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  • 1. Introduction to Business Management PART I: Introduction 2 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 2. Introduction to Business Management Learning Outcomes After this class, I will be able to: ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 3. Introduction to Business Management 1. Describe the three waves in modern social history and their implications for organizations. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 4. Introduction to Business Management 2. Explain the importance of viewing management from a global perspective. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 5. Introduction to Business Management 3. Identify the ways in which technology is changing the manager’s job. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 6. Introduction to Business Management 4. Describe the difference between an e-business, e- commerce, and an e- organization. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 7. Introduction to Business Management 5. Define social responsibility and ethics. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 8. Introduction to Business Management 6. Explain what is meant by the term entrepreneurship and identify the components of the entrepreneurial venture. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 9. Introduction to Business Management 7. Describe the management implications of a diversified workforce. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 10. Introduction to Business Management 8. Identify which work/life concepts are affecting employees. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 11. Introduction to Business Management 9. Explain why many corporations in the west have downsized. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 12. Introduction to Business Management 10. Describe the key variables for creating a customer- responsive culture. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 13. Introduction to Business Management 11. Explain why companies focus on quality and continuous improvement. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 14. Introduction to Business Management The Changing Global Economy Agriculture – Until the late nineteenth century, all economies were agrarian. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 15. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 16. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 17. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 18. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 19. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 20. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 21. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 22. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 23. Introduction to Business Management A Global Marketplace • Global village – The concept of a boundaryless world; the production and marketing of goods and services worldwide. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 24. Introduction to Business Management A Global Marketplace • Borderless organization – A management structure in which internal arrangements that impose artificial geographic barriers are broken down ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 25. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 26. Introduction to Business Management Stages of Going Global Exhibit 2.3 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 27. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 28. Introduction to Business Management Globalization’s Effect On Managers • Hofstede’s framework for assessing cultures: Power distance – quot;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.quot; (Hofstede, p. 262). ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 29. 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.” ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 30. Introduction to Business Management Globalization’s Effect On Managers • Hofstede’s framework for assessing cultures: – Individualism versus collectivism – “Individualism is quot;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.quot; ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 31. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 32. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 33. 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 quot;time horizon,quot; or the importance attached to the future versus the past and present. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 34. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 35. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 36. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 37. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 38. 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? ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 39. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 40. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 41. Introduction to Business Management What Defines an E- Business? Exhibit 2.5 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 42. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 43. 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? ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 44. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 45. Introduction to Business Management Society’s Expectations of Business ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 46. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 47. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 48. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 49. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 50. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 51. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 52. 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. ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 53. Introduction to Business Management ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 54. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 55. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 56. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 57. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 58. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 59. Introduction to Business Management Shaping a Customer- Responsive Culture Exhibit 2.10 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 60. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology
  • 61. 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 ALL RIGHTS RESERVED No part of this document may be reproduced without written approval from Limkokwing University of Creative Technology