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Integrative Managerial Issues Managing in a Global Environment Social Responsibility and Managerial Ethics

Integrative managerial issues

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Page 1: Integrative managerial issues

Integrative Managerial Issues

•Managing in a Global Environment•Social Responsibility and Managerial Ethics

Page 2: Integrative managerial issues

Managing a Global EnvironmentThe pink Eraser Man. A cartoon

mascot designed to convey a simple message to employees: “Erase” waste. However, as managers at the W.R. Grace & Company soon discovered, its gimmick to promote being efficient (known as “lean” manufacturing ) throughout its global operations wasn’t as harmless as they had thought it would be.

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When the erase man was introduced to the company’s Asian staff at a focus group meeting in China, the attendees were perplexed and a little annoyed. The company’s vice president of human resources recalls they said, “Do you really want this program to be invisible?” because that’s what the concept of “erase” means in China… Invisible. The other problem was the color of the Eraser Man: Pink

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Although many employee wouldn’t see anything odd about a pink eraser, it’s just “not an acceptable color in China; it’s feminine. No self-respecting man would want to be associated with the program that’s marked by the color pink”. This cross-cultural blunder was easily corrected. The Eraser Man is now tan, and the employees in china are encouraged to simplify or reduce rather than erase. But how could such problems be avoided in the future?

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What would you do?

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What is your Global Perspective?

Parochialism-viewing the world solely through one’s own eyes and perspectives and not recognizing that others have different ways of living and working. This lead to an inability to recognize differences between people.

Ethnocentric-parochial belief that the best work approaches and practices are those of the home country.

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What is your Global Perspective?

Polycentric-views that the managers in the host country know the best work approaches and practices for running their business.

Geocentric-a world-oriented view that focuses on using the best approaches and people from around the globe.

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Understanding the Global Environment

What do you think are the differences between trading in the 21st century vs the years before?

What are the two forces that is shaping today’s global trade?

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Regional Trading Alliances

Mention some of the regional alliances present today.

What do you think is the advantage of being a member of these regional alliances?

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The European Union (EU)Economic and political partnership

of 27 democratic European countries.

To reassert economic position vs USA and Japan.

Removed border controls, travel barriers, has a common legal framework (Treaty of Lisbon) to trade.

Euro

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North American Free Trade Agreement (NAFTA)Trade union between Canada,

Mexico, and USA.Has the biggest GDP combined vs

other alliancesLatin American nations are

following through by establishing their own alliances (i.e. MERCOSUR)

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Association of Southeast Asian Nations (ASEAN)Is the alliance of the 10 south east

Asian nations formed by the Philippines

Fast growing region that will soon become an important regional economic and political alliance that may soon rival EU and NAFTA

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Other Trade AlliancesAfrican UnionSouth Asian Association for Regional

Cooperation

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The World Trade OrganizationThe only global trade organization

that deals with trade rules among nations.

Makes sure trade between nations is effective and efficient and with accordance to a system of trade rules.

Works hand in hand with regional alliances and other global organization like International Monetary Fund

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Types of International OrganizationMultinational Corporations- is the

general term used to describe all corporations with operations outside their home country.

Multidomestic corporations-an international company that decentralizes management and other decisions to the local country

Global company-an international company that centralized management and other decisions in the home country

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Types of International OrganizationTransnational or Borderless

organizations- a type of international organization in which artificial geographic barriers are eliminated.

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How Organizations Go InternationalGlobal sourcing-purchasing

materials or labor from around the world based on lowest cost to be more competitive.

Exporting-manufacturing goods domestically and selling it abroad

Importing-creating products abroad and selling it in their home country

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How Organizations Go InternationalLicensing-an agreement in which organization

gives another organization the right to make or sell products, using its technology or product specifications (products)

Franchising-an agreement in which an organization gives another organization the right to use its name and operating methods (services)

Strategic alliance-partnership between an organization and a foreign company partner in which both share resources and knowledge in developing new products or building production facilities

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How Organizations Go InternationalJoint venture- a specific type of

strategic alliance in which the partners agree to form a separate, independent organization for a some business purposes.

