Introduction to Business Management
PART I: Introduction
2
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Introduction to Business Management
Learning Outcomes
After this class, I will be
able to:
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Introduction to Business Management
1. Describe the three waves in
modern social history and
their implications for
organizations.
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Introduction to Business Management
2. Explain the importance of
viewing management from a
global perspective.
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Introduction to Business Management
3. Identify the ways in which
technology is changing the
manager’s job.
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Introduction to Business Management
4. Describe the difference
between an e-business, e-
commerce, and an e-
organization.
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Introduction to Business Management
5. Define social responsibility
and ethics.
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Introduction to Business Management
6. Explain what is meant by
the term entrepreneurship
and identify the components
of the entrepreneurial
venture.
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Introduction to Business Management
7. Describe the management
implications of a diversified
workforce.
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Introduction to Business Management
8. Identify which work/life
concepts are affecting
employees.
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Introduction to Business Management
9. Explain why many
corporations in the west
have downsized.
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Introduction to Business Management
10. Describe the key variables
for creating a customer-
responsive culture.
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Introduction to Business Management
11. Explain why companies
focus on quality and
continuous improvement.
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Introduction to Business Management
The Changing Global Economy
Agriculture
– Until the late
nineteenth century, all
economies were
agrarian.
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Introduction to Business Management
The Changing Global Economy
Agriculture
• Agriculture continues
to dominate the
Cambodian economy,
accounting for 43%
of the country’s GDP
and employing 75%
of the labour force.
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Introduction to Business Management
The Changing Global Economy
Industrialization
– From the late 1800s until
the 1960s, most developed
countries moved from
agrarian societies to
industrial societies.
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Introduction to Business Management
The Changing Global Economy
Industrialization
There are now more than 250
garment factories operating in
Cambodia. Better Factories
Cambodia estimated that the
number of garment
enterprises rose by 13 last
year. In 2005, Cambodia
exported garments worth 2.17
billion dollars
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Introduction to Business Management
The Changing Global Economy
Information
– Information technology is transforming
society from its manufacturing focus to one of
service. More people, are going more places,
more often than ever before.
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Introduction to Business Management
The Changing Economy
Old Economy New Economy
• Naional borders limit competition • National borders no longer define an
• Technology reinforces rigid hierarchies organization’s operating boundaries
and limits access to information • Technological change makes information
• Job opportunities are for blue-collar more accessible
industrial workers • Job opportunities are for knowledge
• Population is relatively homogeneous workers
• Business is estranged from its • Population is characterized by cultural
environment diversity
• Economy is driven by large • Business accepts its social responsibilities
corporations • Economy is driven by small
• Customers get what business chooses entrepreneurial firms
to give them • Customer needs drive business
Exhibit 2.1
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Introduction to Business Management
The Changing Economy
Old Economy New Economy
• Naional borders limit competition • National borders no longer define an
• Technology reinforces rigid hierarchies organization’s operating boundaries
and limits access to information • Technological change makes information
• Job opportunities are for blue-collar more accessible
industrial workers • Job opportunities are for knowledge
• Population is relatively homogeneous workers
• Business is estranged from its • Population is characterized by cultural
environment diversity
• Economy is driven by large • Business accepts its social responsibilities
corporations • Economy is driven by small
• Customers get what business chooses entrepreneurial firms
to give them • Customer needs drive business
Exhibit 2.1
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Introduction to Business Management
The Changing Economy
Old Economy New Economy
• Naional borders limit competition • National borders no longer define an
• Technology reinforces rigid hierarchies organization’s operating boundaries
and limits access to information • Technological change makes information
• Job opportunities are for blue-collar more accessible
industrial workers • Job opportunities are for knowledge
• Population is relatively homogeneous workers
• Business is estranged from its • Population is characterized by cultural
environment diversity
• Economy is driven by large • Business accepts its social responsibilities
corporations • Economy is driven by small
• Customers get what business chooses entrepreneurial firms
to give them • Customer needs drive business
Exhibit 2.1
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Introduction to Business Management
The Changing Economy
Old Economy New Economy
• National borders limit competition • National borders no longer define an
• Technology reinforces rigid hierarchies organization’s operating boundaries
and limits access to information • Technological change makes information
• Job opportunities are for blue-collar more accessible
industrial workers • Job opportunities are for knowledge
• Population is relatively homogeneous workers
• Business is estranged from its • Population is characterized by cultural
environment diversity
• Economy is driven by large • Business accepts its social responsibilities
corporations • Economy is driven by small
• Customers get what business chooses entrepreneurial firms
to give them • Customer needs drive business
Exhibit 2.1
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Introduction to Business Management
A Global Marketplace
• Global village
– The concept of a boundaryless world; the
production and marketing of goods and
services worldwide.
