Chapter 3

 Types of International Organizations

- Multinational Corporation (MNC): Any and all types of international companies that maintain operations in multiple countries.

 Multidomestic Corporation: An MNC that decentralizes management and other decisions to the local country.
 Global Company: An MNC that centralizes management and other decisions in the home country.
 Borderless Organization: An MNC in which artificial geographical barriers are eliminated.

 How Organizations Go Global

 Global Sourcing: Purchasing materials or labor from around the world wherever it is cheapest.
 Exporting: Making products domestically and selling them abroad.
 Importing: Acquiring products made abroad and selling them domestically.
 licensing: An organization gives another organization the right to make or sell its products using its technology or product
specification.
 Franchising: An organization gives another organization the right to use its name and operating methods.
 Strategic Alliance: A partnership between an organization and foreign company partner(s) in which both share resources and
knowledge in developing new products or building production facilities.
 Joint Venture: A specific type of strategic alliance in which the partners agree to form a separate, independent organization for some
business purpose.
 Foreign Subsidiary: Directly investing in a foreign country by setting up a separate and independent production facility or office.

 The Economic Environment

 Free Market Economy: An economic system in which resources are primarily owned and controlled by the private sector.

 Planned Economy: An economic system in which economic decisions are planned by a central government.

 The Cultural Environment

 National Culture: includes the values and attitudes shared by individuals from a specific country that shape their behaviour and their
beliefs about what is important.

 Hofstede's Framework:
 For assessing cultures one of the most widely referenced approaches to helping managers better understand differences between
national cultures.

 Hofstede’s Five Dimensions of National Culture

 Individualistic / Collectivistic
 High power distance / Low power distance
 High uncertainty avoidance / Low uncertainty avoidance
 Achievement / Nurturing
 Long-term orientation / Short-term orientation
  Cultural Intelligence: Cultural awareness and sensitivity skills.
 Global Mind-Set: attributes that allow a leader to be effective in cross-cultural environments.
 Intellectual Capital: Knowledge of international business and the capacity to understand how business works on a global scale.
 Psychological Capital: Openness to new ideas and experiences.
 Social Capital: Ability to form connections and build trusting relationships with people who are different from you.

Chapter 5

 Workforce Diversity
 The ways in which people in an organization are different from and similar to one another.

 Levels Of Diversity
 Surface level diversity
 Easily perceived differences that may trigger certain stereotypes, but do not necessarily reflect the ways people think or
feel.

 Deep level diversity

 Differences in values, personality, and work preferences.

 Benefits of Workforce Diversity

1) People Management:

 Better use of employee talent.

 Increased quality of team problem-solving efforts.
 Ability to attract and retain employees of diverse backgrounds.

2) Organizational Performance

 Reduced costs associated with high turnover, absenteeism, and lawsuits.

 Enhanced problem-solving ability.
 Improved system flexibility.

3) Strategic

 Increased understanding of the marketplace, which improves ability to better market to diverse consumers.
  Potential to improve sales growth and increase market share.
 Potential source of competitive advantage because of improved innovation efforts.
 Viewed as moral and ethical; the “right” thing to do.

 Challenges in Managing Diversity

 Bias: A tendency or preference toward a perspective or ideology.
 Prejudice: A pre conceived belief, opinion, or judgment toward a person or a group of people.
 Stereotyping: judging a person based on a prejudicial perception of a group to which that person belongs.
 Discrimination: when someone acts out their prejudicial attitudes toward people who are the targets of their prejudice.
 Glass Ceiling: the invisible barrier that separates women and minorities from top management positions.

 How to manage Diversity?

 Secure top management commitment
 Strive to increase the accuracy of perceptions
 Increase diversity awareness
 Increase diversity skills
 Encourage flexibility
 Pay close attention to how organizational members are evaluated
 Empower employees to challenge discriminatory behaviours, actions, and remarks
 Encourage mentoring of diverse employees
 Reward employees for effectively managing diversity

 Top Management Commitment to Diversity

 Mentoring: a process whereby an experienced organizational member (a mentor) provides advice and guidance to a
less experienced member.

 Diversity Skills Training: specialized training to educate employees about the importance of diversity and to teach
them skills for working in a diverse workplace.

 Employee Resource Groups

 Groups made up of employees connected by some common dimension of diversity.

Chapter 7

 External and Internal Forces For Change

 External Factors
1) Changing consumer needs and wants
2) New governmental laws
3) Changing technology
4) Economic changes

 Internal Factors
1) New organizational strategy
2) Change in composition of workforce
3) New equipment
4) Changing employee attitudes

 Organizational Change
  Any alterations in the People (expectations, and perceptions), Structure (Structural components and structural design), or
Technology (work processes and equipment) of an organization.

 Change Agent: Someone who acts as a catalyst and assumes the responsibility for managing the change process.

