—Introduction to ManagementWEEK TEN THE EXCEPTIONAL MANAGER.docx

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Introduction to Management
WEEK TEN: THE EXCEPTIONAL MANAGER -STRATEGY
Semester 1, 2019
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2019 Course Experience Survey
(CES)
Tell us what you think
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Your feedback is valuable

Every semester, we ask students to give us feedback on what
works well and what needs to be improved
It’s called the Course Experience Survey (CES) and it helps us
improve teaching, course design and content for you
It takes about 10 minutes to complete online
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For those cynics out there…
The CES matters – it’s part of making sure we’re doing a good
job
The CES works – it has delivered a lot of improvements to what
we do and you get
It helps you and those who come after you
It helps us
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Your feedback has an impact
Examples of change from student feedback:
Change to group sizes
Updated and more relevant content and examples
Change in class format
Change in lab tasks
Changes in assessment
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When is it happening?
The CES goes online each semester.
Semester 1 2019 CES dates
HE: Start: 6 May 2019 End: 2 June 2019
VE: Start: 6 May 2019 End: 2 June 2019
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What devices can be used to access the survey?
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iPad
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There are 3 options to access the survey
1. Find the survey link in your student inbox
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Click link in email
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Student login is required

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3. Access via myRMIT
under ‘Launch Application’
click on ‘Student Survey’
Any questions?
Email to [email protected]
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Any incentives to complete the CES?
All completed surveys will be placed in a raffle to win an iPad.

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Objectives of this Lecture
What does it take to be an exceptional manager?
Am I really managing if I don’t have a strategy?
Review of best-known classic strategy theories
How does effective execution help managers during the
strategic-management process?
Functions of Management
Managing emotions at work & employees
The exceptional manager: strategy
Networking to build e-portfolios
Course Review

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The skills exceptional managers need
Technical skills
– the job-specific knowledge needed to perform well in a
specialised field
Conceptual skills
– the ability to think analytically, to visualise an
organization as a whole and understand how the parts work
together
Human skills
– the ability to work well in cooperation with other people
to get things done
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In the 1970s researcher Robert Katz identified three skills that
are very important to being an exceptional manager: technical,
conceptual and human skills.
Ask your students to think of a manager who had one or two of
these skills, but not all three. What was the negative impact to
the business, in their opinion? Why is it important to have all
three?
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Tse Leng Tham (TLT) - Also how empahsis on different skills
are more important at different levels of management?

Five hallmarks of a good manager
Gives employees challenging work to do
Creates space for employees to demonstrate their capacity to do
a good job
Provides support when needed in ways that offer feedback
without interfering in the work they have asked others to do
Gives recognition and praise when a piece of work is done well
Is not afraid to make tough decisions
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Can students think of anything else that might be a hallmark of
a good manager?
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Strategy, strategic management
and strategic planning
Strategy
Large-scale action plan that sets the direction for an
organisation
Strategic management
Process that involves managers from all parts of the
organisation in the formulation and implementation of strategies
and strategic goals
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Why strategic management and planning are important
An organisation should adopt strategic management and
planning for three reasons:
Provide direction and momentum
Encourage new ideas
Develop a sustainable competitive advantage
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There are three reasons why businesses should adopt planning
and strategic management. We’ll discuss each of these in the
slides to follow.
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Direction and momentum
Why are direction and momentum important?
Unless a plan is in place, managers may just focus on whatever
is in front of them, ‘putting out fires’.
Managers may be so preoccupied with day-to-day pressures that
their organisation can lose momentum.
Examples to consider
How Amazon.com has affected Borders bookstores
The impact of Uber on taxis
What blogs and internet news have meant for newspapers
The impact of microbreweries on mass produced beer
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Why do businesses need direction and momentum? The main
reason is so that competitors are less likely to sneak up on
them! Presented are four examples students may be familiar
with and which give a good idea about what can happen when
businesses take their customers for granted. If they do this, they
risk losing market share.
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Encourage new ideas
Strategic planning can help encourage new ideas by stressing
the importance of innovation.
Management scholar Gary Hamel says that companies such as
Apple have been successful because they have been able to
unleash the spirit of ‘strategy innovation’.
Strategy innovation
The ability to reinvent the basis of competition within existing
industries —‘bold new business models that put incumbents on
the defensive’
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Can students see why Apple might be described as having
‘strategy innovation’?
It was a company that was still competing in the personal
computer market, but they upended the entire industry with the
introduction of the ‘smart phone’ (iPhone) to the market.

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Sustainable competitive advantage
Competitive advantage
The ability of an organisation to produce goods or services
more effectively than its competitors do, thereby outperforming
them
Sustainable competitive advantage
Occurs when an organisation is able to get and stay ahead in
four areas:
In being responsive to customers
In innovating
In quality
In effectiveness
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The final reason why planning and strategic management are
important is to develop a sustainable competitive advantage.
The key here is that an organisation can get ahead – and stay
ahead – in four areas.
Example: It’s generally agreed that the ‘frightful five’
companies that dominate the internet economy are Amazon,
Apple, Facebook, Google and Microsoft. But, in the struggle for
competitive advantage, the state of play is constantly shifting.
‘Not long ago people thought IBM, Cisco Systems, Intel, and
Oracle were unbeatable in tech’, Farhad Manjoo (a technology
writer) observes. ‘They’re all still large companies, but they’re
far less influential than they were once.’ Meanwhile, Yahoo!,
once a huge success story, may be running out of time, its
advertising revenues slipping far behind those of its rivals, and

its decline hastened by the rise of mobile devices and social
media.
Ask students if they can visualise one of the ‘frightful 5’
internet companies losing their competitive advantage. How
would it come about?
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What is an effective strategy?
Strategic positioning
Developed by famous strategist Michael Porter
Attempts to achieve sustainable competitive advantage by
preserving what is distinctive about a company
‘Performing different activities from rivals, or performing
similar activities in different ways’
Michael Porter
Cmproject/CC BY-SA 4.0
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Michael Porter is a name students should know (or learn). This
Harvard Business School professor ‘is the single most important
strategist working today, and maybe of all time’, raved Kevin
Coyne of consulting firm McKinsey & Co. He is ‘the most
famous and influential business professor who has ever lived’,
says Fortune writer Geoffrey Colvin. ‘He is widely and rightly
regarded as the all-time greatest strategy guru.’
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What is an effective strategy?
Three principles
Strategy is the creation of a unique and valuable position:
Few needs, many customers
Broad needs, few customers
Broad needs, many customers
2. Strategy requires trade-offs in competing
3. Strategy involves creating a 'fit' among activities
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Three key principles underlie the unique and valuable position
(p. 196)
Few needs, many customers: Strategic position can be derived
from serving the few needs of many customers. Example:
Bridgestone provides only tires and Midas provides a limited
range of car repairs and services, but both provide their service
to all kinds of people with all kinds of motor vehicles.
Broad needs, few customers: A strategic position may be based
on serving the broad needs of just a few customers. Example:
the Bank of Baroda opened in New Zealand mainly to service
Indian residents.
Broad needs, many customers: Strategy may be oriented toward
serving the broad needs of many customers. Example: IKEA
establishes its home furnishing stores only in places that give
access to populations of upwards of 500 000, which is one
reason IKEA has yet to open a store in NZ.
2. Requires trade-offs—a company has to choose not only what
strategy to follow but what strategy not to follow. Example:
Neutrogena soap, points out Porter, is positioned more as a

medicinal product than as a cleansing agent. In achieving this
narrow positioning, the company gives up sales based on
deodorising, gives up large volume and accordingly gives up
some manufacturing efficiencies.
3. ‘Fit’ has to do with the ways a company’s activities interact
and reinforce one another. Example: A budget airline that
follows a low-cost strategy and aligns all its activities
accordingly. So they might pay lower wages and have fewer
cabin crew but offer more flexible working arrangements, more
seats per plane and a shorter turnaround time at airports.
Multimedia Lecture Support Package to Accompany Basic
Marketing
Lecture Script 6-20
The strategic-management process
Figure 6.1
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There are 5 steps to the strategic management process. These
will be outlined in the slides to follow.
Step 1: Establish the mission and vision
Step 2: Establish the grand strategy
Step 3: Formulate the strategic plans
Step 4: Carry out the strategic plans
Step 5: Maintain strategic control
See Appendix 1 at the end of these slides for more detail on
Figure 6.1
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Question

Zach manages a small coffee shop. In order to determine if
strategic planning will be likely to help his business, Zach
should assess:
How many competitors he has
Foot traffic passing by his location
His profitability in the prior six months
Industry trends
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The correct answer is A.
Rationale: strategic planning is not likely to result in a
significant improvement unless Zach is in a highly competitive
business.
Marketing
Lecture Script 6-22
Step 1: Establishing the mission statementDoes your company’s
mission statement answer these questions?1. Who are our
customers?2. What are our major products or services?3. In
what geographical areas do we compete?4. What is our basic
technology?5. What is our commitment to economic
objectives?6. What are our basic beliefs, values, aspirations and
philosophical priorities?7. What are our major strengths and
competitive advantages?8. What are our public responsibilities
and what image do we wish to project?9. What is our attitude
toward our employees?10. How are we different to our
competitors?