Foreign subsidiary- a direct investment in a foreign country that involves setting up a separate and independent facility or office.

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Managing in a Global EnvironmentWhat if you are sent to a branch of

your company abroad, how are you going to prepare?

What will be your expectations?

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The Political/Legal EnvironmentHow can politics and legalities

affect businesses and managers?

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The Economic EnvironmentFree-market economyPlanned economy

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The Cultural EnvironmentAs a manager, how would you

compare the culture of your hometown and the culture of the place where you currently work?

How did you adapt to the culture?Is it important to consider the

culture of your subordinates before making a decision? Why?

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Hofstede’s Framework for Assessing Cultures

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The GLOBE Framework for Assessing CulturesHumane orientation-the degree to which a

society encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others.

Assertiveness-a society encourages people to be tough, confrontational, assertive, and competitive rather than modest and tender

Future orientation-the extent to which a society encourages and rewards future oriented behaviors such as planning, investing in the future, and delaying gratification.

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The GLOBE Framework for Assessing CulturesInstitutional collectivism-degree to which

individuals are encouraged by the societal institutions to be integrated into groups in organizations and society.

Gender differentiation-society maximizes gender role differences, as measured by the status of responsibilities women have.

In-group- society takes pride of being a member of small groups

Performance orientation- rewards group members for performance improvement and excellence

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Global Management in Today’s WorldWhat do you think are the

advantages of Globalization?What do you see as challenges of

Globalization?What do you mean by OPENESS

and why it is important?How important is it to be

significantly sensitive and understanding in the global environment?

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Social Responsibility and Managerial EthicsMost people would expect REI

(Recreational Equipment , Inc.), a retailer of outdoor gear and clothing, to care passionately about the natural environment. The company has long been committed to working with communities in the United States to keep parks and trails clean. Sally Jewell, president and CEO of REI , says, “what we are doing is important to the long-term health of our business.” In 2007, the company published its first stewardship

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report , which “tells its stakeholders what it’s been doing to address environmental and social issues and the steps it’s taking to do better.” And the company has set some challenging environmental sustainability goals for itself. Living up to those commitments is hard. It means that the employees may have to change some of their work habits, and change isn’t easy in any organization. It also entails coordinating sustainability efforts across numerous business units of a large company. Instead of being discouraged, however, REI is focusing on things it cand to make a difference. Put yourself in Sally’s position. How does she balance being socially responsible and being focused on profits?

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What is Social Responsibility?

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Obligations, Responsiveness, ResponsibilitySocial obligation-a firm’s engaging in social

actions because of its obligation to meet certain economic and legal responsibilities

Classic view- management’s only social responsibility is to maximize profit

Socioeconomic view-managements social responsibility goes beyond profits and includes protecting and improving society's welfare

Social responsiveness- a firm’s engaging in socail actions in response to some popular social need

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Social ResponsibilityA business’s intention, beyond its

legal and economic obligations to the right things and act in ways that are good for society.

So, how should we view an organizations social actions?

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Should organizations be socially involved?For:

◦Public expectations, long-run profits, ethical obligations, public image, better environment, discouragement of further government regulations, balance of responsibility vs power, stockholder interests, possession of resources, superiority of prevention over cures.

Against:Violation of profit maximization, dilution

of purpose, costs, too much power, lack of skills, lack of accountability

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Green ManagementA form of management in which

managers consider the impact of their organization on the natural environment

Can you give examples of Green Management practices?

Why do you think it is becoming a trend today?