 The Three-Step Change Process

1) Unfreeze
 Determine what needs to change.
 Ensure there is strong support from upper management.
 Create the need for change.
 Manage and understand the doubts and concerns

2) Change
 Communicate often.
 Scatter rumours.
 Empower action.
 Involve people in the process.

3) Refreeze
 Anchor the changes into the culture.
 Develop ways to sustain the change.
 Provide support and training.
 Celebrate success.

 Why Do People Resist Change?

 The ambiguity and uncertainty that change introduces.
 The comfort of old habits.
 A concern over personal loss of status, money, authority, friendships, and personal convenience.
 The perception that change is incompatible with the goals and interest of the organization

 Techniques for Reducing Resistance to Change

 Education and communication
 Participation
 Facilitation and support
 Negotiation
 Manipulation and co-potation
 Coercion
 Four Types of Change
 Strategy
 Structure
 Technology
 People

 Situational Factors (favourable conditions facilitate cultural change)

 Dramatic Crisis.
 Leadership changes hands.
 The organization is young and small.
 Culture is weak.

 Stress
 The adverse reaction people have to excessive pressure placed on them from extraordinary demands, constraints, or
opportunities.
 Stressors: factors that cause stress.

 Reasons Of Stress
 Role Conflicts: work expectations that are hard to satisfy.
 Role Overload: having more work to accomplish than time permits.
 Role Ambiguity: when role expectations are not clearly understood.
 Interpersonal Demands: pressures created by other employees.
 Organization structure: excessive rules and an employee's lack of opportunity to participate in decisions.
 Organizational leadership: the supervisory style of the organization’s managers.

 Types Of Personality
 Type A: People who have a chronic sense of urgency and an excessive competitive drive.
 Type B: People who are relaxed and easy-going and accept change easily.

 Symptoms of Stress
 Physical: Changes in metabolism, increased heart and breathing rates, raised blood pressure, headaches, and potential of heart
attacks.
 Psychological: Job-related dissatisfaction, tension, anxiety, irritability, boredom, and procrastination.
 Behavioural: Changes in productivity, absenteeism, job turnover, changes in eating habits, increased smoking or consumption of
alcohol, rapid speech, fidgeting, and sleep disorders.

 Reduce Stress (Job-Related)

 A realistic job preview
 Performance planning program

 Creativity
 The ability to combine ideas in a unique way or to make an unusual association between ideas.

 Innovation
 Turning the outcomes of the creative process into useful products, services, or work methods.

 Innovation Variables
 Structural Variables
 Human Resource Variables
 Cultural Variables
Chapter 8

 Planning:
 Management function that involves setting goals, establishing strategies for achieving those goals, and
developing plans to integrate and coordinate work activities.

Why Do Managers Plan...?

 Planning provides direction to managers and non-managers.

 Planning reduces uncertainty.
 Planning minimizes waste and redundancy.
 Planning establishes the goals or standards.

 Formal Planning:
 Specific goals covering a specific time period, written and shared with organizational members.

 Goal: Desired outcomes or targets.

 Plans: Documents that outline how goals are going to be met.

 Types Of Goals
 Strategic Goals: are related to all other areas of an organization’s performance.
 Financial Goals: are related to the financial performance of the organization.

 Strategic Plans: Plans that apply to the entire organization and establish the organization’s overall goals.
  Operational Plans: Plans that encompass a particular operational area of the organization.

 Long-term plans: Plans with a time frame beyond three years.

 Short-term Plans: Plans covering one year or less.

 Directional Plans: Plans that are flexible and set out general guidelines.
 Specific Plans: Plans that are clearly defined and leave no room for interpretation.

 Single-use Plan: A one-time plan specifically designed to meet the needs of a unique situation.
 Standing Plans: Ongoing plans that provide guidance for activities performed repeatedly.

 Approaches to Setting Goals

 Traditional goal-setting: An approach to setting goals in which top managers set goals that then flow down through the
organization and become sub-goals for each organizational area.

 Means-Ends Chain: An integrated network of goals in which the accomplishment of goals at one level serves as the means
for achieving the goals, or ends, at the next level.

 Management By Objectives (MBO): A process of setting mutually agreed upon goals and using those goals to evaluate
employee performance.

 Steps in MBO

Step 1: The organization’s overall objectives and strategies are formulated.

Step 2: Major objectives are allocated among divisional and departmental units.
Step 3: Unit managers collaboratively set specific objectives for their units with their managers.
Step 4: Specific objectives are collaboratively set with all department members.
Step 5: Action plans, defining how objectives are to be achieved, are specified and agreed upon by managers and employees.
Step 6: The action plans are implemented.
Step 7: Progress toward objectives is periodically reviewed, and feedback is provided.
Step 8: Successful achievement of objectives is reinforced by performance-based rewards.

 STEPS IN GOAL-SETTING
1. Review the organization’s mission, or purpose.
2. Evaluate available resources.
3. Determine the goals individually or with input from others.
4. Write down the goals and communicate them to all who need to know.
5. Review results and whether goals are being met.