Table 6.1 (1 of 2)
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Characteristics of a good mission statement: The mission is the
organisation’s purpose or reason for being; it is expressed in a
mission statement.
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Step 2: Establishing the vision statement
Does your company’s vision statement answer these
questions?1. Is it appropriate for the organisation and for the
times?2. Does it set standards of excellence and reflect high
ideals?3. Does it clarify purpose and direction?4. Does it
inspire enthusiasm and encourage commitment?5. Is it well
articulated and easily understood?6. Does it reflect the
uniqueness of the organisation, its distinctive competence, what
it stands for and what it’s able to achieve?7. Is it ambitious?
Source: F. R. David, How companies define their mission, Long
Range Planning, February 1989: 90–7; and B. Nanus, Visionary
Leadership: Creating a Compelling Sense of Direction for Your
Organisation, San Francisco: Jossey-Bass, 1992: 28–9.
Table 6.1 (2 of 2)
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Characteristics of a good vision statement: An organisation’s
vision, its long-term goal of what it wants to become, is
expressed in a vision statement which describes its long-term
direction and strategic intent.
24

Step 3: Establish the grand strategy
Grand strategy
Comes after assessing the current reality through a rigorous
analysis of where the organisation is presently heading and
determining where it should be heading in the future
Explains how the organisation’s mission is to be accomplished
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Three common grand strategies
Growth strategy
Involves expansion of sales revenues, market share, number of
employees or number of customers or (for nonprofits) clients
served
Stability
Involves little or no significant change
Defensive
Involves reduction in the organisation’s efforts
Retrenchment
Stable strategy. Shotover Jet has a strategy of maintaining its
jet boat rides down the Shotover River as an adventure tourist
experience unique to Queenstown and New Zealand.
Courtesy Ngai Tahu Tourism Southern

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Growth strategy example: Etsy is a Brooklyn, New York,
company that runs an online marketplace for handmade and
vintage goods—jewellery, homewares, T-shirts—for which it
charges fees to sellers for use of its platform. The firm showed
strong growth in 2015, when revenues in the fourth quarter rose
35% to USD$87.9 million.
Stability example: Without much changing their product, the
makers of Timex watches decided to stress the theme of
authenticity (‘Wear it well’) over durability (the old slogan was
‘It takes a licking and keeps on ticking’). Or Shotover Jet from
NZ which markets its thrilling jet boat rides as a unique
experience but the importance it places on safety standards
means the company declines many requests for a licence to
operate a ‘shotover’ jet in another country.
Defensive example: ‘Big sales numbers that have sustained the
recorded music business for years are substantially down, and it
is hard to see how they could ever return to where they were
even a decade ago’, says one analysis. Example: Goodman
Fielder, the Australasian manufacturer of breads, oils, dairy
products, spreads, etc. found themselves being squeezed by
competitors so in 2011 they decided to narrow their product
range and integrate business operations in a strategy called
Project Renaissance.
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How companies can implement a grand strategy
Table 6.2
GROWTH STRATEGYSTABILITY STRATEGYDEFENSIVE
STRATEGYImprove an existing product or service to attract
more buyersGo for a no-change strategy (if, for example, it has
found that too-fast growth leads to foul-ups with orders and

customer complaints)Reduce costs, as by freezing hiring or
tightening expensesIncrease its promotion and marketing efforts
to try to expand its market shareGo for a little-change strategy
(if, for example, the company has been growing at breakneck
speed and feels it needs a period of consolidation)Sell off
(liquidate) assets—land, buildings, inventories and the
likeExpand operations, as in taking over distribution or
manufacturing previously handled by someone elseGradually
phase out product lines or servicesExpand into new products or
services.Divest part of its business, as in selling off entire
divisions or subsidiariesAcquire similar or complementary
businessesDeclare bankruptcyMerge with another company to
form a larger companyIn an attempt a turnaround—do some
retrenching, with a view toward restoring profitability
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Here are some examples of how companies can implement grand
strategies.
Can students think of examples of companies that might be
using (or have used) one of these grand strategies?
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Step 3: Formulate strategic plans
Formulate strategic plans
The grand strategy must be translated into more specific
strategic plans which determine what the organisation’s long-
term goals should be for 1–5 years
Strategy formulation
Process of choosing among different strategies and altering

them to best fit the organisation’s needs
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Step 4: Carry out the strategic plans
Strategy implementation
Putting strategic plans into effect
Dealing with roadblocks within the organisation’s structure and
culture, and seeing if the right people and control systems are
available to execute the plans
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Step 5: Maintain strategic control
Strategic control
– Consists of monitoring the execution of strategy and making
adjustments, if necessary
– To keep a strategic plan on track you need to do the
following:
Engage people
Keep it simple

Stay focused
Keep moving
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To keep a strategic plan on track, suggests Bryan Barry, you
need to do the following:
Engage people—Actively engage people in clarifying what
your group hopes to accomplish and how you will accomplish it
Keep it simple—Keep your planning simple, unless there’s a
good reason to make it more complex
Stay focused—Stay focused on the important things
Keep moving—Keep moving toward your vision of the future,
adjusting your plans as you learn what works
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Competitive intelligence
Competitive intelligence
Gaining information about your competitors’ activities so that
you can anticipate their moves and react appropriately
Includes publicity and advertising, investor information,
business associations and trade shows
The Smart electric car model displayed by Mercedes at Mondial
de l'Auto, Paris, 2008
© Idealink Photography/Alamy
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If you are a manager, one of your worst nightmares is that a

competitor will surprise you with a service or product—as
boutique beers did to major brewers and mountain bikes did to
major bicycle makers—that will revolutionise the market and
force you to try to play catch-up. Successful companies conduct
competitive intelligence. This is a search of publications,
advertising, investor information and other informal sources of
information to ensure that you know what your competitors are
up to.
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SWOT analysis (1 of 2)
Environmental scanning
Careful monitoring of an organisation’s internal and external
environments to detect early signs of opportunities and threats
that may influence the firm’s plans
SWOT analysis
SWOT process for scanning:
Internal Strengths
Internal Weaknesses
External Opportunities
External Threats
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A SWOT analysis should provide you with a realistic
understanding of your organisation in relation to its internal and
external environments so you can better formulate strategy in
pursuit of its mission.
A SWOT grid is shown on the next slide.

32
SWOT analysis (2 of 2)
Figure 6.2
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See Appendix 2 at the end of this slide deck for additional
information.
The SWOT analysis is divided into two parts—inside matters
and outside matters—that is, an analysis of internal strengths
and weaknesses and an analysis of external opportunities and
threats.
Organisational strengths: skills and capabilities that give the
organisation special competencies and competitive advantages
in executing strategies in pursuit of its mission
Organisational weaknesses: drawbacks that hinder an
organisation in executing strategies in pursuit of its mission
Organisational opportunities: environmental factors that the
organisation may exploit for competitive advantage
Organisational threats: environmental factors that hinder an
organisation from achieving a competitive advantage
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Example: SWOT characteristics that might apply to a
universityS—STRENGTHS
(INTERNAL STRENGTHS)W—WEAKNESSES
(INTERNAL WEAKNESSES) Faculty teaching and research
abilities
High-ability students
Loyal alumni
Strong interdisciplinary programs Limited programs in business

High teaching loads
Insufficient racial diversity
Lack of high-technology infrastructureO—OPPORTUNITIES
(EXTERNAL OPPORTUNITIES)T—THREATS
(EXTERNAL THREATS) Growth in many local skilled jobs
Many firms give equipment to universities
Local minority population increasing
High school students take university classes Depressed state
and national economy
High school enrolments in decline
Increased competition from other colleges
Funding from all sources at risk
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Here is an example of a SWOT that could be performed on a
typical university.
34
Question
When analysing the 'W' in SWOT analysis, Roberta, the
manager, might be assessing:
Possible challenges in the market
Competitors' actions
High turnover of employees
Good financial resources of the firm
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The correct answer is C. High turnover, as this could be viewed
as an internal weakness for the firm.
Marketing
Lecture Script 6-35
Example: How would you analyse Toyota?
Internal strengths
Attention to detail and a frugality that shuns waste of every
kind
Internal weaknesses
Parts supplied by outside companies rather than trusted
traditional suppliers
External opportunities
Stressed commitment to customers
Still ranks high in quality
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36
Forecasting: Predicting the future
Forecasting
A vision or projection of the future
Trend analysis
Hypothetical extension of a past series of events into the future
Contingency planning
Creation of alternative hypothetical but equally likely future
conditions
Also called 'scenario planning' and 'scenario analysis'

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Lots of people make predictions, of course, and often they are
wrong. In the 1950s, the head of IBM, Thomas J. Watson,
estimated that the demand for computers would never exceed
more than five for the entire world. In the late 1990s, many
computer experts predicted power outages, water problems,
transportation disruptions, bank shutdowns, and far worse
because of computer glitches (the Y2K bug) associated with the
change from the year 1999 to 2000.
Of course, the farther into the future one makes a prediction, the
more difficult it is to be accurate, especially in matters of
technology. Yet forecasting is a necessary part of planning. The
two types are trend analysis and contingency planning.
37
Porter’s five competitive forces
Porter contends that business-level strategies originate in five
primary competitive forces in the firm’s environment:
Threat of new entrants
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitute products or services
Rivalry among competitors
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Developed by Michael Porter, the five competitive forces can
help businesses strategise based on five forces: threat of new
entrants, bargaining power of suppliers, bargaining power of
buyers, threat of substitute products, and rivalry among
competitors.
Consider showing this YouTube video where Michael Porter
explains his five competitive forces (13:11):
https://youtu.be/mYF2_FBCvXw
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Porter’s four competitive strategies (1 of 2)
Cost-leadership strategy
Keep the costs of a product or service below those of
competitors while maintaining a similar level of quality and
targeting a wide market
Differentiation strategy
Offer products that are of unique and superior value compared
to those of competitors but to target a wide market
Figure 6.3 PORTER’S FOUR COMPETITIVE STRATEGIES
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There are four competitive strategies (two on this slide and two
on the next):
Cost-leadership focuses on keeping prices low in a wide
market—firms include Timex, computer maker Acer, hardware
retailer Home Depot and pen maker Bic

Differentiation focuses on unique and superior products
targeting a wide market—this is the strategy followed by Ritz-
Carlton hotels and the makers of Lexus automobiles
39
Porter’s four competitive strategies (2 of 2)
Cost-focus strategy
Keep the costs of a product below those of competitors and to
target a narrow market
Focused-differentiation
Offer products that are of unique and superior value compared
to those of competitors, and to target a narrow market
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Cost-focus keeps prices low, targeting a narrow market—often
executed with low-end products sold in discount stores, such as
low-cost beer or cigarettes, or regional petrol stations
Focused-differentiation focuses on unique and superior products
targeting a narrow market—Australian and NZ wine are good
examples but show that focused-differentiation products need
not be expensive
40
Question
The company's CEO puts pressure on the firm's R&D managers
to develop products that can be created cheaply. The firm would
be following a ________ strategy:

