CHAPTER 3

INTEGRATIVE MANAGERIAL ISSUES

 WHAT DOES IT MEANS TO BE
“GLOBAL”?
• Organization considered as global if:
– they exchange goods and services with consumers
in other countries.
– It uses financial sources and resources its home
country known as financial globalization.

• One factor affects talent globalization is:

– Immigration laws and regulations
DIFFERENT TYPES OF ORGANIZATIONS
• Multinational Corporation (MNCs) – any type
of international company that maintains
operation in multiple countries.
• Examples: Coca-cola, Avon, Procter &
Gamble.
• Types:
i. Multidomestic corporation
ii. Global corporation
iii. Transnational (borderless) organization
 MULTIDOMESTIC CORPORATION
• Which decentralizes management and other
decisions to the local country in which it is
operating.
• Doesn’t replicate domestic success, but hired
local employees to manage business and
marketing strategies tailored to its countries.
• For example: Nestle
 GLOBAL CORPORATION
• Which centralizes its management and other
decisions in the home country.
• Treat the world market as a whole and focus
on the need for global efficiency.
• For example: Sony
 TRANSNATIONAL (BORDERLESS)
ORGANIZATION
• A structural management for global
organizations that elimination artificial
geographical barriers.
• Organization choose this to increase efficiency
and effectiveness in competitive global
marketplace.
• For example: Ford and IBM.
HOW DO ORGANIZATIONS GO
GLOBAL?
 GLOBAL SOURCING
• Also known as global outsourcing.
• Purchasing materials or labors from around
the world whichever is the cheapest.
• The goal: take advantage of lower costs in
order to be more competitive.
• For example: Dell and Apple scaled back some
of their offshore customer service operations.
 EXPORTING AND IMPORTING
• Exporting
– Making products domestically and selling them
abroad.
• Importing
– Which involves acquiring products made abroad
and selling them domestically.
 LICENSING AND FRANCHISING
• Licensing and franchising are similar
approaches involving one organization giving
another organization the right to use its brand
name, technology, or product specification
and in return for a lump sum payment or a fee
that is usually based on sales.
• Difference is:
– Licensing primarily used in manufacturing
organizations that make or sell another company’s
products.
LICENSING AND FRANCHISING (cont…)
• Difference is:
– Franchising primarily used in service organization
that want to use another company’s name and
operating methods.
• For example: KFC and McDonalds
 GLOBAL STRATEGIC ALLIANCE
• It is a partnership between an organization
and a foreign company partner or partners in
which both share resources and knowledge in
developing new products and facilities.
• Happen when organization has been doing
business internationally for a while and has
gained experience in international markets.
• For example: Honda Motor and General
Electric teamed to produce new jet engine.
 TYPES OF GLOBAL STRATEGIC
ALLIANCE
• Joint venture
– Which partners form a separate, independent
organization for some business purpose.
– For example: Hewlett-Packard has numerous
partners with various suppliers around the globe
to develop different components for its computer
equipment.
 TYPES OF GLOBAL STRATEGIC
ALLIANCE (cont…)
• Foreign subsidiary
– Separate and independent facility or office.
– Can be managed as a multidomestic organization
(local control) or as global organization
(centralized control)
– Greatest commitment of resources and poses the
greatest amount of risk.
 HOW CAN ORGANIZATIONS DEMONSTRATE
SOCIALLY RESPONSIBLE ACTIONS?
• Social responsibility/corporate social
responsibility (CSR)
– Business firm’s intention beyond its legal and
economic obligations to do the right things and act for
the good of the society.
• Social obligation
– Activities a business firm engages in to meet certain
economic and legal responsibilities.
• Social responsiveness
– Characteristics of a business firm that engages in
social actions in response to some popular needs.
WHAT IS SUSTAINABILITY AND WHY IT
IS IMPORTANT?
• Sustainability
– A company’s ability to achieve its business goals and
increase long term shareholder value by integrating
economic, environmental and social opportunities
into its business strategies.
• Important because:
– Affects many aspects of business from the creation of
products to services to their use and subsequently
disposal by consumers.
– One way an organizations can show their commitment
to being responsible.
 WHAT FACTORS DETERMINE ETHICAL
AND UNETHICAL BEHAVIOR?
• Ethics
– Set of rules or principles that defines right and
wrong conduct.
• View of ethics
– Utilitarian view of ethics: ethical decisions are
made solely on the basis of their outcomes or
consequences.
 WHAT FACTORS DETERMINE ETHICAL
AND UNETHICAL BEHAVIOR? (cont…)
• View of ethics
– Right view of ethics: individuals are concerned
with respecting and protecting individual liberties
and privileges such as the right of free consent,
the right to privacy, the right of free speech, and
so forth.
– Theory of justice view of ethics: an individual
imposes and enforces rules fairly and impartially.
 FACTORS ON ACT ETHICALLY OR
UNETHICALLY
• Factors include an individual’s morality, values,
personality, and experiences; the
organization’s culture; and the ethical issues
being faced.
