Test bank for principles of management international edition 12th edition by cassidy

CHAPTER 2 Management’s Changing Environment: Globalization and Technology CHAPTER OBJECTIVES • Summarize the demographics of the new American workforce.. Chapter 2: Management’s Chang

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CHAPTER 2

Management’s Changing Environment:

Globalization and Technology

CHAPTER OBJECTIVES

• Summarize the demographics of the new American workforce

• Explain why America’s education and workplace readiness situation is a crisis

• Define the term managing diversity, and explain why it is particularly important today

• Discuss how the changing political-legal environment is affecting the practice of management

• Discuss why business cycles and the global economy are vital economic considerations for modern

managers

• Describe the three-step innovation process, and define the term intrapreneur

OPENING CASE

The Changing Workplace: Looking Forward to the 2020 Workplace

Employees in the 2020 workplace will use social media to communicate, connect and collaborate with one another around the world To be successful in this virtual work environment employees will need to develop a new mindset to thrive that incorporates the following abilities:

Present and future managers need to be aware of how things are changing in the world around them

The general environment of management includes social, political-legal, economic, and technological dimensions Changes in each of these areas present managers with unique opportunities and challenges Forward thinking managers who see the big picture and can handle change will have a competitive advantage This chapter is designed to help students see the big picture and be better prepared to

management constant change

I THE SOCIAL ENVIRONMENT

A Demographics of the New Workforce

• Demographics are statistical profiles of population characteristics

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Chapter 2: Management’s Changing Environment: Globalization and Technology 21

• Figure 2.1 shows selected demographic shifts reshaping the U.S workforce from 2008-2018

• The U.S workforce is getting larger, increasingly female, more racially and ethnically diverse, and older

B America’s Education and Workplace Skills Crisis

• “There’s a mismatch between what people can do and what the economy needs them to do.”

• American kids are not receiving the world-class education needed to compete in the global labor market

• Data: 1/3 of 4th graders are proficient or better in reading, only 69% of high school students earn a diploma, we have a STEM crisis, the U.S ranks 12th with 40.4% of adults age25-34 with an associate degree or higher – Canada is #1 with 55.8%

• Needed: On-the-Job Remedial Education in basic reading, writing, and math; English language instruction, general technical skills training and new hire readiness training

C Myths About Older Workers

• The U.S workforce is getting older, both demographically and because people are deciding either not to retire or to retire later

• Older Americans tend to have a negative image in America’s youth-oriented culture

• There are five stubborn myths about older workers, all of which have been proved inaccurate by research:

A Myth: Older workers are less productive than the average worker

B Myth: The costs of employee benefits outweigh any possible gain from hiring older workers

C Myth: Older workers are prone to frequent absences because of age-related infirmities and above-average rates of sickness

D Myth: Older workers have an unacceptably high rate of accidents at work

E Myth: Older workers are unwilling to learn new jobs and inflexible about the hours they will work

• Enlightened employers view older workers as an underutilized and valuable resource

• Companies need to take proactive training steps to be all employees are treated fairly

• Older workers need to do their part to become more tech savvy and comfortable working with younger teammates

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22 Chapter 2: Management’s Changing Environment: Globalization and Technology

Annotation 3a The Inequality Dilemma

Questions: Where do you stand on the debate over “You deserve only what you earn from working”

versus “Everyone is entitled to a fair share of the wealth?” This is a personal opinion question that is quite likely to spark lively class discussion Encourage students to consider various perspectives including how a person who works hard for a company for many years and ends up without a job because the company goes out of business With unemployment rates averaging over 9% this person

is quite likely to have a tough time finding another job Should they receive unemployment benefits and essentially get paid for staying home? Or should they live off what they’ve saved and suffer the consequences (poverty, homelessness) if they run out of money?