Cost leadership
Differentiation
Cost focus
Retrenchment
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The correct answer is A, cost leadership.
Marketing
Lecture Script 6-41
The BCG matrix
Figure 6.4
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See Appendix 3 at the end of this deck for more detail.
Developed by the Boston Consulting Group, the BCG Matrix is
a means of evaluating strategic business units on the basis of
(1) their business growth rates and (2) their share of the market.
Business growth rate is concerned with how fast the entire
industry is increasing. Market share is concerned with the
business unit’s share of the market in relation to competitors.
Market growth is divided into two categories, low and high.
Market share is also divided into low and high.
Thus, in this matrix, ‘stars’ are business units that are highly

desirable (high growth, high market share), compared to ‘dogs’,
which are not so desirable (low growth, low market share).
42
Execution: Getting things done
Execution
Consists of using questioning, analysis and follow-through in
order to mesh strategy with reality, align people with goals and
achieve results promised
A central part of any company’s strategy
Optus is a start-up company that was born out of the need for
market competition. It was the first challenger brand in the
industry and remains the biggest challenger today.
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In implementing strategy and maintaining strategic control, the
focus is on effective execution.
A survey of 769 global CEOs from 40 countries revealed that
‘excellence in execution’ was their most important concern—
more important than ‘profit growth’, ‘customer loyalty’,
‘stimulating innovation’ and ‘finding qualified employees’.
Ask students what might happen if a company does not
effectively execute its strategy and maintain strategic control?
43
Question
John owns a piano sales and tuning store. He wants to be the
biggest retailer in the region. Adding salespeople would be part

of his strategic ________.
Locution
Execution
Efficacy
fficiency
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The correct answer is B, execution. See previous slide:
Execution: Getting things done.
Marketing
Lecture Script 6-44
The three core processes of business
A company’s overall ability to execute is a function of
effectively executing according to three processes:
People—consider who will benefit you in the future
Strategy—consider how success will be accomplished
Operations—consider what path will be followed
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A company’s overall ability to execute is a function of

effectively executing according to three processes: people,
strategy and operations. Because all work ultimately entails
some human interaction, effort or involvement, Bossidy and
Charan believe that the people process is the most important.
45
What questions should a strong strategic plan address?1. What
is going on in the external environment that the business needs
to respond to?2. How well do you understand the existing
customers and markets? What are the priorities of existing
customers?3. What are the best opportunities for growth and the
barriers to realising those opportunities?4. Who is the
competition?5. Can the business execute the strategy—does it
have the capacity?6. Are the short term and long term
balanced?7. What are the important milestones to be achieved as
the strategy is implemented?8. What are the critical issues
facing the business?9. How does the business intend to generate
a sustainable income?
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In considering whether the organisation can execute the
strategy, a leader must take a realistic and critical view of its
capabilities and competencies. If it does not have the talent in
finance, sales and manufacturing to accomplish the vision, the
chances of success are drastically reduced.
46
Building a foundation for management excellence
Know your people and your business
Insist on realism

Set clear priorities
Follow through
Reward the doers
Expand people’s capabilities
Know yourself
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Know your people and your business: 'Engage intensely with
your employees'
Insist on realism: 'Don’t let others avoid reality'
Set clear priorities: 'Focus on a few rather than many goals'
Follow through: 'Establish accountability and check on results'
Reward the doers: 'Show top performers that they matter'
Expand people’s capabilities: 'Develop the talent'
Know yourself: 'Do the hard work of understanding who you
are'
47
What will we cover in the next 2 tutorials?Networking & Your
e-portfolioWeek 11Course ReviewWeek 12 Assessment 3
due

Functions of Management
Managing emotions at work & employees
The exceptional manager: strategy
Networking to build e-portfolios
Course Review
Next week
Today is the last lecture for the Semester
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—
Thank you

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Lecture 9: Managing Emotions at Work to Motivate
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KEY QUESTIONS FOR THIS WEEK
What is an emotion and why are emotions important?
What is the Broaden and Build Theory of Emotions?
What is Emotional Intelligence and why is it important?
What are the main theories of motivation?
How can emotions be used to motivate employees?

The Functions of Management work
Managing Emotions
The Exceptional Manager: Strategy
Networking
Course Review
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2
Study of emotions dates back to the 5th century BC
Emotions are integral to our lives
Human beings as emotional beings
Research shows that every minute we are in the process of

experiencing an emotion
Emotions
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Emotions have been studied since the time of Aristotle in the
5th century BC
Human beings are not just rational beings but emotional beings
as well.
Emotions are integral to our lives. In fact during every minute
of our lives we are in the process of experiencing an emotion!
3
What is an Emotion?
4
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https://www.youtube.com/watch?v=xNY0AAUtH3g
4
Definition of Emotions
‘An internal feeling state involving thoughts, physiological
changes, behavioral tendencies and expression’ (Briner &
Kiefer 2005, p. 285)

‘Affective responses to what happens in the environment’
(Härtel & Ganegoda 2008)
‘Short-lived experiences that produce coordinated changes in
people’s thoughts, actions and physiological responses’
(Fredrickson & Branigan 2005, p. 313)
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There are many definitions of emotions.
These definitions agree that emotions occur as a result of some
external or internal event, last for only short periods of time,
and involve the activation of multiple components such as facial
expressions, physiological changes, behavioral changes, and
cognitive changes.
5
Organisations are Complex
Stimuli dependant
Short-term duration
Intensity
Activation of multiple components
Different emotions give rise to different outcomes
Characteristics of an Emotion
‹#›
Emotions are stimuli dependent, i.e., they occur as a result of
some external or internal event.

They last for short periods of time
Emotions vary in their level of intensity. Some emotions such as
anger can be very intense while contentment can be mild
Emotions involve activation of multiple components such as
facial expressions, physiological changes, behavioral changes,
and cognitive changes.
Different emotions give rise to different outcomes in terms of
facial expressions, behavior, and cognitive changes. For
example, the emotion of anger is associated with feelings of
mild irritation to outright rage, visibly recognizable facial
expressions, aggressive behavior, and cognitions. Feelings of
envy on the other hand do not show unique facial expressions or
affective states but is experienced as a series of unpleasant
psychological states such as inferiority and resentment
6
How an Emotion Unfolds
Cognitive Appraisal Theory (Lazarus, 1991)
Two types of appraisals:
Primary appraisal –
motivational relevance: “How relevant is this situation to my
needs?”
motivational congruence: “Is this situation consistent or
inconsistent with my goals?”
Secondary appraisal - evaluation of one’s resources and options
for coping
‹#›
Lazarus’s Cognitive Appraisal Theory is a widely used and

cited theory on how people experience emotions.
According to this theory, when a person encounters an event,
two types of appraisals happen. Primary appraisal is when the
person evaluates how relevant the event is to him/her and how
consistent it is with his/her goals.
Then during secondary appraisal the person evaluates his/her
resources/options to cope with the event. Based on these two
appraisals, he/she experiences an emotion.
7
Positive vs Negative Emotions
Positive emotions: when an event appraised by a person as
congruent to his/her values or goals (love, happiness, pride and
contentment)
Negative emotions: when an event appraised by a person as
incongruent to his/her values or goals (anger, fear, shame,
disgust and sadness)
https://www.shutterstock.com/image-vector/human-emotion-
mind-map-positive-negative-702788215
‹#›
The difference between positive and negative emotions is one of
personal evaluations regarding the event’s effect on ones values
and goals. Hence an event appraised by a person as congruent to
his/her values or goals will lead to the elicitation of positive
emotions (love, happiness, pride, and contentment) while an
event appraised as being incongruent to one’s goals or values
will lead to feelings of negative emotions (anger, fear, shame,

disgust, and sadness).
8
Importance of Emotions
Guide behavior
Signal danger
Show the presence of stimuli that demand attention
However:
Emotions interrupt a person’s current cognitions/behavior
Extreme emotions can cause psychological problem
Emotions can impact on the way we decipher information and
their effectiveness in roles of management and leadership.
‹#›
http://time.com/5362183/the-real-fake-news-
crisis/?WT.mc_id=20180912_Eng__bhpfb&WT.tsrc=BHPFaceb
ook&linkId=56089019
There is some evidence to suggest that emotions play a role in
how we interpret news and information so it becomes very
important in consideration of what we see and read on the
internet.
Humans like to think of themselves as rational creatures, but
much of the time we are guided by emotional and irrational
thinking. Psychologists have shown this through the study of
cognitive shortcuts known as heuristics. It’s hard to imagine
getting through so much as a trip to the grocery store without
these helpful time-savers. “You don’t and can’t take the time
and energy to examine and compare every brand of yogurt,”
says Wray Herbert, author of On Second Thought: Outsmarting

Your Mind’s Hard-Wired Habits. So we might instead rely on
what is known as the familiarity heuristic, our tendency to
assume that if something is familiar, it must be good and safe.
9
Broaden and Build Theory of Positive Emotions (Fredrickson,
2001)
Positive emotions broaden a person’s momentary thought-action
repertoire
Positive emotions build-up a person’s personal physical,
intellectual, social and psychological resources over time
Negative emotions narrow a person’s momentary thought-action
repertoire
Negative emotions do not build a person’s personal resources
Image source: https://www.slideshare.net/jtneill/growth-
motivation-and-positive-psychology
‹#›
see article in canvas
10
Watch
‹#›
1. https://www.youtube.com/watch?v=UjXi6X-moxE
2. https://www.youtube.com/watch?v=stK3YPz6WTc

