Professional Documents
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MGT 301 Module 7
MGT 301 Module 7
MANAGEMENT
MODULE 7
INTRODUCTION TO MANAGEMENT
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APEC
Australia, Canada, Chile, China, Hong Kong,
Japan, Mexico, New Zealand, Papua New
Guinea, Peru, Russia, South Korea, Taiwan,
United States, and ASEAN members (except
Cambodia, Laos, and Myanmar)
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Choosing an Office/Manufacturing
Location
Qualitative factors
work force quality
company strategy
Quantitative factors
kind of facility
exchange rates
transportation and labor
costs
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United States
1. New York City
2. Chicago
3. Toronto
4. Atlanta
5. Los Angeles
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Latin America
1. Santiago
2. Miami
3. Sao Paulo
4. Monterrey
5. Mexico City
Europe
1. London
2. Paris
3. Frankfurt
4. Brussels
5. Amsterdam
Asia Pacific
1. Shanghai
2. Beijing
3. New Delhi
4. Hong Kong
5. Mumbai
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Becoming Aware of
Cultural Differences
National Culture
The set of shared values and beliefs
that affects the perceptions, decisions,
and behavior of the people from a
particular country.
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Cultural Differences
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Tariff Barriers
A tariff is a barriers to trade.
Tariffs are taxes levied upon imports.
These seek to protect jobs in the home country.
Other countries usually retaliate.
Free trade: in a free trade agreement, each country
seeks to specialize in things they make most
efficiently.
If India is more efficient in making textiles, and the
USA in making computer software, then each
country should focus on these.
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Effects on Managers
Declining barriers have opened great opportunities for
managers.
Managers can not only sell goods and services but
also buy resources and components globally.
Managers now face a more dynamic and exciting job
due to global competition.
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Free Trade
NAFTA: North American Free Trade Agreement.
Abolishes most tariffs on goods traded between
Mexico, Canada and the U.S.
Allows unrestricted cross-border flows of
resources.
Many U.S. firms have now invested in Mexico.
This is a manufacturing opportunity.
Wage costs are lower in Mexico.
Can serve Mexico with a plant in Mexico and
reduce freight.
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Competitors
Forces yielding
Opportunities
and threats
Distributors
Customers
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International Expansion
Importing and Exporting: the least complex method of
expansion.
Exporting: firm makes products and sells abroad.
Importing: firm sells products made abroad.
Licensing: firm allows foreign organization to make and
distribute goods for a fee.
Helps the home firm since it does not have to set up a
complete production and distribution network.
Franchising: company sells a foreign organization the
rights to use brand name and know-how in return for
payment and profit percentage.
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Ethics, Social
Responsibility,
and Diversity
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Ethics
It is difficult to know when a decision is ethical. Here
is a good test:
Managerial Ethics:
If a manager makes a decision falling within usual
standards, is willing to personally communicate the
decision to stakeholders, and believes friends would
approve, then it is likely an ethical decision.
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Ethical Model
Social Ethics:
Legal rules, customs
Organizations
Code of Ethics
Professional Ethics:
Values in workplace
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Individual Ethics:
Family influence
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Ethical Origins
Societal Ethics: standards that members of society
use when dealing with each other.
Based on values and standards found in
societys legal rules, norms, etc.
Societal ethics vary based on a given society.
Strong beliefs in one country may differ
elsewhere.
Example: bribes are an accepted business practice
in some countries.
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Ethical Origins
Professional ethics: values and standards used by
groups of managers in the workplace.
Applied when decisions are not clear-cut ethically.
Example: physicians and lawyers have professional
associations that enforce these.
Individual ethics: values of an individual resulting
from their family& upbringing.
If behavior is not illegal, people will often disagree
on if it is ethical.
Ethics of top managers set the tone for firms.
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Ethical Decisions
A key ethical issue is how to disperse harm and benefits
among stakeholders.
If a firm is very profitable for two years, who should
receive the profits? Employees, managers and
stockholders all want a share.
Should we keep the cash for future slowdowns?
What is the ethical decision?
What about the reverse, when firms must layoff
workers.
Final point: stockholders are the legal owners of the
firm!
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Ethical Decisions
Some other issues managers must consider.
Should you hold payment to suppliers as long as
possible to benefit your firm?
This will harm your supplier who is a
stakeholder.
Should you pay severance pay to laid off workers?
This may decrease the stockholder's return.
Should you buy goods from overseas firms that
hire children?
If you dont the children might not earn enough
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money to eat.
Social Responsibility
Social Responsibility: the managers duty to nurture,
protect and enhance the welfare of stakeholders.
There are many ways managers respond to this duty:
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Levels of Responsibility
Obstruction
response
Low
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Defensive
response
Accommodative
response
Social responsibility
Proactive
response
High
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