Chapter 4 - The Changing Environment of Organization

HUMAN BEHAVIOR
IN ORGANIZATION
THE CHANGING ENVIRONMENT
OF ORGANIZATION
GLOBALIZATION AND
BUSINESS
Globalization the internationalization
of business activities and the shift
toward an integrated global economy.
THE GROWTH OF
INTERNATIONAL BUSINESS
Domestic
Business
International
Business
Improved Communication and

Transportation Facilities
Larger Potential Market
Lower Costs of Production and
Distribution
Response to the International
Activity of Competitors
CROSS CULTURAL
DIFFERENCES AND
SIMILARITIES
General Observation
behavior in organization settings

vary across cultures
culture itself is one major cause of
variation
organizations and the way they are
structured appear to be growing
increasingly similar
Specific Cultural Issues

Geert Hofstede Dutch
researcher
60 countries
specific attitudes and behaviors
differed significantly
values and beliefs that
characterized those countries.
Dimensions of Culture
Individualism exists to the extend that
people in a culture define themselves
primarily as individuals rather than as
part of one or more groups or
organizations.
Collectivism
characterized by tight
social frameworks in which people tend
to base their identities on the group or
organization to which they belong.
Power
Distance (orientation to authority)

the extend to which people accept as
normal an unequal distribution of power
Uncertainty
Avoidance (Preference for

Stability) the extent to which people
feel threatened by unknown situations
and prefer to be in clear and
unambiguous situation
Masculinity
(Assertiveness
or
Materialism) the extent to which the
dominant values in a society
emphasize aggressiveness and the
acquisition of money and other
possessions as opposed to concern for
people, relationships among people
and overall quality of life.
Long
- Term Values include

focusing on the future, working on
projects that have a distant payoff,
persistence and thrift.
Short
Term Values more

oriented toward the past and the
present and include respect for
traditions and social obligations.
MANAGERIAL BEHAVIOR
ACROSS CULTURES
Individual variations in people from
different cultures shape the
behavior of both managers and
employees.
Differences are more likely to
influence managerial behavior.
Differences relate to managerial
beliefs about the role of authority
and power in the organization.
Indonesia, Italy and Japan the purpose

of an organizations structure is to let
everyone know who his or her boss is
US,
Germany and Great Britain
organizational structure is intended to
coordinate group behavior and effort
Italian and German Managers it is
acceptable to bypass ones boss
Swedish and British Managers

bypassing ones superior is strongly
prohibited
Japan
Managers a manager should be

able to answer any question he or she is
asked
Swedish Manager least concern about
knowing all the answers.
Managers are becoming more career
oriented, better educated, more willing
to work cooperatively with labor, more
willing
to
delegate
and
more
cosmopolitan.
DIVERSITY AND BUSINESS

Workforce Diversity refers to the
important similarities and differences
among the employees of organizations.
Workforce diversity is valuing uniqueness,
while respecting differences, maximizing
individual potentials and synergizing
collective talents and experiences for the
growth and success of the business 3M
Stereotype a generalization about

a person or group of persons based
on certain characteristics or traits.
Prejudices judgment about others
that reinforces beliefs about
superiority and inferiority.
DIMENSIONS OF DIVERSITY
Primary
Dimension those factors

that either inborn or exert ordinary
influence on early socialization
Age
Race
Ethnicity
Gender
Physical and Mental Abilities
Sexual Orientation
Secondary
Dimensions include factors that

matter to us as individuals and that to some
extent define us to others, they may be less
permanent than primary dimensions and can be
adapted or changed
Educational Background
Geographical Location
Income
Marital Status
Military Experience
Parental Issues
Religious Beliefs
Work Experience
THE VALUE OF DIVERSITY

The US has historically been seen as s
melting pot of people from many
different
countries,
cultures
and
backgrounds.
Today, the workplace in US might be
regarded as more of tossed salad made
up of different flavors.
Diversity training is a common method
used in businesses today to better enable
employees to accept
and value
differences.
Assimilation
the process through which

members of a minority group are forced to
learn the ways of the majority group.
Valuing Diversity putting an end to the
assumption that everyone who is not a
member of dominant group must assimilate.
Valuing diversity is not the right thing to do for
workers; it is the right thing to do for the
organization,
both
financially
and
economically
TECHNOLOGY AND BUSINESS

Technology refers to the methods used to
create products, including both physical
goods and intangible services.
Three Specific Areas of Technology
Relevant to OB:
1.The shift toward a service-based economy

2.The growing use of technology fro
competitive advantage
3.Mushrooming change in information
technology
MANUFACTURING AND
SERVICE TECHNOLOGIES
Manufacturing a form of business that
combines and transforms resources into
tangible outcomes that are then sold to
others.
Service
Organization
one
that
transforms resources into an intangible
output and creates time or place utility
for its customer.
Managers have come to see that many

tools, techniques and methods that are
used in a factory are also useful to a
service firm.
Service based firms must hire and train
employees based on different skill
required by most manufacturers.
TECHNOLOGY AND
COMPETITION
Technology is the basis of competition for
some firms, especially those whose goals

include being the technology leaders in
their industries.
The speedier the process allows companies to
more quickly respond to changing economic
conditions, consumer preferences, and new
competitor products while recouping more
quickly their product-development costs.
INFORMATION TECHNOLOGY
Breakthrough in information
technology have resulted in:
leaner organizations
more flexible operations
increased collaboration among
employees
more flexible work sites
improved management processes
and systems
Information technology also resulted in:

less personal communication
less down time for managers and
employees
an increase sense of urgency vis a
vis decision making and communication
changes that have not necessarily
always been beneficial.
ETHICS AND CORPORATE