11
Emotions in the Workplace
The emotional lives of employees were ignored prior to 1980
The rational model of organizations prevailed
Publication of Hochschild’s (1983) book changed this stance
Today emotions at work is a recognized field of study
‹#›
Prior to 1980, the emotional lives of employees were ignored
and taken as non-existent in line with the management
philosophy accepted at the time as organizations being purely
rational systems that worked according to rational decision
making, rational planning, and rational mechanisms and
emotions were seen as irrational things that had no place in such
environments. Employees working in such organizations too
were expected to uphold this rationality and had to work with
their heads instead of their hearts.
Hochschild’s book ‘The managed heart’ changed this stance and
showed the importance of recognizing employees’ emotions.
Today employees’ emotions are not regarded as a hindrance to
management processes but are seen as necessary and useful
factors in achieving organizational outcomes.
12
Managers as Managing Emotions at Work
What is Emotional Intelligence (EQ)?
Image source:
https://corporatefinanceinstitute.com/resources/careers/soft-

skills/emotional-intelligence-quotient-eq/
‹#›
Research ahs found that employees experience a variety of
emotions at work. Some of these emotions can help employees
perform their tasks (e.g., interest, happiness, hope etc.) while
others can hinder it (e.g., anger, frustration, anxiety etc.).
Managers and leaders must manage not only their own emotions
at work but also must manage the emotions of their employees.
This is where Emotional Intelligence helps managers/leaders.
13
Emotional Intelligence
‘The capacity to reason about emotions, and of emotions
to enhance thinking. It includes the abilities to accurately
perceive emotions, to access and generate emotions so as to
assist thought, to understand emotions and emotional
knowledge, and to reflectively regulate emotions so as to
promote emotional and intellectual
growth’ (Mayer, Salovey & Caruso 2004, pp. 197)
EQ is the capacity to understand and manage one’s own
emotions and the emotions of others.
‹#›
14

Emotional IntelligenceSelf-management
skillsDimensionDefinitionSelf-awarenessThe ability to
recognize and understand your moods, emotions and drives, as
well as their effects on othersSelf-regulationThe ability to
control or re-direct disruptive impulses and moods
The propensity to suspend judgement- to think before
actingMotivationA passion to work for reasons that go beyond
money or status
a propensity to pursue goals with energy and persistence
‹#›
15
Emotional IntelligenceRelationship management
skillsDimensionDefinitionEmpathyThe ability to understand the
emotional makeup of other people
Skill in treating people according to their emotional
reactionsSocial skillThe ability to control or re-direct disruptive
impulses and moods
The propensity to suspend judgement- to think before acting
Goleman, 1998
‹#›
16
Why is EQ Important for Organizations

Leaders with high EQ are better at:
understanding and regulating their own emotions and the
emotions of others
making effective decisions
motivating followers (Ashkanasy & Daus 2002)
A workforce with high EQ can be a competitive advantage for
the organization
Supplemental reading material
‹#›
Daniel Goleman: What makes a leader?
‹#›
https://www.youtube.com/watch?v=WICq_Pj8ZUk
18
What is Motivation?

The process by which a person’s efforts are energized, directed
and sustained towards attaining a goal (Robbins et al. 2015, p.
606)
19
‹#›
Managers with high EQ generally know how to motivate staff to
engage effectively in their work and build relationships of trust
to be able to do this.
A simple model of motivation
20
‹#›
20
Example: Valuing employees and customers at ISS Australia
Why do you think ISS believes it is important to give employees
security of tenure?
Encouraging innovation. Employees at facility management
company
ISS have many roles, from grounds maintenance to aviation
security and
cleaning to name a few.

‹#›
See the example: ‘Looking for peak performance: valuing
employees and customers at ISS Australia’.
Dane Hudson, CEO of ISS Australia, says it doesn’t outsource
or employ contractors or casuals. ISS ‘believe[s] our people are
more committed to service delivery than they might be if they
were not employees’.
On the slide is a picture showing the company’s recruitment
advertisement:
https://www.au.issworld.com/our-people/engagingouremployees
Consider this and the in-text examples, and ask students to
explain how these relate to higher-level needs that could be
fulfilled through working for ISS.
21
Maslow’s hierarchy of needs
Hierarchy of needs theory proposes that people are motivated by
five levels of needs:
Physiological
Safety
Love
Esteem
Self-actualisation
Figure 11.3 MASLOW’S HIERARCHY OF NEEDS
‹#›

1. Physiological needs These are the most basic human
physical needs, in which one is concerned with having food,
clothing, shelter, comfort and self-preservation.
2. Safety needs These needs are concerned with physical
safety and emotional security, so that a person is concerned
with avoiding violence and threats.
3. Love needs Once basic needs and security are taken care of,
people look for love, friendship and affection.
4. Esteem needs After they meet their social needs, people
focus on such matters as self-respect, status, reputation,
recognition and self-confidence.
5. Self-actualisation needs The highest level of need, self-
actualisation is self-fulfilment—the need to develop one’s
fullest potential, to become the best one is capable of being.
In proposing this hierarchy of five needs, ranging from basic to
highest level, Abraham Maslow suggested that needs are never
completely satisfied. That is, our actions are aimed at fulfilling
the ‘deprived’ needs, the needs that remain unsatisfied at any
point in time. Thus, for example, once you have achieved safety
(security), which is the second most basic need, you will then
seek to fulfill the third most basic need—love (belongingness).
Although it remains popular among managers, research does not
clearly support Maslow’s theory. Still, the importance of
Maslow’s contribution is that he showed that workers have
needs beyond that of just earning money. To the extent the
organisation permits, managers should first try to meet
employees’ level 1 and level 2 needs, of course, so that
employees won’t be preoccupied with them. Then, however,
they need to give employees a chance to fulfill their higher-
level needs in ways that also advance the goals of the
organisation.
22

Alderfer’s ERG theory
ERG theory
Developed by Clayton Alderfer in the late 1960s
Assumes that three basic needs influence behaviour:
Existence (E)—we desire physiological and material wellbeing
Relatedness (R)—we desire meaningful relationships with
people and especially those significant to us
Growth (G)—we desire emotional and intellectual growth, and
to use our abilities to our full potential
‹#›
ERG theory is consistent with the finding that individual and
cultural differences influence our need states.
People are motivated by different needs at different times in
their lives. ERG theory lists three needs rather than the five in
Maslow’s theory and can be activated at a time rather than in a
hierarchy.
Alderfer's ERG theory can be used to explain someone's
motivation to work in a job because the theory is applicable to
many different narratives of employees. An effective manager
has to understand where a particular individual might exist in
the ERG schematic. In doing so, a worker's motivation can be
maximized by applying the particular set of needs to an
applicable situation. For example, if someone has started in a
job and needs the financial security of a position in order to
alleviate other costs and expenses, they might be in the
"Existence" needs of the model. Perhaps, their motivation can
be increased with incentives and financial bonuses. Since their
needs are driven by the need for basic material necessities,
incentivizing their work in this domain could increase their
motivation to work at a particular job.
For a worker who thrives on interpersonal connection and the

acknowledgement from others, their needs are in the
"Relatedness" sector. If these individuals could find greater
motivation if they were placed in a position where their
interpersonal needs or strengths could be validated, then there
could be greater motivation for these individuals to perform
better and maximize output at their jobs. Finally, the needs for
reflective "Growth" indicate that an individual has reached a
point where they wish to advance personally and move into a
realm of professional development and enhancement. For these
individuals, their motivation might exist in looking at their job
as a vocation and seeking to advance within it. Constructing
avenues of professional growth and development could enhance
the work motivation for these individuals as it fits their needs.
The ERG model is fluid, in that simultaneous needs could be
seen in one employee. Someone who is struggling to meet the
"Existence" needs could also seek a sense of "Relatedness" with
others. Managers have to understand the fluid nature of the
ERG theory and be able to apply to model in different
circumstances by knowing their employees. In knowing their
employees, managers can use the ERG model to increase
individual motivation for the model speaks to where that
particular person is at a moment in time.
Marketing
Lecture Script 6-23
Alderfer’s ERG theory (part 2)
Has been tested in China & Malaysia (2008) proving that the
theory is valid cross-culturally, not just in Western contexts
Can be used in the following situations:
Canvas job satisfaction among employees and determine how
best to reward performance
Mentor employees by developing their self-esteem
Adjust leadership styles to meet the needs of particular groups

of employees
Make adjustments in extrinsic factors during a process of
organisational change.
Caulton, J. (2012).The Development and Use of the Theory of
ERG: A Literature Review,
Emerging Leadership Journeys, 5(1), pp. 2- 8.
‹#›
McClelland’s acquired needs theory
Acquired needs theory
– Three needs are major motives determining people’s behavior
in the workplace:
Achievement—desire to achieve excellence in challenging tasks
Affiliation—desire for friendly and warm relationships
Power—desire to influence or control others
Figure 11.4 McCLELLAND’S THREE NEEDS
‹#›
David McClelland, a well-known psychologist, investigated the
needs for affiliation and power. McClelland believes that we are
not born with our needs; rather, we learn them from culture and
our life experiences.
Managers are encouraged to recognise three needs in themselves
and others, and to attempt to create work environments that are
responsive to them. The three needs, one of which tends to be
dominant in each of us, are listed here.

You can apply acquired needs theory by appealing to the
preferences associated with each need when you (1) set goals,
(2) provide feedback, (3) assign tasks, and (4) design the job.
McClelland's need for achievement underlies Maslow's self-
actualization.
25
McClelland’s acquired needs theory (example)
Work-family conflict:
Ex. 1: Need to earn an income + need for affiliation v. Need to
care for family
Also framed as: Work interfering with Family
commitments (WIF)
Ex. 2: Need for achievement (power, excel at a task, success)
v. Need for affiliation (close personal relationships)
Also framed as: Family interfering with Work
commitments (FIW)
Juliana D. Lilly, Jo Ann Duffy, Meghna Virick, (2006) "A
gender‐sensitive study of McClelland's needs, stress, and
turnover intent with work‐family conflict", Women in
Management Review, Vol. 21 Issue: 8, pp.662-680.
v
v

‹#›
Question
Patrick prefers working alone, is comfortable taking moderate
risks and feels good when accomplishing a goal. Patrick
probably has a:
High need for achievement
High need for affiliation
High need for power
Low need for achievement
‹#›
The correct answer is 'A‘, high need for achievement.
Marketing
Lecture Script 6-27
Herzberg’s two-factor theory (1 of 2)
Two-factor theory
Proposed that work satisfaction and dissatisfaction arise from
two different factors: work satisfaction from so-called
motivating factors and work dissatisfaction from so-called
hygiene factors
© Chris Ryan / age fotostock

‹#›
Hygiene factors are associated with job dissatisfaction which
affect the job context in which people work.
Motivating factors are associated with job satisfaction which
affect the job content or the rewards of work performance.
Ask students: Would a big desk in a big office with a view
represent the tangible realisation of managerial success for you?
Would this be a motivation that would make you feel more
satisfied?
28
Herzberg’s two-factor theory (2 of 2)
Hygiene factors
Factors associated with job dissatisfaction which affect the job
context in which people work
Motivating factors
Factors associated with job satisfaction which affect the job
content or the rewards of work performance
Figure 11.5 HERZBERG’S TWO-FACTOR THEORY:
SATISFACTION VERSUS DISSATISFACTION
‹#›
Figure 11.5 Herzberg’s two-factor theory: Satisfaction versus
dissatisfaction
Using two-factor theory to motivate employees, managers
should first eliminate dissatisfaction making sure that working
conditions, pay levels and company policies are reasonable.

