention/Education Direct feedback, team building, sensitivity training Evaluation

© 2009 The McGraw-Hill Companies, Inc. All rights reserved. 18 McGraw-Hill Managing Innovation Robert Tucker’s 4 Principles Ability to innovate is critical as rate of change increases The Learning Organization Peter Senge’s five principles –System’s thinking –Personal mastery –Mental models –Shared vision –Team learning