GOVERNANCE
CONTEMPORARY ETHICAL ISSUES
Ethics a persons beliefs regarding what
is right or wrong in a given situation.
The
public (as well as current and

potential investor) often get blurred
pictures on a firms competitive health
Stakeholders employees, stakeholders,

consumers, unions, creditors, government
all entitled to fair accounting so they can
make enlightened personal and business
decisions.
Other Contemporary ethical Issues

executive compensation
environmental protection
working conditions in foreign
factories
pricing policies
pressure to balance profits against
cost as businesses continue to
globalize
ENRON
From the 1990's until the fall of 2001, Enron
was famous throughout the business world
and was known as an innovator, technology
powerhouse, and a corporation with no fear.
The sudden fall of Enron in the end of 2001
shattered not just the business world but
also the lives of their employees and the
people who believed that their soar to
greatness was genuine. Their collapse was
followed by a series of revelations on how
they manipulated their success.
ENRONS COLLAPSE
Mark-to-market Accounting - The company's
aggressive accounting had corrupted
Enron's books and had allowed the company
to be far too optimistic in it's assumptions
about the future profits.
The Enron Culture - bonuses and incentives
in form of cash or stock options came in
bundles, only if you were good enough and if
you
were
considered
one
of
the
moneymakers.
Special Purpose Entity - disclosed in

Enron's financial statements depressing
earnings and debt levels severely
Key players - Enron was housed by bright
and talented employees and everyone
thinks they are so smart or smarter than
the others that they think they could
always get away with 'crime'.
AFTERMATH OF ENRONS
BANKRUPTCY
Sarbanes-Oxley Act is a US federal law
that came after the Enron scandal.
The act contains a set of standards that
regulate
public
company
boards,
management and public accounting
firms.
Some of the main regulations is that all

companies must have a majority of
independent directors, nominating
and compensation committee has to
have independent directors also the
audit committee should consist of
members
that
are
financially
educated and one of the members
have to been an expert (Wikipedia,
2012)
ETHICAL ISSUES IN
CORPORATE GOVERNANCE
Corporate Governance refers to the
oversight of a public corporation by its
board of directors
The board of public corporation is
expected to ensure that the business is
being properly manage and that the
decisions
made
by
its
senior
management are in the best interests of
shareholders and other stakeholders.
While board members need to have some

familiarity with both the firm and its
industry in order to function effectively,
they also need sufficiently independence
as might be necessary to carry out their
oversight function.
ETHICAL ISSUES IN
INFORMATION TECHNOLOGY
Individual rights to privacy
Potential abuse of information
technology by companies
Plagiarism
NEW EMPLOYMENT
RELATIONSHIPS
THE
MANAGEMENT
KNOWLEDGE WORKERS
OF
Knowledge workers those employees

who add value in organization simply
because of what they know.
Knowledge workers include computer
scientist, physical scientist, engineers,
product designers and video game
developers.
Knowledge workers tend to work in

high technology firms and are
usually experts in some abstract
knowledge
OUTSOURCING
Outsourcing the practice of hiring other
firms to work previously performed by
the organization itself.
Outsourcing helps firms focus on their
core activities and avoid getting
sidetracked onto secondary activities.
Outsourcing grows controversial when
jobs being outsourced are really being
exported to foreign countries in ways
that reduce domestic job opportunities.
TEMPORARY AND
CONTINGENCY WORKERS
Contingent Worker a person who works
for an organization on something other
than a permanent full-time basis.
Categories of Contingent Workers
independent contractors
on - call workers
temporary employees
contract and leased employees
part-time workers
An organization with a large contingent

workforce must make some decisions
about the treatment of contingent
workers relative to the treatment of
permanent, full time workers.
TIERED WORKFORCE
Tiered Workforce exists when one
group of an organizations workforce
has a contractual arrangement with the
organization objectively different from
another group performing the same
jobs.

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HUMAN BEHAVIOR

Improved Communication and

behavior in organization settings

Specific Cultural Issues

Distance (orientation to authority)

Avoidance (Preference for

- Term Values include

Term Values more

Indonesia, Italy and Japan the purpose

Swedish and British Managers

Managers a manager should be

DIVERSITY AND BUSINESS

Stereotype a generalization about

Dimension those factors

Dimensions include factors that

THE VALUE OF DIVERSITY

the process through which

TECHNOLOGY AND BUSINESS

1.The shift toward a service-based economy

Managers have come to see that many

some firms, especially those whose goals

Information technology also resulted in:

ETHICS AND CORPORATE

public (as well as current and

Stakeholders employees, stakeholders,

Other Contemporary ethical Issues

Special Purpose Entity - disclosed in

Some of the main regulations is that all

While board members need to have some

Knowledge workers those employees

Knowledge workers tend to work in

An organization with a large contingent

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