Professional, Practical, Proven

Academy 2019/2020

Business Management

Management Environment and Integrative Managerial IssuesLecture 16

1) What the management environment is and why it is important?2) Factors that are reshaping and redefining management 3) The impact of globalisation on organisations4) Society’s expectation of business5) What the changing workforce may look like

Contents

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Management Environment and Integrative Managerial Issues

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• Factors, forces, situations and events outside the organisationthat affect its performance• Political/Legal• Economic• Sociocultural• Technological• Demographic

The Importance of the External Environment

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The Grey Market Born pre 1946, retire, bust considerable disposable income

Baby BoomersBorn between 1946 and 1964. Sheer number of people in this cohort meant they had influence

Gen XBorn between 165 and 1977. Baby bust generation

Gen Y (Millennials)Born between 1978 and 1994. Children of the baby boomers

Post MillennialsMany of their social interactions take place on the internet

The Role of Demographics

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The Impact of the External Environment on Management

The key issue to consider is the amount of environmental uncertainty.

• The degree of change in an organisation’s environment

• The degree of complexity in that environment

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Stakeholder PowerSources of Power

Within Organisation For External Stakeholders 

Hierarchical (formal)Influence (informal)Control strategic resourcesSpecialist knowledgeControl of human environmentInvolvement in strategy implementation

Control of strategic resourcesInvolvement in strategic implementationSpecialist knowledgeInternal links/informal influence

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Stakeholder Power

Indicators of Power

Within Organisation For External Stakeholders

StatusClaim on resourcesRepresentationSymbols

StatusResource dependenceNegotiating arrangementsSymbols

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• Shareholders = Own shares in the company. Vote on appointments to the board of directors

• Stakeholders = broader group of those who have an interest in the success /failure of the business.

• Stakeholder relationship management• Can lead to greater predictability, innovation, trust,

flexibility• The “right thing” to do

Shareholders as Stakeholders

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Factors Reshaping and Redefining Management

• The importance of customers

• The importance of innovation to managers

• The importance of social media to managers

• The importance of Sustainability to the Manager’s job

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• The Importance of Customers

• Repeat business, lifetime customer value• Advocates, regular customers, occasional customers, once-

off purchasers

Factors Reshaping and Redefining Management

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• The Importance of Innovation to Managers

• Cannot stand still• Managers must be innovative and foster innovation• Creates long term advantage

Factors Reshaping and Redefining Management

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• The Importance of Social Media to Managers

• Social media platforms are used for work purposes• Benefits

• Learn about your audience, target effectively• Expand your audience• Instant feedback• Increase website traffic• Brand awareness• Less expensive to generate leads

Factors Reshaping and Redefining Management

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• The Importance of Sustainability to the Manager’s Job

• Ability to achieve business goals and increase long-term shareholder value responding to a wide range of environmental and social challenges

Factors Reshaping and Redefining Management

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• The Globalisation Process• Global Sourcing - Outsourcing, purchasing wherever

cheapest• Exporting - produce domestically and sell abroad• Licensing or franchising – rights to branding, technology,

product specifications• Global strategic alliances, joint ventures, foreign subsidiary

Impact of Globalisation on Organisation

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How Globalisation Affects Business

• Competition• more customer choice, more demanding customers

• Exchange of Technology• Use technology to exploit new business opportunities

• Knowledge/Information Transfer• Easily done from one country to another

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• Multidomestic corporation• Decentralises management and other decisions to the local

country where it is doing business• Transnational / borderless organisation

• Use an arrangement that eliminates artificial geographic barriers

• Global corporation• Centralises management and other decisions in the home

country

Types of Global Organisations

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Hofstede’s Dimensions of National Culture

The extent to which unequal distribution of power is accepted

HIGH PD Cultures– (Latin, Near Eastern, less developed Asian)Accept greater centralisation, a top-down chain of command and control. Subordinates have little expectation of influencingdecisions.

LOW PD Cultures– (Germanic, Anglo, Nordic)Expect less centralisation and flatter organisation structures. Subordinates expect involvement and participation in decision –making

Power Distance

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The extent to which security, order and control are preferred to ambiguity, uncertainty and change

HIGH UA Cultures (Latin, near Eastern, Germanic and Japan)Respect control, certainty and ritual. They value task structure, written rules and regulations, specialist and standardisation. Strong need for consensus, deviance and dissent are not tolerated. The work ethic is strong.

LOW UA Cultures (Anglo and Nordic countries)Respect flexibility and creativity. They have less task structure and written rules; more generalists and greater variability. More tolerance of risk, dissent, conflict and deviation from norms.