There will always be some employees who dislike their jobs,
but the basic lesson of Herzberg’s research is that you should
first eliminate dissatisfaction (hygiene factors), making sure
that working conditions, pay levels and company policies are
reasonable. You should then concentrate on spurring motivation
by providing opportunities for achievement, recognition,
responsibility and personal growth (motivating factors).
Positive hygiene factors include allowing pets at work, offering
video game arcades, fitness classes, intramural sports
(volleyball, soccer), and providing a library of free movies,
books and magazines. If you work at Google, you could also
have a university reimbursement plan, legal aid and travel
assistance—and if you die, the company will pay your family
half your salary for a decade.
This figure is explained in more detail in Appendix 4 at the end
of this slide deck.
Marketing
Lecture Script 6-29
A comparison of the content theories
Jump to Appendix 5 for description
Figure 11.6 A COMPARISON OF NEEDS THEORIES:
MASLOW, ALDERFER, MCCLELLAND AND HERZBERG -
McClelland has no classification for lower level needs
‹#›
Note how acquired needs theory (McClelland) focuses only on

higher-level needs.
This figure is described in more detail in Appendix 5 at the end
of this slide deck.
30
Why Leaders Need To Embrace Employee Motivation?
Only 2 in 10 employees strongly agree that their performance is
managed in a way that motivates them to do outstanding work.
30% of employees strongly agree that their manager involves
them in goal setting.
Employees whose managers involve them in goal setting are
3.6x more likely than other employees to be engaged.
21% of employees strongly agree they have performance metrics
that are within their control.
14% of employees strongly agree that the performance reviews
they receive inspire them to improve.
Gallup estimates the cost of poor management and lost
productivity from employees in the U.S. who are not engaged or
actively disengaged to be between $960 billion and $1.2 trillion
per year.
The key to inspiring maximum performance ….
use a process that creates intrinsic motivation and benefits both
the team member and the company.
‹#›
https://www.forbes.com/sites/christinecomaford/2018/01/20/wh
y-leaders-need-to-embrace-employee-
motivation/#5207bc1d1272
31
How Emotions Can be Used to Motivate Employees

Employees’ emotions can give clues as to how to motivate
them.
Success - whether a person is currently moving toward goal
satisfaction or has recently
achieved a goal.
Commitment - the degree to which people are engaged with a
goal that is important to them.
Orientation –
The approach system is engaged when people are trying
to pursue potential positive outcomes.
The avoidance system is engaged when people are trying
pursue potential negative outcomes.
‹#›
32
Why is motivation important?
You want to motivate people to:
Join your organisation
Stay with your organisation
Show up for work at your organisation
Be engaged while at your organisation
Do extra for your organisation
‹#›
1. Join your organisation. You need to instill in talented
prospective workers the desire to come to work for you.

2. Stay with your organisation. Whether you are in good
economic times or bad, you always want to be able to retain
good people.
3. Show up for work at your organisation. In many
organisations, absenteeism and lateness are tremendous
problems.
4. Be engaged while at your organisation. Engaged employees
produce higher quality work and better customer service.
5. Do extra for your organisation. You hope your employees
will perform extra tasks above and beyond the call of duty (be
organisational 'good citizens').
33
Reinforcement perspectives on motivation
Reinforcement theory
Suggests that behaviour with positive consequences tends to be
repeated, whereas behaviour with negative consequences tends
not to be repeated
Pioneered by B. F. Skinner (operant conditioning) and Edward
Thorndike (law of effect)
Use of reinforcement theory to change human behaviour is
called behaviour modification
‹#›
Reinforcement evades the issue of people’s needs and thinking
processes in relation to motivation, as we described under the
need-based and process perspectives. Instead, the reinforcement
perspective, which was pioneered by Edward L. Thorndike and
B. F. Skinner, is concerned with how the consequences of a
certain behaviour affect that behaviour in the future.
Skinner was the father of operant conditioning, the process of

controlling behaviour by manipulating its consequences.
Operant conditioning rests on Thorndike’s law of effect, which
says behaviour with favourable consequences tends to be
repeated, while behaviour with unfavourable consequences
tends to disappear.
34
Four types of reinforcement (1 of 2)
Positive reinforcement
Use of positive consequences to strengthen a particular
behaviour
Negative reinforcement
Strengthening a behaviour by withdrawing something negative
Extinction
Weakening behaviour by ignoring it or making sure it is not
reinforced
Punishment
Weakening behaviour by presenting something negative or
withdrawing something positive
‹#›
Reinforcement is anything that causes a given behaviour to be
repeated or inhibited, whether praising a child for cleaning his
or her room or telling off a child for leaving a scooter in the
driveway.
Consider showing this video from Harvard University, talking
about the importance of B. F. Skinner to the field of psychology

(3:18): https://youtu.be/YIEt6TrjJXw
35
Four types of reinforcement (2 of 2)
Figure 11.10 FOUR TYPES OF REINFORCEMENT
These are different ways of changing employee behaviour.
‹#›
See Appendix 9 at the end of this slide deck for more
information.
Walk through this example with students. Can they see how
different types of reinforcement can lead to the same resulting
behaviour?
36
Why should you complete the CES (Course Experience Survey)?
The College of Business believes that you, the students, have
the ideas and voices that will help lead RMIT into the future.
The best way to make your voice heard is through the Course
Experience Survey (CES).
There are seven questions to answer. Completing the survey
provides the College with your insight on what was done well
and how we can improve our courses and programs. Recent
examples of how the CES shaped RMIT include:
Student X said: “Can I submit more of my assessments online?”
The outcome was: Approximately 80 per cent of courses now
use e-submission.

Student Y said: “I find the old computers are slow and in
desperate need of an upgrade.”
The outcome was: Over 3000 new computers were installed
across Brunswick, Bundoora and City campuses.
Please use your mobiles or laptops and go to your
my.rmit.edu.au/portal/ to locate the survey and complete it now.
When you have finished come up and help yourself to
chocolate!
Thank you for your time in completing the survey.
‹#›
37
Next Lecture?Managing Emotions at Work to MotivateWeek
9The Exceptional Manager: StrategyWeek 10 Networking to
build e-PortfolioWeek 11Course ReviewWeek 12
Assessment 2 due (week 13)
Next week
Course Review

The Functions of Management
Managing Emotions
The Exceptional Manager: Strategy
Networking
‹#›
RMIT University©2017
References
Briner, RB & Kiefer, T 2005, ‘Psychological research into the
experience of emotion at work: Definitely older but are we any
wiser?’ In NM Ashkanasy, W. Zerbe, & CEJ Härtel (eds),
Research on Emotion in Organizations: The .Effect of Affect in
Organizational Settings, 1st edn, Elsevier, pp. -281-307
Goleman, D 1998. ‘What makes a leader’, Harvard Business
Review, pp. 82-91.
Härtel, CEJ & Ganegoda, DB 2008, ‘Role of affect and
interactional justice in moral leadership’, in WJ Zerbe, CEJ
Härtel, & NM Ashkanasy (eds), Research on Emotion in
Organizations: Emotions, Ethics and Decision-Making, 4th edn,
Emerald Group Publishing, Bingley, UK, pp. 155-180.
Fredrickson, BL 2001, ‘The role of positive emotions in

positive psychology: The Broaden-and-Build Theory of Positive
Emotions’, American Psychologist, vol. 56, no. 3, pp. 218- 226.
Fredrickson, BL & Branigan, C 2005, ‘Positive emotions
broaden the scope of attention and thought-action repertoires’,
Cognition and Emotion, vol. 19, no. 3, pp. 313-332.
Lazarus, RS 1991, Emotion and Adaptation. Oxford University
Press, New York, NY.
Mayer, Salovey & Caruso 2004, ‘Emotional Intelligence:
Theory, findings and implications’, vol. 15, no. 3, pp. 197-215.
Robbins, SP, Bergman, R, Stagg, I & Coulter M 2015,
Management, Pearson, Melbourne, Australia.
References
‹#›
39
Consequences Of Hard & Soft Influence Tactics
Commitment
Resistance
Compliance
Persuasion Ingratiation & Impression management
Exchange
Silent authority
Upward appeal
Coalition formation
Information control
Assertiveness
Soft
Influence
tactics
Hard

Influence
tactics
‹#›
See p 338 McGraw chapter 10 ‘Organisational Behaviour’,
power and influence has a role in emotional intelligence.
The best way to describe how people reach when others try to
influence them: is to consider commitment, compliance and
resistance. Generally people reach more favourably to ‘soft
tacts, these soft tactics require a strong degree of EQ, and
generally build trust, ‘hard tactics to not require strong EQ and
generally impact negatively on the relationships with colleages
and staff resulting in breakdown of trust.
40
Hard & Soft Influence Tactics (examples)
Hard influence tactic:
Soft influence tactic:
‹#›
Model Of The Conflict Process
‹#›

In all an organisational contexts the functions of a manager is to
consider what should be escalated and how the escalated
behaviour should be rewarded or punished. Leaders and
Managers with a high EQ are generally good an celebrating eg’s
of effective conflict management and draw on this to reinforce
effective leadership and management practice.
42
Lecture 7: Leading to build trust in a global context
‹#›
Today we will examine the areas that impact an organisation
operating in a global context.
1
What is the nature of leadership?
Which leadership styles are appropriate in different
management situations?
How do aspects of leadership effect employer / employee
behaviours?
Why are employees and employers interested in the leaders'
capacity to build trust?