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Introduction to Business Management
A Global Marketplace
• Borderless organization
– A management structure in which internal
arrangements that impose artificial geographic
barriers are broken down
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Introduction to Business Management
Global Competition
• Multinational corporations (MNCs)
– Companies that maintain significant operations in two or more
countries simultaneously but are based in one home country.
• Transnational corporation (TNC)
– A company that maintains significant operations in more than
one country simultaneously and decentralizes decision making in
each operation to the local country.
• Strategic alliances
– A domestic firm and a foreign firm share the cost of developing
products or building production facilities in a foreign country.
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Introduction to Business Management
Stages of Going Global
Exhibit 2.3
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Introduction to Business Management
Globalization’s Effect On Managers
• Hofstede’s framework for assessing cultures:
– Power distance
– Individualism versus collectivism
– Quantity of life versus quality of life
– Uncertainty avoidance
– Long-term versus short-term orientation
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Introduction to Business Management
Globalization’s Effect On Managers
• Hofstede’s framework for assessing cultures:
Power distance
– \"Power distance is the extent to which less
powerful members of institutions and
organizations within a country expect and
accept that power is distributed unequally.\"
(Hofstede, p. 262).
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Introduction to Business Management
Globalization’s Effect On Managers
• Hofstede’s framework for assessing cultures:
Power distance
“Power distance also describes the extent to
which employees accept that superiors have
more power than they have. Furthermore that
opinions and decisions are right because of
the higher position some has.”
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Introduction to Business Management
Globalization’s Effect On Managers
• Hofstede’s framework for assessing cultures:
– Individualism versus collectivism
– “Individualism is \"the opposite of collectivism;
together they form on of the dimensions of
national cultures. Individualism stands for a
society in which the ties between individuals
are loose: everyone is expected to look after
himself or herself and his or her immediate
family only.\"
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Introduction to Business Management
Globalization’s Effect On Managers
• Hofstede’s framework for assessing cultures:
– Quantity of life versus quality of life
– Quantity of life measures how much one
prefers assertiveness, materialism, and
competition; i.e. capitalistic self-interest.
– Quality of life measures how much one
prefers relationships and empathy.
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Introduction to Business Management
Globalization’s Effect On Managers
• Hofstede’s framework for assessing cultures:
– Uncertainty avoidance
– This reflects the extent to which members of
a society attempt to cope with anxiety by
minimizing uncertainty. Cultures that scored
high in uncertainty avoidance prefer rules
(e.g. about religion and food) and structured
circumstances, and employees tend to remain
longer with their present employer.
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Introduction to Business Management
Globalization’s Effect On Managers
• Hofstede’s framework for assessing cultures:
– Long-term versus short-term orientation
– Long vs. short term orientation - describes a
society's \"time horizon,\" or the importance
attached to the future versus the past and
present.
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Introduction to Business Management
Globalization’s Effect On Managers
• Parochialism
– A narrow focus in which one sees things solely through
one’s own view and from one’s own perspective
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Introduction to Business Management
Global Leadership and Organizational
Behavior Effectiveness (GLOBE)
• An ongoing cross-cultural • Cultural Dimensions
investigation of leadership and – Assertiveness
national culture
– Future orientation
– Confirms and extends – Gender differentiation
Hofstede’s earlier work on
national cultural – Uncertainty avoidance
dimensions and leadership. – Power distance
– Also found that the – Individualism/Collectivism
strength of cultural – In-group collectivism
dimensions appear to be
– Performance orientation
changing.