What are the day-to-day management implications of growing income and wealth inequality in the

U.S.? The wider the wage gap gets the harder it becomes for management Employees have become frustrated with pay cuts, furlough days, and reductions in staff that leave the remaining workers with more to do in less time for less money Combine this reality with the extraordinary rise in executive compensation and you have a recipe for distrust and poor morale If not addressed, these negative factors can become toxic and truly poison a work environment leading to a costly decline in efficiency and effectiveness

A Nagging Inequalities in the Workplace

A Under the Glass Ceiling

• Fifty-one percent of managers and professionals in the United States are now women

• On average, professional women earn 77 cents compared to one male dollar

• Women still don’t have access to the jobs at the top of the managerial ladder due to

the glass ceiling, a term popularized in the 1980s to describe a barrier so subtle that

it is transparent, yet so strong that it prevents women and minorities from moving up

in the management hierarchy

• In 2010, just 3 percent of the Fortune 500 companies were headed by women

However, this is not unique to the U.S in Canada only 4 percent of their 500 largest companies have female CEOs and of the 100 biggest companies on the London Stock Exchange only 4 are lead by female CEOs

• One result of this is that many of the sharpest female executives are leaving the corporate ranks to start their own businesses, siphoning off this talent from larger corporations

B Continuing Pressure for Equal Opportunity

• Racial inequality in the workplace is underscored by the fact that the unemployment rate for African Americans is generally twice as high as that for whites during both good and bad economic times

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• Currently, women, African Americans, Hispanics, Native Americans, the physically challenged, and other minorities are overrepresented both in low-level, low-paying jobs and in unemployment lines

• EEO and affirmative action are discussed in Chapter 6

C Part-Timer Promises and Problems

• Contingent workers are a category that includes a diverse array of part-timers,

temporary workers, one-call employees, and independent contractors Also referred

to as “just-in-time” or “flexible” workers, these people do not have a long-term implicit contract with an employer

• This group is appealing to employers because they are less expensive (being paid lower salaries and often enjoying no benefits) and because they can be let go in tough times without the repercussions of layoffs

• The downside is that members of this group may have lower levels of job involvement

• There is concern that growth in this area may lead to a permanent underclass of employees characterized by lower pay and lack of benefits

D Managing Diversity The United States is becoming ever more racially and ethnically diverse

• Population figures from 2008 show that 12.5 percent were born outside the U.S

• America is gradually becoming a country of minorities By 2050, whites are projected to represent 53 percent of the population, blacks 13.2 percent, Asians 8.9 percent, and Hispanics 24.3 percent

• With a population growth rate seven times greater than that of any other group, Hispanics/Latinos passed African Americans in 2003 to become the country’s largest minority

• An estimated 12 million undocumented people are living in the U.S

illegally, with half from Mexico

VALUING DIVERSITY

Another Crack in the Glass Ceiling

Question: From both practical business and ethical standpoints, why is it important to

get more women working in computer science? The technology field is one of the fastest growing job markets in the U.S and around the world We need women in computer science to be sure U.S companies have enough workers prepared in technology fields to remain competitive in the global economy There is also concern that the existing wage gap will become even larger than it is now Finally, as you will learn in subsequent chapters, a diverse team is usually far more efficient, effective, creative and innovative

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• Progressive organizations are taking steps to better accommodate and more fully utilize America’s more diverse workforce

• Managing diversity is the process of creating an organizational culture that

enables all employees, including women and minorities, to realize their full

potential

E More than EEO

• Managing diversity builds on equal employment opportunity (EEO) and affirmative action programs (discussed in Chapter 6)

• Comprehensive diversity programs are needed to create more flexible organizations where everyone has a fair chance to succeed

• Diversity programs are both ethical and practical—a nation cannot waste any of its human potential and remain globally competitive

F Promising Beginnings A number of diversity programs are in use today, including:

• Teaching English as a second language

• Creating mentor programs

• Providing immigration assistance

• Fostering the development of support groups for minorities

• Training minorities for managerial positions

• Training managers to value and skillfully manage diversity

• Encouraging employees to contribute to and attend cultural celebrations and events

in the community

• Creating, publicizing and enforcing discrimination & harassment policies

The scope of managing diversity is limited only by management’s depth of commitment and imagination Ask your students what extra steps they think a company, their executives and employees can take to broaden their knowledge and embrace diversity in the workplace

II THE POLITICAL-LEGAL ENVIRONMENT

Politics is the art (or science) of public influence and control The political system tries to balance

competing interests in a generally acceptable manner Two key pressure points for managers in this area are the politicization of management and increased personal legal accountability

A The Politicization of Management Today’s managers often find themselves embroiled in issues with clearly political overtones

• Issues management (IM) is defined as the ongoing organizational process of

identifying, evaluating, and responding to relevant and important social and political issues

o IM serves as an early warning system for potential environmental issues It also serves as a firm’s coordinating and integrating force

o IM is more important than ever with immediate access to social media malicious news can spread fast

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o IM’s main contribution to management is its emphasis on systematic preparedness for social and political action