The context of managers work
Teams and Teamwork
Ethical Management
Leading in a Global Context
Managing Information in Asian Context
2
‹#›
What is leadership?

‹#›
Angela Merkel – Chancellor (Germany); Leader (EU)
Pope Francis – voice for peace, the environment, the poor, and
increasing inter-cultural understanding (Italy/Argentina)
Bono – Lead singer, U2 (persuaded debt forgiveness and AIDS
funding)
Jeff Bezos - CEO, Amazon.com (USA)
Jack Ma - Executive chairman, Alibaba Group (China)
Zhang Ruimin – CEO Haier Group (China)
José Antonio Abreu - Founder, El Sistema (Venezuela)
Malala Yousafzai - Advocate for education rights (against
Taliban)
Derek Jeter - Shortstop & captain, New York Yankees (USA)
Julia Gillard – first female prime minister of Australia
I asked you one question last week about good and bad leaders
and how do you differentiate between them. Do you remember
that question? Remember the picture from last week (Lincoln
and Hitler) I said think about them. Good leaders and bad
leaders how would you define them? How would you define
badness in terms of leadership, using leadership terms? What I
am trying to show you is that leaders are more than just logical
thinkers. They have a combination emotion and cognition.
What I am trying to show you is that they are both effective
leaders. However if you are going to try to define them as good
or bad leaders, it’s not a challenging job. We know who is good

and who is bad. What is difficult is to define what makes a
good leader and what makes a bad leader, it is not easy at all.
If we look at this picture, we can easily say who is a good
leader and a bad leader.
However, if we are to look at personality traits, how would you
apply that theory to define good leadership and bad leadership
traits. How would you use that theory to find some people who
look more fit to a situation or their position? Theory is not very
helpful at identify good from bad leaders. However we have
some examples from the readings. Can you think of any other
political or business good leaders? Why are they good leaders?
They have a positive impact on others, on society on their
country. We get to the notion of levels of analysis, micro,
macro and meso.
Let’s talk about self-interest. It’s a good indication about
selfish leaders and their orientation. There are many types of
leaders. We need to be able to understand and have a
convincing conception of leaders and leadership traits.
3
Leadership Defined
Leadership:
“a process whereby an individual influences a group of
individuals to achieve a common goal.”
‹#›
This is one way to define leadership – it is a process (read
quote)
Who agrees or does not agree with this quote and why? (take a
hand poll) Why? It’s hard to capture for all time, this concept
of leadership. It’s attached to a situation. Any other ideas?

(cloud burst open here) What’s missing here? There is no way
to measure leadership here. There are more definitions that are
more comprehensive and overarching.
4
Leadership Defined
Some definitions view leadership as:
The focus of group processes
A personality perspective
An act or behavior
The power relationship between leaders & followers
A transformational process
A skills perspective
‹#›
Components central to Leadership
Leadership
Is a process
Involves influence
Occurs within a group context
Attends to common goals
Leaders
And followers are involved together
And followers need each other
Often initiate and maintain the relationship
Are not above or better than followers

‹#›
Components central to Leadership
Management Activities
Produces order and consistency
Planning & Budgeting
Organizing & Staffing
Controlling & Problem Solving
Leadership Activities
Produces change and movement
Establishing direction
Aligning people
Motivating/Inspiring
‹#›
Leadership and Management
‹#›
Being a manager: coping with complexity
Companies manage complexity in three ways:
•Determining what needs to be done—planning and budgeting

•Creating arrangements of people to accomplish an agenda—
organising and staffing
•Ensuring that people do their jobs—controlling and problem
solving
‹#›
Retired Harvard Business School professsor John Kotter
suggests when considering management versus leadership, one
is not better than the other, they are complementary systems of
action.
9
Being a leader: coping with change
Leadership copes with change in three ways:
•Determining what needs to be done—setting a direction
•Creating arrangements of people to accomplish an agenda—
aligning people
•Ensuring that people do their jobs—motivating and inspiring
‹#›
Retired Harvard Business School professsor John Kotter
suggests when considering management versus leadership, one
is not better than the other, they are complementary systems of
action.

10
Four types of power
•Authority
–The right to perform or command; it comes with the job
•Power
–The extent to which a person is able to influence others so they
respond to orders
•Personalised power
–Power directed at helping oneself
•Socialised power
–Power directed at helping others
‹#›
Although everyone is not suited to be a good leader, evidence
shows that people can be trained to be more effective leaders. In
response, more companies are using management development
programs to build a pipeline of leadership talent. Total US
spending by organisations for leadership training was $61.8
billion in 2014 and $70.6 billion in 2015.
People who pursue personalised power—power directed at
helping oneself—as a way of enhancing their own selfish ends
may give the word power a bad name. However, there is another
kind of power, socialised power—power directed at helping
others. This is the kind of power you hear in expressions such
as ‘My goal is to have a powerful impact on my community’.
11
Five sources of power
1.Legitimate power
–Results from managers’ formal positions within the

organisation
2.Reward power
–Results from managers’ authority to reward their subordinates
3.Coercive power
–Results from managers’ authority to punish their subordinates
4.Expert power
–Results from one’s specialised information or expertise
5.Referent power
–Derived from one’s personal attraction (strong, visionary
leadership)
‹#›
12
Question
Alex compliments his co-worker Joe on the great job he has
done on the weekly report and also informs their mutual boss.
Alex is using ______ power.
A.legitimate
B.referent
C.reward
D.punishment
‹#›
The correct answer is 'C', reward power.

13
The Nature of Leadership
‹#›
The nature of leadership
Leading is the process of inspiring others to work hard to
accomplish important tasks.
It is also one of the four functions that constitute the
management process.
Planning sets the direction and objectives; organising brings
the resources together to turn plans into action; leading builds
the commitments and enthusiasm needed for people to apply
their talents fully to help accomplish plans; and controlling
makes sure things turn out in the right way.
14
Five approaches to leadership
‹#›
Trait Approach: do leaders have distinctive personality
characteristics?
Trait approaches to leadership
– Attempt to identify distinctive characteristics that
account for the effectiveness of leaders
Typical traits of successful leaders:
1.Dominance
2.Intelligence

3.Self-confidence
4.High energy
5.Task-relevant knowledge
‹#›
Traits play a central role in how we perceive leaders and they
ultimately affect leadership effectiveness. This is why
researchers have attempted to identify a more complete list of
traits that differentiate leaders from followers.
Researcher Ralph Stogdill concluded in 1948 there were five
traits that were typical of successful leaders. Steve Jobs seemed
to embody the traits of a successful leader—do his personality
traits have something to teach us about leadership?
16
Key positive leadership traits
‹#›
Traits associated with women leaders
Although there are substantially fewer women than men in
senior leadership roles but similar numbers to men in mid-level
positions
Women executives score higher than their male counterparts on
a variety of measures, from producing high-quality work to goal

setting and mentoring employees
‹#›
Women tend to have more leadership traits than men, but hold
fewer leadership positions. CEOs believe this may be because
women lack significant general management experience and
have not been around long enough to be selected.
Some people believe that male stereotyping and exclusion from
important informal networks contribute to the problem. Other
reasons may be because women are not willing to compete as
hard as men or make the necessary personal sacrifices.
Consider showing this CNN Money video about Sheryl
Sandberg’s advice for men and women (3:32):
https://youtu.be/UoIixe_WnGA
18
Male and female leadership traits compared
Research reveals the following four conclusions:
1.Men display more task leadership and women more
relationship leadership
2.Women use a more democratic or participative style than men
while men use a more autocratic and directive style
3.Female leadership is associated with more cohesion,
cooperative learning and participative communication among
team members
4.Peers, managers, direct reports and trained observers rate
women executives as more effective than men; men rate
themselves as more effective than women evaluate themselves

‹#›
Beyond the text, here is some additional information about the
differences and similarities between female and male leaders.
The increase in the number of women in the workforce has
generated much interest in understanding the similarities and
differences between female and male leaders. Research reveals
these four conclusions:
1.Men displayed more task leadership and women more
relationship leadership
2.Women used a more democratic or participative style than
men, and men used a more autocratic and directive style
3.Female leadership was associated with more cohesion,
cooperative learning and participative communication among
team members.
4.Peers, managers, direct reports and trained observers rated
women executives as more effective than men; men rated
themselves as more effective than women evaluated themselves
19
Behaviour Approach: do leaders show distinctive patterns of
behaviour?
Behavioural leadership approaches
–Attempt to determine the distinctive styles used by effective
leaders
–All models of leadership behaviour consider:
1.Task orientation, versus
2.People orientation
‹#›

Maybe what’s important to know about leaders is not their
personality traits but rather their patterns of behaviour. This is
the line of thought pursued by those interested in behavioural
leadership approaches.
All models of leadership behaviour have in common the
consideration of task orientation versus people orientation. Two
classic studies from the University of Michigan and Ohio State
University will be discussed on the next slides.
20
University of Michigan model
‹#›
Question
Jerelyn, a manager, pays close attention to employee
productivity and how efficiently the assembly line is moving.
Jerelyn is probably:
A.Path-centred
B.Job-centred
C.Employee-centred
D.Charismatic
‹#›
The correct answer is 'B', job-centred.

22
Ohio State University leadership model
‹#›
Three dimensions of situational control
•Leader–member relations
–Reflects the extent to which the leader has the support, loyalty
and trust of the work group
•Task structure
–Extent to which tasks are routine and easily understood
•Position power
–Refers to how much power a leader has to make work
assignments and reward and punish
‹#›
Once the leadership orientation is known (task-oriented or
relationship-oriented), then you determine situational control—
how much control and influence a leader has in the immediate
work environment.
There are three dimensions of situational control: leader–
member relations, task structure and position power.
For each dimension, the amount of control can be high—the
leader’s decisions will produce predictable results because he or
she has the ability to influence work outcomes. Or it can be
low—he or she doesn’t have that kind of predictability or

influence. By combining the three different dimensions with
different high or low ratings, we have eight different leadership
situations. These are represented in the diagram on the next
slide.
24
Applying situational theories
How can you make situational theories work for you?
•Step 1 Identify important outcomes
•Step 2 Identify relevant leadership behaviours
•Step 3 Identify situational conditions
•Step 4 Match leadership to the conditions at hand
•Step 5 Decide how to make the match
‹#›
What type of leadership would be most effective for this
emplyee working at a small, owner-operated grocery store? Do
you think she needs more or less task leadership? Why?
How can you make situational theories work for you? A team of
researchers proposed a general strategy managers can use across
a variety of situations. It has five steps. To describe them, let's
use the example of a sales manager.
Step 1: First identify the goal(s) you want to achieve. For
example, a sales manager’s goal might be to increase sales by
10 per cent or reduce customers’ complaints by half.
Step 2: Next identify the specific types of behaviours that may
be appropriate for the situation at hand. A sales manager might
find path–goal clarifying and supportive behaviours more
relevant for the sales team than work facilitation. Don’t try to
use all available leadership behaviours. Rather, select one or
two that appear most helpful.