Uncertainty Avoidance

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The extent to which people prefer to live in individualist (I) or collectivist (We) ways

HIGH INDIVIDUALISM Cultures (Anglo, more developed Latin, and Nordic Countries)

Emphasis on autonomy and individual choice and responsibilityThey prize individual initiative. The organisation is impersonal and tends to defend business interests. Task achievement is more important than relationships.

LOW INDIVIDUALISM Cultures (less developed Latin, near Eastern and less developed Asian countries)

Collectivist, emphasise interdependence, reciprocal obligatioinand social acceptability. The organisation is seen as a family and tends to defend employee interests

Individualism

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The extent to which social gender roles are distinct

HIGH MASCULINITY Cultures – (Japan, Germanic and Anglo) clearly differentiate gender roles. Masculine values of assertiveness, competition, decisiveness and material success are dominant. Feminine values of modesty, tenderness, consensus etcare less highly regarded and confined to women.

LOW MASCULINITY Cultures – (Nordic countries) minimisegender roles. Feminine values are dominant and both men and women are allowed to behave accordingly.

Masculinity

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• Power Distance – the extent to which less powerful members of organisations within a country expect and accept that power is distributed unequally. Ireland is a society that believes inequalities should be minimised. Managers and employees expect to be consulted and informed. Communication is informal, direct and participative.

• Individualism - the degree to which people’s self image is defined in terms of “I” or “We”. Ireland is an individualist culture, where employees are expected to be self reliant and show initiative

Ireland and Globalisation

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• Masculinity – Ireland is a Masculine society indicates a society driven by competition, achievement and success with success defined by the winner/best in field. The Irish are proud of their success and achievements in life. Conflicts are resolved at an individual level and the goal is to win. Feminine means dominant values are caring for others and quality of life.

• Uncertainty Avoidance – Ireland has a low score on uncertainty avoidance, Irish businesses embrace creativity and innovation

Ireland and Globalisation

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Ireland and Globalisation

Long-term Orientation – describes how every society has to maintain some links with its own past, while dealing with the challenges of the present and future. Ireland score low here meaning there is a preference to maintain time honoured traditions and norms while viewing social change with suspicion. People have a relatively small propensity to save for the future and a focus on achieving quick results

Indulgence – the extent to which people try to control their desires and impulses, based on the way they were raised. Relatively weak control is called “indulgence”, relatively strong control is called “restraint”

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• Different Stances on Social Responsibility• Social Responsibility – a business’s intention beyond its

legal obligations to do the right things in a way that is good for society.

• Social Obligation - the firm engages in social actions because of its obligations to meet certain economic and legal responsibilities.

• Social Responsiveness – the firm engages in social actions in response to some popular social need.

Society’s Expectations of Business

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The Importance of Corporate Social Responsibility

• Modern managers are regularly confronted with decisions that have a dimension of social responsibility.

• CSR is a wide ranging issue and can include, philanthropy, pricing, employee relations, resource conservation, product quality, and doing business in countries with oppressive governments.

• Literature suggest that there is a positive relationship between social involvement and economic performance.

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The Role of Sustainability

Managing in a sustainable way necessitates the widening of corporate social responsibility because a wide range of environmental and societal challenges must be considered when developing and deciding corporate strategy.

• Behaving in this manner is a way for organisations to demonstrate to customers that they are committed to being responsible.

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CSR Stances

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The Changing Workforce

Organisational diversity is becoming more common. Workforce diversity refers to how employees in an organisation are different from and similar to each other.

• Age• Gender

• Race and Ethnicity• Disabilities/abilities

• Religion• LGBT• Other

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• Increased adaptability

• Broader service range

• Variety of viewpoint

• More effective implementation of strategy and execution of tasks

Benefits of Workplace Diversity

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• Communication

• Resistance to change

• Implementation of ‘diversity in the workplace’ policies

• The culture of diversity must permeate every department and function of the organisation

Challenges of Workplace Diversity

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• Ward of resistance with inclusion

• Foster an attitude of openness in your organisation

• Promote diversity in leadership positions

• Utilise diversity training

• Launch a customisable employee satisfaction survey

Workplace Diversity Solutions

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• Work/Life Balance Programs• Longer hours• Fewer families rely on a single breadwinner• Technology allows employees to work from home, car,

anywhere• The world never sleeps

• Generational Differences • Office attire• Technology• Management Style

Adapting to the Changing Workforce

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