– Humane orientation
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Introduction to Business Management
GLOBE Highlights
Source: M. Javidan and R. J. House, “Cultural Acumen for the Global Manager: Lessons Exhibit 2.4
from Project GLOBE,” Organizational Dynamics, Spring 2001, pp. 289–305.
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Introduction to Business Management
GLOBE Highlights
Source: M. Javidan and R. J. House, “Cultural Acumen for the Global Manager: Lessons Exhibit 2.4 (cont’d)
from Project GLOBE,” Organizational Dynamics, Spring 2001, pp. 289–305.
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Introduction to Business Management
GLOBE Highlights
Last week, in your groups, you picked out some
example businesses. We described their differences.
Now using Hofstede’s and Globe’s highlights describe
how you would expect staff in the same businesses to
behave if they were situated in Denmark, Vietnam,
Argentina, Morocco, and the UK?
How would these differences affect the way they do
business?
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Introduction to Business Management
Emphasis on Technology
• Technology
– Any 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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Introduction to Business Management
Internet Business Terms
• E-commerce
– Any computer transaction that occurs when data are
processed and transmitted over the Internet
• E-organization
– The applications of e-business concepts offered to
stakeholders.
• E-business
– The full breadth of activities included in a successful
Internet-based enterprise
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Introduction to Business Management
What
Defines
an E-
Business?
Exhibit 2.5
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Introduction to Business Management
In What Ways Does Technology Alter A
Manager’s Job?
• Effectiveness and efficiency
– Managers have access to more complete and accurate
information than before, enabling them to function as
better managers.
• Place
– Telecommuting: the linking of a worker’s computer
and modem with those of co-workers and
management at an office.
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Introduction to Business Management
In What Ways Does Technology Alter A
Manager’s Job?
• Write down 3 major technologies your businesses will
use… In which way could they operate to improve
effectiveness and efficiency. What happens if they break
down or a skilled operator leaves?
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Introduction to Business Management
Society’s Expectations of Business
• Social responsibility
– A firm’s obligation, beyond that required by the law
and economics, to pursue long-term goals that are
beneficial to society.
• Social obligation
– The obligation of a business to meet its economic and
legal responsibilities and no more.
• Social responsiveness
– The ability of a firm to adapt to changing societal
conditions.
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Introduction to Business Management
Society’s Expectations of Business
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Introduction to Business Management
Arguments for Social Responsibility
• Public expectations
• Balance of responsibility and
• Long-run profits power
• Ethical obligation • Stockholder interests
• Public image • Possession of resources
• Better environment • Superiority of prevention over
• Discouragement of further cures
government regulation
Source: Adapted from R. J. Monsen Jr., “The Social Attitudes of Management,”
in J. M. McGuire, ed. Contemporary Management: Issues and Views (Upper
Saddle River, NJ: Prentice Hall, 1974), p. 616: and K. Davis and W. Frederick,
Business and Society: Management, Public Policy, Ethics, 5th ed. (New York:
McGraw-Hill, 1984), pp. 28–41.
Exhibit 2.6
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Introduction to Business Management
Arguments against Social
Responsibility
• Violation of profit maximization
• Dilution of purpose
• Costs
• Too much power
• Lack of skills
• Lack of accountability
• Lack of broad public support
Source: Adapted from R. J. Monsen Jr., “The Social Attitudes of Management,”
in J. M. McGuire, ed. Contemporary Management: Issues and Views (Upper
Saddle River, NJ: Prentice Hall, 1974), p. 616: and K. Davis and W. Frederick, Exhibit 2.6 (cont’d)
Business and Society: Management, Public Policy, Ethics, 5th ed. (New York:
McGraw-Hill, 1984), pp. 28–41.
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Introduction to Business Management
Ethics and Business
• Ethics
– A set of rules or principles that defines right
and wrong conduct
• Code of ethics
– A formal document that states an
organization’s primary values and the ethical
rules it expects managers and operatives to
follow
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Introduction to Business Management
Three Views of Ethics
• Utilitarian view of ethics
– Making decisions solely on the basis of their outcomes
or consequences.