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How Organizations Go GreenLegal ApproachMarket ApproachStakeholder ApproachActivist Approach

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Evaluating Green Management ActionsGlobal Reporting Initiative (GRI)-

reports green actions of organizations

International Organization for Standards (ISO)

Global 100 – lists most sustainable corporations in the world

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Managers and Ethical BehaviorWhat is ethics for you?Can you cite some issues or

controversies you are aware of and what can you say about the behavior of the personalities involved?

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Factors that Determine Ethical and UnEthical BehaviorStage of Moral Development-

◦Preconventional- right or worng is influenced by outside stimuli such reward, punishment, exchange of favor.

◦Conventional- moral level that rely on maintaining expected standards and living up to the expectations

◦Principled- are values that is not affected by outside factors or groups/society they belong

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Factors that Determine Ethical and UnEthical BehaviorIndividual Characteristics

◦Ego strength- measures the strength of a person convictions. The higher, the better a person would act ethically.

◦Locus of Control- internal (they control their own destinies, they take responsibilities) external (what happens is either by luck or chance, they don’t take responsibility)

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Factors that Determine Ethical and UnEthical BehaviorStructural Variables- the design of

the organizations structure influences the ethical behavior of employees.

Organizations culture◦Value-based management a form of

management in which an organizations values guide employees n the way they do their jobs

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Factors that Determine Ethical and UnEthical BehaviorIssue Intensity

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Ethics in an International ContextAre ethical standards universal?Global Compact-document outlined

by UN; principles for doing business globally in areas of human rights, labor, and the environment.

Anti-Bribery ConventionOrganization for Economic Co-

operation and Development

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Encouraging Ethical BehaviorAs a manager, what can you do to

encourage ethical behavior?How would you select a an

employee? What if you selected the wrong person?

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Code of Ethics and Decision RulesA formal statement of an

organization’s primary values and the ethical rules it expects its employees to follow.

Be a dependable organizational citizen, do no do anything unlawful or improper that will harm the organization, be good tocustomers

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Code of Ethics and Decision Rules

Suggestions to managers;◦Should model the appropriate behavior and

reward those who act ethically◦All managers should continually reaffirm the

importance of the ethics code and the consistently discipline those who break it

◦The organization’s stakeholders should be considered as an ethics code is developed and improved

◦Managers should communicate and reinforce the ethics code regularly

◦Managers should use the 12 questions approach

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12 Questions Approach1. Have you defined the problem accurately?2. How would you define the problem if you

stood on the other side of the fence?3. How did this situation occur in the first

place?4. To whom and to what do you give your

loyalty as a person and as a member of the corporation

5. What is your intention in making this decision

6. How does this intention compare with the probable results?

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12 Questions Approach7. Whom could your decision or action injure?8. Can you discuss the problem with the affected

parties before you make the decision?9. Are you confident that your position will be as

valid over a long period of time as it seems now?10. Could you disclose without qualm your decision

or action to your boss, your chief executive officer, the board of directors, your family, society as a whole?

11. What is the symbolic potential of your action if understood? If misunderstood/

12. Under what conditions would you allow exceptions to your stand?

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Top Management’s LeadershipWhy commitment in following

ethical standards a must for top management?

How would you implement reward and punishment?

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Ethics TrainingAs manager, what can you do to

enhance the ethics standards of your employees?

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Job Goals and Performance AppraisalAs manager, how would you

implement the organizational goals?

How would you implement performance appraisal and monitor the employees performance?

Would you punish more or reward more?

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Managing Ethical Lapses and Social IrresponsibilityWhat if your future employees so

readily accepted unethical behaviors like cheating?

Two approaches;◦Ethical Leadership◦Protection of Employees who raise

ethical issues (whistle blowers)

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Encouraging Social EntrepreneurshipAn individual or organization who

seeks out opportunities to improve society by using practical, innovative, and sustainable approaches.

Can you cite some examples?

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Business Promoting Positive Social ChangeCorporate Philanthropy

Employee Volunteering Efforts

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ENDSource

◦Chapter 4-5, Management by Stephen Robbins and Mary Coulter, 2010