Step 3: Fiedler and House both identify a set of potential
contingency factors to consider, but there may be other practical
considerations. For example, the need to manage a virtual sales
team with members from around the world will affect the types
of leadership that are most effective.
Step 4: Use your knowledge about power and influence to find
the best match between your leadership styles and behaviours,
and the situation at hand. A sales manager might find it useful
to use the empowering leadership associated with work-
facilitation behaviours and avoid directive leadership.
Step 5: Managers can use guidelines from either contingency
theory or path–goal theory: change the person in the leadership
role or change his or her behaviour. The organisation employing
the sales manager might move him or her to another position
because the individual is too directive and does not like to
empower others. Or the sales manager could change his or her
behaviour, if possible.
25
Question
Jing Wen is head of a task force consisting of her peers from
other departments in the organisation. Jing Wen has:
A.High leader–member relations
B.High task structure
C.High position power
D.Low position power
‹#›
The correct answer is ‘D’, Low position power.
26

Authentic Approach
Authentic Leadership is an approach to leadership that Focuses
on whether leadership is genuine
Emphasis on:
Trustworthiness: Building legitimacy through honest
relationships with followers
Transparency
Morally grounded leadership
Being responsive to people’s needs.
Alternatives to using the leadership approaches that only
emphasises money and profit; ignoring ethics and people
‹#›
Leadership and vision
Leadership is often associated with vision — a future that you
hope to create or achieve in order to improve on the present
state of affairs.
The term visionary leadership describes a leader who brings to
the situation a clear and compelling sense of the future, as well
as an understanding of the actions needed to get there
successfully.
Truly great leaders are extraordinarily good at turning their
visions into concrete results. Importantly, this involves the
essential ability to communicate your vision in such a way that
others commit their hard work to its fulfilment.
Visionary leaders inspire others to take the actions necessary to
turn vision into reality.
https://youtu.be/f60dheI4ARg

Five principles of visionary leadership
Challenge the process. Be a pioneer; encourage innovation and
support people who have ideas.
Show enthusiasm. Inspire others through personal enthusiasm
to share in a common vision.
Help others to act. Be a team player and support the efforts and
talents of others.
Set the example. Provide a consistent role model of how others
can and should act.
Celebrate achievements. Bring emotion into the workplace and
rally ‘hearts’ as well as ‘minds’.
27
Transformational Approach
Transformational leadership
–Transforms employees to pursue organisational goals over
self-interests
–Leaders are influenced by individual characteristics and
organisational culture
–Whereas transactional leaders try to get people to do ordinary
things, transformational leaders encourage their people to do
exceptional things
‹#›
It’s important to note that transactional leadership is an
essential prerequisite to effective leadership, and the best
leaders learn to display both transactional and transformational
styles of leadership to some degree. Research suggests that
transformational leadership leads to superior performance when
it augments or adds to transactional leadership.
Transformational leaders, in one description, ‘engender trust,

seek to develop leadership in others, exhibit self-sacrifice, and
serve as moral agents, focusing themselves and followers on
objectives that transcend the more immediate needs of the work
group’. Whereas transactional leaders try to get people to do
ordinary things, transformational leaders encourage their people
to do exceptional things—significantly higher levels of intrinsic
motivation, trust, commitment and loyalty—that can produce
significant organisational change and results.
Can students think of some examples of transformational
leaders? Famous examples might include Dr. Martin Luther
King Jr, Nelson Mandela, Oprah Winfrey, Winston Churchill
and Steve Jobs.
What makes this style of leadership so appealing?
28
Four key behaviours of the
Transformational Approach
1.Inspirational motivation: ‘Let me share a vision that
transcends us all.’
2.Idealised influence: ‘We are here to do the right thing.’
3.Individualised consideration: ‘You have the opportunity to
grow and excel here.’
4.Intellectual stimulation: ‘Let me describe the great challenges
we can conquer together.’
‹#›
Martin Luther King Jr addressed the people during the March on
Washington at the Lincoln Memorial. This is where he gave his

famous ‘I have a dream’ speech. Do you think charismatic
business leaders like King are able to be more successful than
conventional and conservative managers?
29
Implications of the Transformational Approach
1.Can improve results for both individuals and groups
2.Can be used to train employees at any level
3.Requires authentic and ethical leaders
‹#›
You can use the four types of transformational behaviour just
described to improve results for individuals: such as job
satisfaction, organisational commitment and performance. You
can also use them to improve outcomes for groups—an
important matter in today’s organisation—where people tend
not to work in isolation but in collaboration with others.
Not just top managers but employees at any level can be trained
to be more transactional and transformational. This kind of
leadership training among employees should be based on an
overall corporate philosophy that constitutes the foundation of
leadership development.
While ethical transformational leaders enable employees to
enhance their self-concepts, unethical ones select or produce
obedient, dependent and compliant followers. The ethical things
that top managers should do are on the next slide.
30
Employ a code of ethicsThe company should create and enforce
a clearly stated code of ethics.Choose the right peopleRecruit,

select and promote people who display ethical behaviourMake
performance expectations reflect employee treatmentDevelop
performance expectations around the treatment of employees;
these expectations can be assessed in the performance–appraisal
processEmphasise the value of diversityTrain employees to
value diversityReward high moral conductIdentify, reward and
publicly praise employees who exemplify high moral conduct
The ethical things top managers should do be effective
transformational leaders
Source: These recommendations were derived from J. M.
Howell and B. J. Avolio, The ethics of charismatic leadership:
submission or liberation? The Executive, May 1992: 43–54.
‹#›
Question
Jim, a manager, uses rewards and discipline to motivate
subordinates, but does this as a way of helping them reach their
full potential. This is called:
A.Contingent leadership
B.Transformational leadership
C.Developmental consideration
D.Democratic leadership
‹#›
The correct answer is ‘B’, Transformational leadership.
32
Servant Leadership Approach

–Focuses on providing increased service to others—meeting the
goals of both followers and the organisation—rather than to
oneself
1. Focus on listening2. Ability to empathise with others’
feelings3. Focus on healing suffering4. Self-awareness of
strengths and weaknesses5. Use of persuasion rather than
positional authority6. Broad-based conceptual thinking7.
Ability to foresee future outcomes8. Belief they are stewards of
their employees and resources9. Commitment to the growth of
people10. Build community within and outside the organisation
‹#›
Servant leadership is not a quick-fix approach to leadership.
Rather, it is a long-term approach to life and work. It is
considered a higher leadership modality than transformational
leadership. The ten characteristics of the servant leader are
shown here.
Can students think of some examples of servant leaders?
Famous examples might include Abraham Lincoln, Eleanor
Roosevelt, Mahatma Gandhi, Saint (Mother) Teresa.
What makes these types of leaders so appealing to their
followers?
33
Values, attitudes and Behaviour
why is this important for leaders?
‹#›

34
Trust Equation -David Maister
‹#›
Source: https://trustedadvisor.com/why-trust-
matters/understanding-trust/understanding-the-trust-equation
Trust is essential to leadership. A truism indeed. But how
trustworthy are we? Is there a way to find out? And can trust be
measured? Those are questions that David Maister, Charles M.
Green and Rob Galford explored in their book, The Trusted
Advisor. Now Green has taken the endeavor one step further
with the development of an online self assessment that measures
an individual’s “Trust Quotient.”
35
Inclusive Leadership
See Supplemental Readings for more information
‹#›
In a volatile and complex world, predicting the future with
precision is a risky business. We can be sure, however, about
four global mega-trends that are reshaping the environment and
influencing business priorities:1
First, diversity of markets: Demand is shifting to emerging
markets. With their growing middle class, these new markets

represent the single biggest growth opportunity in the portfolio
of many companies around the world.
Second, diversity of customers: Customer demographics and
attitudes are changing. Empowered through technology and with
greater choice, an increasingly diverse customer base expects
better personalization of products and services.
Third, diversity of ideas: Digital technology, hyper-
connectivity, and deregulation are disrupting business value
chains and the nature of consumption and competition. Few
would argue against the need for rapid innovation.
Fourth, diversity of talent: Shifts in age profiles, education, and
migration flows, along with expectations of equality of
opportunity and work/life balance, are all impacting employee
populations.
Putting this into the context of leaders, inclusive leadership is
about:
Treating people and groups fairly—that is, based on their
unique characteristics, rather than on stereotypes
Personalizing individuals—that is, understanding and valuing
the uniqueness of diverse others while also accepting them as
members of the group
Leveraging the thinking of diverse groups for smarter ideation
and decision making that reduces the risk of being blindsided
Trait 1: Commitment
Highly inclusive leaders are committed to diversity and
inclusion because these objectives align with their personal
values and because they believe in the business case.
Trait 2: Courage
Highly inclusive leaders speak up and challenge the status quo,
and they are humble about their strengths and weaknesses.
Trait 3: Cognizance of bias
Highly inclusive leaders are mindful of personal and
organizational blind spots, and self-regulate to help ensure “fair
play.”