• Rights view of ethics
– Respecting and protecting individual liberties and
privileges
• Theory of justice view of ethics
– Fairly and impartially imposing and enforcing rules.
Source: G. F. Cavanaugh, D. J. Moberg, and M. Valasquez, “The Ethics of Exhibit 2.7
Organizational Politics.” Academy of Management Journal (June 1981): 363–74.
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Introduction to Business Management
What Is Entrepreneurship?
• Entrepreneurship
– The process of initiating a business venture, organizing
the necessary resources, and assuming the risks and
rewards
• Steps in the entrepreneurial process
– Exploring the entrepreneurial context.
– Identifying opportunities and competitive advantages
– Starting the venture.
– Managing the venture
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Introduction to Business Management
What Do Entrepreneurs Do?
• No two entrepreneurs are exactly alike
– They are creating something new, something different.
– They’re searching for change, responding to it, and exploiting it.
• Entrepreneur
– A persons within an organization who demonstrates
entrepreneurial characteristics—has confidence in his or her
abilities, is willing to seize opportunities for change, and expects
surprises and capitalizes on them.
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Introduction to Business Management
Diversity and the Workforce of 2010
• Increasing workforce diversity
– More variation in the background of organizational
members in terms of gender, race, age, sexual
orientation, and ethnicity
• Characteristics of the future workforce
– More heterogeneous/diverse
– Increasingly older
– More multicultural
• Diversity will require more managerial sensitivity to
individual differences.
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Introduction to Business Management
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Introduction to Business Management
Mars Incorporated Diversity Philosophy
“Distinctive voices working together within a common
culture” is one of the ways we have described how we do
business at Mars. We believe that the success of our
business can be enhanced by having a workforce made
up of associates from many different backgrounds, much
as our society and consumer base consist of a wide
variety of individuals. We value the talents and
contributions of our diverse workforce in reaching toward
our future and in playing responsible leadership roles.
Exhibit 2.8
Source: www.mars.com/other_policies/diversity.as
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Introduction to Business Management
Labor Supply and Demand Adjustments
• Downsizing
– An activity in an organization designed to create a
more efficient operation through extensive layoffs
• Rightsizing
– Linking staffing levels to organizational goals
• Outsourcing
– An organization’s use of outside firms for providing
necessary products and services
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Introduction to Business Management
Flexible Workforces
• Core employees
– The small group of full-time employees of an
organization who provide some essential job
tasks for the organization
• Contingent workforce
– Part-time, temporary, and contract workers
who are available for hire on an as-needed
basis
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Introduction to Business Management
Contingent Workers
• Part-time employees
– Work fewer than 40 hours a week
– Are a good source of staffing for peak hours.
– May be involved in job sharing
• Temporary employees
– Are generally employed during peak periods
– Can fill in for employees for an extended period of time
– Create a fixed labor cost during a specified period
• Contract workers
– Are hired by organizations to work on specific projects.
– Are paid when the firm receives particular deliverables.
Exhibit 2.9
– Are a labor cost that is fixed by contract
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Introduction to Business Management
Making a Company’s Culture More
Customer-responsive
• Actions that create employees with the competence, ability, and
willingness to solve customer problems as they arise:
– Selection: hiring the right personalities and attitudes
– Training: developing the customer-focus employees
– Organizing: creating customer-friendly controls
– Empowerment: independence in relating to customers
– Leadership: commitment to the customer-focus vision
– Evaluation: performance measured by behaviors
– Rewards: contingent on outstanding customer service
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Introduction to Business Management
Shaping a
Customer-
Responsive
Culture
Exhibit 2.10
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Introduction to Business Management
Increased Concern for Quality
• Continuous improvement
– Organizational commitment to constantly improving
the quality of a product or service
• Joseph Juran
• W. Edwards Deming
– Kaizen: the Japanese term for an organization
committed to continuous improvement
• Work process engineering
– Radical or quantum change in an organization
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Introduction to Business Management
Components of Continuous Improvement
1. Intense focus on the customer.
2. Concern for continuous improvement.
3. Improvement in the quality of everything the
organization does.
4. Accurate measurement.
5. Empowerment of employees.
Exhibit 2.11
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