1

Objectives1. Highlight major changes shaping the twenty-first-

century workplace.

2. Understand demographics of the new work force.

3. Explain “managing diversity” and why it is important today.

4. Discuss effects on management from the political-legal environment

5. Discuss effects on management from business cycles and globalization

2

Major Changes in the Workplace

• Virtual Organizations

• Just-in-Time Workforce

• Knowledge Workers

• e-Coaching and e-Monitoring

• Increased Diversity

• Aging Workforce

• Dynamic Workforce

3

Virtual teams

• More communication-intensive– but lose contextual cues/voice

• Asynchronous (24/7)

• Dispersed

• Implications for management: characteristics of virtual team members - self discipline, social needs ...

4

JIT Workforce

• Contingent, temporary, freelance workers

• Essentially outsourcing

• Creates a hiring pool - for “permanent” positions

• Trust & loyalty an issue?

• Implications: which functions should managers outsource - or not outsource?

5

The Social Environment• “The organization is an arena where interests are mobilized”

• Dimensions of the social environment– Demographics

• Changes in the statistical profiles of population characteristics.

– The new social contract• Changes in the employer-employee relationship.

– Inequalities• Persistent barriers

– Managing diversity• Creating organization cultures that enable all employees to realize their

potential.

6

Demographics of the New Workforce

• Needed Remedial Education– The shrinking U.S. workforce is increasingly

deficient in reading, writing, science, and basic math skills.

7Source: International Adult Literacy Survey

Skill Level of Three Workforce Categories

35% 52% 14%

34% 41% 25%

38% 16% 46%

0% 25% 50% 75% 100%

Percent of U.S.College Graduates

Percent of U.S.Workers

Percent of U.S. H.S.Graduates

Adequate Skills Inadequate Skills Excellent Skills

8

Demographics

• The workforce will have more Hispanics and older persons in the future.

• Labor force growth rate is declining

9

Asian American

4%

White76%

Black11%

Hispanic9%

Source: U.S. Bureau of the Census, HRI

White66%

Black15%

Hispanic14%

Asian American

5%

Baby Boomb.1946-64

Baby Bustb. 1965-83

Percent of Baby-Boom and Baby-Bust Generations by Race/Ethnicity

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Annual Growth Rate of U.S. Labor Force

-0.5

0

0.5

1

1.5

2

2.5

3

1955 1965 1975 1985 1995 2005 2015 2025 2035

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Demographics of the New Workforce

• Myths About Older Workers (Dispelled)– Are not less productive.– Do not incur higher benefits costs.– Do not have higher absenteeism.– Do not have more accidents at work.– Are not less willing to learn.– Are not inflexible about the hours they are

willing to work.

12

A New Social Contract Between Employer and Employee

• New Social Contract– Employer-employee relationship will be

shorter-term, market-based. • Employees are expected to manage their own

careers to increase their long-term value.

• Employers are expected to provide the means necessary for continual workforce development .

13

Nagging Inequalities in the Workplace

• Under the Glass Ceiling– Women continue to experience a significant

gender-wage gap and strong barriers to advancement.

– Women are demanding more equitable compensation and workplace opportunities.

14Source: Catalyst’s Census of WomenCorporate Officers and Top Performers; HRI

Women in Top Management

46% of the U.S. Labor Force

48% of Managerial/ProfessionalSpecialty Positions

10% of Corporate Officers

9.5% of Board Directors

2.4% of Highest Titles

1.9% of Top Earners

Two Fortune 500 CEO

15Source: Federal Glass Ceiling Initiative; HRI

While minorities make up almost 22 percent of the U.S. workforce...

... they represent only 2 percent at Fortune 2000 firms.

White78%

White98%

Minorities22% Minorities

2%

Minorities in Top Management

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Nagging Inequalities in the Workplace (cont’d)

• Part-Timer Promises and Problems– Contingent workers will comprise a increasing percentage of

the workforce.– The advantages of lower wage and benefits costs and the

flexibility of a contingent workforce are offset by their negative work attitudes and increased likelihood of quitting.