• General Political Responses

The three general political responses for management are plotted on a continuum

in Figure 2.2

o The middle of the continuum is managers who are politically inactive, or neutral They simply watch and wait

o Managers on the extreme left of the continuum actively defend the status quo

o Managers on the right end try to improve performance and avoid attacks by identifying and responding constructively to emerging political-legal issues

o In recent years, more managers are becoming proactive about political issues

• Specific Political Strategies There are four major strategies that managers can employ:

o Campaign financing—unions, companies and political action committees (PACs) contribute to a candidate’s campaign or party for political influence

o Lobbying

o Coalition building

o Indirect lobbying—including grassroots lobbying and advocacy advertising,

the controversial practice of promoting a point of view along with a product or service

B Increased Personal Legal Accountability

• Managers who make illegal decisions stand a good chance of being held personally accountable in a court of law

• SarbOx (Sarbanes-Oxley Act) implemented in 2002 to increase accountability and impose stiffer penalties, including felony charges and prison time for securities fraud, to deter fraud

• Managers are also being held personally responsible for the illegal actions of their

companies

C Political-Legal Implications for Management Managers will be forced to become more politically astute, whether they like it or not On the legal side, managers are working to curb the skyrocketing costs of litigation

• In a survey of large-company CEOs, 24 percent said litigation costs were their primary economic concern

• One approach to address this problem is a legal audit, which is a review of all

aspects of a firm’s operations to pinpoint possible liabilities and other legal problems

• Alternative dispute resolution, which involves allowing a neutral third party to

review the dispute and resolve the problem without going to court, is also helping to cut courtroom expenses

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Annotation 3b Back to the Opening Case

Questions: Do you have the 2020 mind-set described in the opening case? This is a personal opinion question that will require some self reflection Consider asking students to review each element listed and provide an example that demonstrates their 2020 abilities

What are your main strengths and areas needing improvement to work effectively in the 2020

workplace? Continue with the results from the previous question to prepare an action plan for improving\learning skills and gaining knowledge necessary to be successful For students who have difficulty identifying their strengths recommend they read StrengthsFinder 2.0 or StrengthsQuest and complete the survey

III THE ECONOMIC ENVIRONMENT

There is a close relationship between economics and management Economics is the study of how

scarce resources are used to create wealth and how that wealth is distributed

There are three aspects of the economic environment that deserve special attention for managers: jobs, business cycles, and the global economy

A The Job Outlook in Today’s Service Economy, Where Education Matters

• According to the U.S Bureau of Labor Statistics, the service economy is expected to generate 14.5 million new jobs between 2008 and 2018 With employment in management, business, and financial occupations projected to increase 11% by 2018

• Fields expected to experience job growth include scientific & technical, healthcare, finance, insurance, and construction

• The traditional notion of the service sector as a low-wage haven is no longer valid

• Education and networking skills are essential in getting a high-paying job today

B Coping with Business Cycles The business cycle is the up-and-down movement of an economy’s ability to generate wealth;

it has a predictable structure but variable timing

• Cycle-sensitive decisions that depend on the ebb and flow of the business cycle (Figure 2.3) include ordering inventory, borrowing funds, increasing staff, and

spending capital for land, equipment, and energy Timing is everything when it

comes to making good cycle-sensitive decisions

• Benefiting from Economic Forecasts Economic forecasting has come under fire lately for some widely publicized bad calls

To help address this issue, a pair of widely respected forecasting experts recommend a

consensus approach—surveying a wide variety of economic forecasts, factoring in track

records, and taking an average or consensus

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C The Challenge of a Global Economy

The global economy is impacting just about everyone both at home and at work

A Single Global Marketplace

• The new global economy must be viewed as the world moving from trade among countries to a single economy, one marketplace

• The North American Free Trade Agreement (NAFTA), the 27-nation European Union, and the 153-nation World Trade Organization (WTO) represent steps toward that single global marketplace

• The size of the global economy has expanded dramatically as a consequence of political and economic changes

Globalization Is Personal

It affects where we work, how much we’re paid, what we buy, and how much we pay Two personal aspects of the global economy are