• People who lack a strong moral sense are
much less likely to do the wrong things if they
are constrained by rules, policies, job
descriptions, or strong cultural norms that
discourage such behaviors.
 ENCORAGING ETHICAL BEHAVIOR
• Codes of ethics
– Formal document that states an organization’s
primary values and the ethical rules it expects
managers and non-managerial employees to follow.
– Effectiveness depends on whether management
supports them and ingrains them into the corporate
culture, and how individuals who break the codes are
treated.
– Management regular reaffirms their content, follows
the rules themselves, and publicly reprimands rule
breakers, ethics codes.
 ENCORAGING ETHICAL BEHAVIOR
(cont…)
• Ethical Leadership
– Doing business ethically requires a commitment
from managers
– Because they are the ones who uphold the shared
values and set the cultural tone.
– Managers also show their commitment through
reward and punishment practices.
 ENCORAGING ETHICAL BEHAVIOR
(cont…)
• Ethics Training
– Setting up seminars, workshops, and similar ethics
training programs to encourage ethical behavior.
– Training can increased individual’s level of moral
development and this helps increases awareness
of ethical issues in business.
 WORKFORCE DIVERSITY
• As the ways in which people in the
organization are different from and similar to
one another.
• Not only focuses on the differences but also
the similarities of the employees.
 TYPES OF DIVERSITY
• Age
– Aging population caused critical shift in the
workforce.
– Malaysia retirement age moved from 55 to 60
years old.
• Gender
– Gender diversity still happens in organizations
such as gender pay gap, career start and progress,
and misconceptions about whether women do
better jobs than men.
 TYPES OF DIVERSITY (cont…)
• Race and ethnicity
– Race: the biological heritage including physical
characteristics such as one’s skin color and
associated traits that people use to identify
themselves.
– Ethnicity: related to race, but it refers to social
traits such as one’s cultural background or
allegiance that are shared by a human population.
 TYPES OF DIVERSITY (cont…)
• Disability/Abilities
– Discrimination against person with disabilities is
prohibited and also requires employers to make
reasonable accommodations so their workplaces
are accessible to people with physical and mental
disabilities and enable them to effectively perform
their jobs.
– Managers need to create and maintain an
environment in which employees feel comfortable
disclosing their need to accommodate.
 TYPES OF DIVERSITY (cont…)
• Religion
– Law prohibits discrimination on the basis of
religion as well as race/ethnicity, country of
religion, and sex.
– Managers need to recognize and be aware of
different religions and their beliefs, paying special
attention to when certain religious holidays falls.
 TYPES OF DIVERSITY (cont…)
• GLBT- Sexual Orientation and Gender Identity
– Racial and ethics stereotypes are off-limits
unfortunately it happens all the time.
– However European Unions required all its
members to introduce legislation making it
unlawful to discriminate based on sexual
orientations.
– In US, only several states and municipal introduces
to the same law.
 OTHER TYPES OF DIVERSITY
• Socioeconomic background such as social
class and income related factors.
• Different functional teams or organizational
units.
• Physical attractiveness
• Obesity/thinness
• Job seniority
• Intellectual abilities
 MANAGERS ADAPTING TO A
CHANGING WORKFORCE
• Work-life balance programs
– Factors of blurring between work and personal
life:
• In a world global business, work never ends.
• Communication technology allows employ to do their
work at home, in their cars, or on vacation.
• When organizations had lay off employees during
economic downturn, surviving employees working
longer hours.
• Fewer families today have a single wage earner.
 MANAGERS ADAPTING TO A
CHANGING WORKFORCE (cont…)
• Today’s organization are offering family-
friendly benefits
– On site child care
– Summer day camps
– Flextime
– Job sharing
– Time off for school functions
– Telecommunicating
– Part time employment
 MANAGERS ADAPTING TO A
CHANGING WORKFORCE (cont…)
• Contingent Workers
– Part time, temporary, and contract workers who
are available for hire on an as needed basis.
– Disadvantages of hiring temp:
• They lack stability and security of permanent
employees.
• They may not identify with the organization.
• They are not as committed or motivated.
 MANAGERS ADAPTING TO A
CHANGING WORKFORCE (cont…)
• Generational Difference
– Challenges especially between baby boomers and
Gen Y.
– In terms of appropriate office attire
• The key is flexibility
– Technology
• Gen Y grown up with cell phones, e-mails, computers,
and Internet. If they need information, they turn to the
Internet. They are okay with meetings through online,
and multitasking while baby boomers prefer in person
meeting and do one task at a time.
 MANAGERS ADAPTING TO A
CHANGING WORKFORCE (cont…)
• Generational Difference
– Management Style
• Gen Y want bosses who are open minded, expert in
their field, organized, teachers, mentors, trainers, not
authoritarian or paternalistic, respectful, understanding
their needs, providing constant feedback,
communicating in strong and high drive force, and
providing stimulating and novel learning experiences.