Trait 4: Curiosity
Highly inclusive leaders have an open mindset, a desire to
understand how others view and experience the world, and a
tolerance for ambiguity.
Trait 5: Culturally intelligent
Highly inclusive leaders are confident and effective in cross-
cultural interactions.
Trait 6: Collaborative
Highly inclusive leaders empower individuals as well as create
and leverage the thinking of diverse groups.
36
How do leaders build and maintain trust with team members?
Be fair, truthful and respectful to others.
Be aware of and sensitive to the stage of the teams
development.
Communicate so people are kept informed, but do not over
share with team members either too much or irrelevant
information.
Develop a code of practice or team rules, so everyone knows
where they stand. This helps them to make patterns of the
communication and behaviour predictable, which is particularly
important for virtual teams
Invest in relationships with staff to hear and understand, so that
communication is genuinely two-way. This requires some
humility and acknowledging you may no have all the answers.
‹#›
Reference L Kinicki. S. L and Williams.
37

Assessment 2 – Part 2 (Report)
Although you worked in a team for your presentation, your
personal experience and perspective on how the team functioned
to complete the project will be unique.
To consolidate your learning, each team member must submit
their own individual report. In this report, you will reflect on
what you learned about managing and working in diverse
groups.
‹#›
38
Next Lecture?Teams and TeamworkWeek 5Ethical
ManagementWeek 6 Leading in a Global ContextWeek
7Managing InformationWeek 8 Assessment 2 due
Next week
Managing Information

The Context of Managers Work
Teams and Teamwork
Ethical Management
‹#›
References
Hall, E. T. 1959. The Silent Language, Doubleday.
Hersey Blanchard 1969), Situational Leadership
Galford H, The Trusted Advisor.
Gardenswartz. L and Rowe A (2003) Diverse teams at work.
Society for Human Resource Management, Alexandria, Va
Goleman. D, R. Boyatziz and A McKee, (2001) Primal
Leadership: the hidden driver of great performance, Harvard
Business Review.p 49.
Gudykunst (1998) Applying anxietyuncertainty management
(AUM) Theory to intercultural adjustment trainingInternational
Journal of Intercultural Relations.Volume 22, Issue 2, 1 May
1998, Pages 227-250
Kinicki. S. L and Williams. P (2018) Management a practical
Introduction. McGaw-Hill Education (Australia) Pty. Ltd.
Liu, X., Magjuka, R. J., & Lee, S.-H. 2008. An examination of
the relationship among structure, trust, and conflict management
styles in virtual teams. Performance Management Quarterly, 21:

77–93.
Stahl, G. 2001. Using assessment centres as tools for global
leadership development: an exploratory study. In M.
Mendenhall, T.M. Kuhlmann and G. Stahl (eds), Developing
global business leaders: policies, processes, and innovations:
197–210. Westport, CN: Quorum
Yulk G. (2013), “Leadership in Organizations”, 8th edition,
Prentice hall
Zugengler, J and Miller, E.R., 2006. Cognitive and sociocultural
perspectives: Two parallel SLA worlds?. Tesol Quarterly, 40(1),
pp.35-58.
‹#›
40
Lecture 8: Managing in the Global Market
‹#›

What are some of the challenges associated with managing in a
global context?
What are some of the drivers in globalisation that will affect
managers today and in the future?
Why do you need to understand cultural differences in an
international marketplace and how is the market different in the
Asian Pacific context?
The context of managers work
Teams and Teamwork
Ethical Management
Managing Information in Asian Context
2
‹#›

What is Globalisation?
–The trend of the world economy towards becoming a more
interdependent system
–Time and distance have virtually collapsed as reflected in
these important developments: the rise of the global village and
e-commerce, and the rise of megamergers and internet-enabled
mini-firms
‹#›
3
Globalisation: The collapse of time and distance
Global village
The 'shrinking' of time and space as air travel and the electronic
media have made it much easier for people to communicate with
each other across the globe
Twenty-five years ago, mobile phones, pagers, fax and
voicemail links barely existed; by 2017, there were nearly 4.77
billion mobile subscriptions
Today, 51% of the world’s population are internet users
‹#›

Do students feel more connected globally? Do they envisage
themselves entering jobs on a local or national level? Do they
anticipate working on a global scale during their career?
4
E-commerce
The buying and selling of products and services through
computer networks
E-commerce in Australia and New Zealand has been estimated
at close to US$20 billion in 2013 and is projected to account for
7.2% of all retail sales by 2018
‹#›
How has technology changed the way we think about global
commerce? Do students feel that they could reach the world
with their products and services? What impact will this have in
the coming years as students evaluate their job opportunities
and earning potential? This is an extraordinary time to come of
age in business. The globe is literally the limit.
5
Global Economy
The increasing tendency of the economies of the world to
interact with one another as one market, instead of many
national markets
Positive Effects
Foreign firms bring expertise and links to international markets
when they invest in Australia and New Zealand

Negative Effects
Vast surplus funds from global investments flowed into the US
and were invested badly in subprime mortgages; outsourcing of
formerly well-paying jobs overseas
‹#›
There are both positive and negative effects to a more global
world. Though it is exciting to be interconnected, it can also
lead to outsourcing labour to other countries, particularly in
manufacturing.
Positive effects: The world is far more interconnected leading to
better and more affordable products, and better communication
among nations.
Negative effects: The movement, or outsourcing, of formerly
well-paying jobs overseas as companies seek cheaper labour
costs, particularly in manufacturing.
6
Question
Jelene sells her art through her own website and her store on
Etsy. She receives questions from many different countries.
Jelene is engaged in:
E-commerce
Global trading
Counter-trading

Embargo
‹#›
The correct answer is 'A', e-commerce. See slide 5.
Marketing
Lecture Script 6-7
Why learn about international management?
Multinational corporation
Business firm with operations in several countries
Multinational organisation
Non-profit organisation with operations in several countries
‹#›
Examples of multinational corporations include McGraw-Hill
Education, which is owned by Apollo Global Management. In
2015, the five largest multinationals were all in the US: Apple,
Exxon Mobil, Berkshire Hathaway, Google and Microsoft.
Some examples of multinational non-profit organisations
include the World Health Organization and the International
Red Cross.
8
Consider yourself in the following situations:

Dealing with foreign customers or partners
Dealing with foreign employees or suppliers
Working for a foreign-owned firm
Working outside your home country for a home-country or
foreign firm
Why learn about international management?
Working for a foreign firm. If you thought you might work for a
foreign firm, either at home or overseas, what should you be
doing now to prepare for it?
‹#›
Do you believe that this advice doesn’t apply to you? Think
again! In your lifetime there may be many opportunities for you
to interact on a global scale.
Your call: You may have to travel a lot, working for a
multinational company, even a small one, to stay connected
with colleagues, employees and suppliers. Would this concern
you? Would you expect time away from home to bring
additional financial rewards or would you see it as a ‘perk’?
9
The successful international manager
Ethnocentric managers
Believe that their native country, culture, language and
behaviour are superior to others
Related to parochialism, a narrow view in which people see
things solely through their own perspective
Parochialism
Narrow view in which people see things solely through their
own perspective

Are either of these the ‘right’ way to be?
What is the alternative?
‹#›
Ethnocentric managers tend to believe that they can export the
managers and practices of their home countries to anywhere in
the world and that they will be more capable and reliable. Often
the ethnocentric viewpoint is less attributable to prejudice than
it is to ignorance, since such managers obviously know more
about their home environment than the foreign environment.
Is ethnocentrism bad for business? It seems so. A survey of 918
companies with home offices in the US, Japan and Europe found
that ethnocentric policies were linked to such problems as
recruiting difficulties, high turnover rates and lawsuits over
personnel policies.
10
The successful international manager
Polycentric managers
Take the view that native managers in the foreign offices best
understand native personnel and practices, and so the home
office should grant them maximum autonomy
Geocentric managers
Accept that there are differences and similarities between home
and foreign personnel and practices, and that they should use
whatever techniques are most effective

‹#›
Polycentric managers can also run into pitfalls. In a large global
company, cohesive management is important for success. What
is the better way?
Geocentric managers tend to accept similarities and differences,
and use techniques that are most effective. This blending of
cultures and management techniques can lead to a very
successful global presence.
11
Question
Alvin accepts that differences and similarities exist between
home and foreign personnel and practices, and that the company
should use whatever techniques are most effective. Alvin can
be described as:
Ethnocentric
Polycentric
Geocentric
Expatriate
‹#›
The correct answer is 'C', geocentric.
Marketing
Lecture Script 6-12

Why companies expand internationally
Availability of supplies
New markets
Lower labour costs
Financial advantage
Avoidance of tariffs and import quotas
Gaining scale
Following the customer
‹#›
Why do companies expand internationally? Ask students to
identify why each of these reasons is important.
Availability of supplies—overseas, raw materials for your
products may be cheaper or more plentiful
New markets—you may find more demand and more customers
for your products overseas
Lower labour costs—for example, Australia and NZ often
transfer labour to South East Asia. Another example from the
US is maquiladoras (manufacturing plants allowed to operate in
Mexico with special privileges in return for employing Mexican
citizens)
Access to financial capital—finding overseas investors can
help grow your business
Avoidance of tariffs and import quotas—countries place tariffs
(fees) on imported goods or impose import quotas (limitations
on the numbers of products allowed in) to protecting their
domestic industries. To avoid these penalties, a company might
create a subsidiary to produce the product in the foreign
country. General Electric and Whirlpool, for example, have
foreign subsidiaries to produce appliances overseas.

Marketing
Lecture Script 6-13
How companies expand internationally
Global outsourcing
Using suppliers outside the company to provide goods and
services
Importing
Buying goods outside the country and reselling them
domestically
Exporting
Producing goods domestically and selling them outside the
country
Countertrading
Bartering goods for goods
‹#›
On the lower-risk and investment end of the scale, global
outsourcing, importing, exporting and countertrading are easier
entries into foreign markets. The companies are run
domestically, but may do some business with foreign countries.
There is generally no ownership abroad, just business dealings.
14
Top 10 exporting countries, 1999 and 2015RANK IN
1999RANK IN 20151. USUS2. GermanyChina3. JapanJapan4.
FranceGermany5. BritainFrance6. CanadaSouth Korea7.
ItalyNetherlands8. NetherlandsItaly9. ChinaRussia10.
BelgiumUnited Kingdom

—Introduction to ManagementWEEK TEN THE EXCEPTIONAL MANAGER.docx

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