• Continuing Pressure for Equal Opportunity– Women, minorities, and the physically challenged are all

expected to press harder for more employment opportunities

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Managing Diversity• Managing Diversity

– The process of creating an organizational culture that provides all employees with opportunities to realize their potential

– Requires testing of personal biases, learning

• More than EEO– The moral necessity to go beyond EEO and affirmative

action – Multiple perspectives improve information and decision

making - creating economic value

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The Political-Legal Environment

• Specific Political Strategies– Campaign financing– Lobbying– Coalition building– Indirect lobbying

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Increased Personal Legal Accountability

• Increases in Demands for Accountability– “Cooking the books,” price fixing, and bid rigging are

serious white-collar crimes likely to draw stiff penalties and a jail sentence. E.g. Sarbanes-Oxley act 2002

• Political and Legal Implications for Management– Increased use of legal audits

• A review of all operations to pinpoint possible legal liabilities or problems.

– Use of alternative dispute resolution (ADR)• Settling disputes with less costly methods, including arbitration

and mediation.

20

The Economic Environment

• The Job Outlook in Today’s Service Economy, Where Education Counts– Service sector job growth in high paying

occupations that require at least a bachelor’s degree is twice as fast as that of all other occupations.

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Some Industries in the Service Sector

• Banking, stockbrokerage

• Lodging

• IT

• Insurance

• News and entertainment

• Transportation (freight and passenger)

• Health care

• Education

• Wholesaling and retailing

• Law

• Education

• Architecture

• Consulting

22

The Economic Environment

• Coping with Business Cycles– Business cycles

• The up and down movement of an economy’s ability to generate wealth.

• Business cycles are converging worldwide (global interdependence).

23

The Business Cycle

Trough

Growthtrend

Peak

RE

AL

GD

P (

units

per

tim

e pe

riod)

TIME

Peak

Peak

Trough

24

The Business Cycle inU.S. History

1930 1940 1950 1960 1970 1980 1990YEAR

2000

Annualgrowth

GR

OW

TH

RA

TE

(pe

rcen

t per

yea

r)

Long-term averagegrowth (3%)

Recession

Zero growth

0

35

10

15

20

-10

-5

25

The Economic Environment

• Cycle-sensitive decisions– Timing decisions about appropriate responses

to changes in the business cycle is necessary to• reduce the chances that a firm’s assets and resources

will be underutilized or wasted in economic downturns.

• take advantage of opportunities that will arise during periods of rapid expansion of the economy.

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The Challenge of a Global Economy

• A Single Global Marketplace– Global trade is causing a shift to a single economy

(e.g., WTO, EU, NAFTA)– The commercial world is no longer East-West, North-

South.

• Globalization Is Personal– Working for a foreign-owned company is a growing

trend (brand ownership, FDI).– Now a world standard for competitive quality and costs

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The Technological Environment

• Technological innovation– is concerned with tools and ideas that provide

practical solutions – generates “Creative Destruction” (Schumpeter)– creates new products and businesses

• e.g., e-Business models, disintermediation, biotech

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The Technological Environment (cont’d)

• The Innovation Process– Concept– Product innovation– Process innovation

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• Innovation Lag– The time it takes for a new product to be translated into

satisfied demand.

• Shortening Innovation Lag– Goal setting: creating a sense of urgency and purpose.– Empowerment: pushing decision-making authority

down to the level of the decision.– Concurrent engineering: using a team approach to

product design involving specialists from all functional areas including research, production, and marketing.

The Technological Environment (cont’d)

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Promoting Innovation Through Intrapreneurship

• Intrapreneur– An employee who personally shepherds an

innovative idea through a large organization.

• Fostering Intrapreneurship– Focus on collaboration, innovation and risk taking

– Tolerate/learn from mistakes

– Requires managerial approaches to creativity individual and group dynamics, organization culture (more on this later!),