• Working for a foreign-owned company

• Meeting world standards—

o Global economic trends – higher quality, lower wages

o Companies need to balance quality and costs to be globally competitive

BEST PRACTICES How Patricia Tate Took the Gamble out Her Tribe’s Casino Business

Question: Why is it so hard for most managers to make decisions out of sync with the

general business cycle? Use Patricia Tate along with stories from the recent recession

as examples The key to success is anticipating rather than reacting to changes in market conditions The trick is to stay slightly ahead of the pack which ultimately can lead to a more effective and efficient organization Patricia Tate demonstrate this by building a resort during a down economy which allowed her to hire the best-quality labor and get the best prices on materials while the construction industry was slow and therefore heavily discounting

Managers find it difficult to make decisions out of sync because they are often unpopular and may appear to be illogical at first glance Frequently managers are basing decisions on forecasts rather than reacting Most people want data or proof to support why a particular decision is a good idea Thus, decisions, particularly those that appear illogical or involve downsizing or cost containment efforts are often met with resistance as they are not popular with employees Managers really earn their pay during these difficult times

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Annotation 3c

A Global Brand Quiz

Brand Home country Survey Results*

Nokia Finland 4.4% (53.6% incorrectly said Japan) Lego Denmark 8.4%

Personal opinion question, however, encourage students to consider the following: until the 1960s, most people owned a few changes of clothes – maybe enough to wear for a week without a repeat Then inexpensive clothing came along, courtesy of international trade, and closets went from 8 feet long to the size of small bedrooms, complete with built-in furniture A household had one radio, and later one TV Then electronics started to come in from other countries at much lower prices, and most homes have at least as many televisions as there are people We eat grapes in the winter and bananas all year long International trade has changed almost every aspect of how we live

What implications does your answer to the previous question have for the global economy and for the

U.S economy? Two global economic trends are for quality standards to go up while wages go down However, we still worry today about lead paint, because toys imported from China have been

discovered to carry dangerous levels of the stuff Given this, how to you feel about having your vitamins made in China? People are worried about jobs going overseas Does this affect your buying decisions? Are you willing to give up your luxuries in exchange for keeping those manufacturing jobs

in the United States? Will U.S government agencies enforcing quality standards give you a greater sense of confidence and feeling of safety when buying products made in the USA?

IV THE TECHNOLOGICAL ENVIRONMENT

• Some people blame technology for environmental destruction and cultural fragmentation

Others view technology as the key to economic and social progress

• Table 2.1 shows technologies that are likely to affect our lives significantly in the future

• Technology is defined as all the tools and ideas available for extending the natural physical

and mental reach of humankind

• Technology is facilitating the evolution of the industrial age into the information age, just as it once enabled the agricultural age to evolve into the industrial age

• Organizations that use appropriate information technologies to get the right information to the right people at the right time will enjoy a competitive advantage

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Green Management: Toward Sustainability Here Comes Biodegradable Plastic

For Discussion:

Relative to the three-step innovation process in Figure 2.4, what challenges lie ahead for

Metabolix? Clearly, Metabolix has a good idea so they have advanced through the

“Concept” step Next they must develop a working prototype – sounds like they have achieved this too Now, all that is left is the Production Technology step where they develop an

efficient and effective production process where they can be profitable However, this is a much greater challenge than it may first appear Keep in mind that it takes 20 to 25 good ideas to result in one successful product They will need to define this new market to attract customers if they are going to be profitable with their new biodegradable plastic

Consider the remaining questions which are all student opinion oriented Have students share their responses with the class to spark a lively discussion

• There are two aspects of technology that have important implications for managers: the innovation process and intrapreneurship

A The Innovation Process The innovation process is defined as the systematic development and practical application of

a new idea

• A Three-Step Process

o Conceptualization

o Product technology, development of a working prototype

o Production technology, involving the development of a profitable production

process

• Innovation lag is the time it takes for a new idea to be translated into satisfied

demand The trend is toward shorter innovation lags

• Shortening innovation lag should be a high priority for modern managers Two sound management practices, goal setting and empowerment, create the sense of urgency necessary for speedier innovation

• Concurrent engineering, or parallel design, is a team approach to product design

Research, design, finance, and marketing specialists work together on new products from the beginning of the design process

B Promoting Innovation Through Intrapreneurship

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An intrapreneur is an employee who takes personal “hands-on responsibility” for pushing

any type of innovative idea, product, or process through the organization

• Today’s large companies need to foster a supportive climate for intrapreneurs if they want to maintain a competitive edge

• An organization can foster intrapreneurship if it

o Focuses on results and teamwork

o Rewards innovation and risk taking

o Tolerates and learns from mistakes

o Remains flexible and change-oriented

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