 SMART Goals
 Specific
 Measurable
 Achievable
 Relevant
 Time Bounded

 The process of developing plans is influenced by three contingency factors

1. Organizational level

2. Environmental Uncertainty: When uncertainty is high, plans should be specific, but flexible,
Managers must be prepared to change or amend plans as they’re implemented. At times, they may even have to abandon
the plans.

3. Future commitments: Plans should extend far enough to meet those commitments made when the plans were developed.
Chapter 11

 Organizing: Management function that involves arranging and structuring work to accomplish the
organization’s goals.

 Organizational structure: The formal arrangement of jobs within an organization.

 Organizational Design:
- Is a step-by-step methodology which identifies dysfunctional aspects of workflow, procedures, structures and
systems, realigns them to fit current business realities/goals and then develops plans to implement the new
changes.

 Organizational chart the visual representation of an organization’s structure.

 Organizational Design a process involving decisions about six key elements:

 Work specialization
 Departmentalization
 Chain Of Command
 Spain Of Control
 Centralization & Decentralization
 Formalization

1) Work Specialization
 Dividing work activities into separate job tasks.
 Overspecialization can result in human diseconomies such as boredom, fatigue, stress, poor quality, increased
absenteeism, and higher turnover.

2) Departmentalization
 The basis by which jobs are grouped together.

 Cross-functional Team: A work team composed of individuals from various functional specialties
3) Chain Of Command
 The line of authority extending from upper organizational levels to the lowest levels, which clarifies who reports to
whom.

 Authority: The rights inherent in a managerial position to tell people what to do and to expect them to do it.

 Line authority: authority that entitles a manager to direct the work of an employee.

 Staff authority: positions with some authority that have been created to support, assist, and advise those holding line
authority.

4) Span Of Control
 Responsibility: The obligation or expectation to perform any assigned duties.

 Span Of Control: the number of employees who can be effectively and efficiently supervised by a manager.

 Unity of command: The management principle that each person should report to only one manager.

 Width of span is affected by:

- Skills and ability of the manager
- Employee characteristics
- Characteristics of the work being done
- Similarity of the task
- Complexity of the task
- Physical proximity of subordinates
- Standardization of the task2020 t 2020

5) Centralization & Decentralization

 Centralization: The degree to which decision making is concentrated at upper levels of the organization.
 Decentralization: The degree to which lower-level employees provide input or actually make decisions.
 Employee Empowerment: Giving employees more authority (power) to make decisions.
6) Formalization
 Formalization: How standardized an organization’s jobs are and the extent to which employee behavior is guided by rules
and procedures.

 Highly formalized jobs offer little discretion over what is to be done.

 Low formalization means fewer constraints on how employees do their work.

 Mechanistic organization: An organizational design that’s rigid and tightly controlled.

 Organic organization: An organizational design that’s highly adaptive and flexible.

 CONTINGENCY factors affecting structural choice

 A contingency factor: is anything that cannot be accurately predicted or forecast in the future.
 A contingency: is the unexpected, or things that are out of your control. Natural disasters, economic crisis and other major
events all fall into this category.

 When is a mechanistic structure preferable and when is an organic one more appropriate?
1) Strategy
- Changes in corporate strategy should lead to changes in an organization’s structure that support the strategy, Certain
structural designs work best with different organizational strategies.

2) Size
- As an organization grows larger, its structure tends to change from organic to mechanistic with increased
specialization, departmentalization, centralization, and rules/regulations.

 The organic structure works well for organizations pursuing meaningful and unique innovations.
 The mechanistic organization works best for companies wanting to tightly control costs.
 3) Technology
- Unit production: The production of items in units or small batches.
- Mass production: The production of items in large batches.
- Process production: The production of items in continuous processes.

4) Environment
- Mechanistic organizational structures tend to be most effective in stable and simple environments.
- The flexibility of organic organizational structures is better suited for dynamic and complex environments.

 TRADITIONAL organizational design options

 Simple Structure: An organizational design with little departmentalization, wide spans of control, centralized authority, and
little formalization.

 Functional Structure: An organizational design that groups together similar or related occupational specialties.

 Divisional Structure: An organizational structure made up of separate, semiautonomous units or divisions.

Chapter 18

 Controlling: Management function that involves monitoring, comparing, and correcting work performance.

 Control Process: A three-step process of measuring actual performance, comparing actual performance against a standard, and
taking managerial action to correct deviations or inadequate standards.
 Step 1: Measuring Actual Performance

 Step 2: Comparing Actual Performance Against the Standard

 Range of Variation: The acceptable parameters of variance between actual performance and the standard.

 Step 3: Taking Managerial Action

 Immediate Corrective Action: Corrective action that corrects problems at once to get performance back on track.

 Basic Corrective Action: Corrective action that looks at how and why performance deviated before correcting the source of
deviation.

 It’s possible that the variance was a result of an unrealistic standard, too low or too high a goal. In that situation, the
standard needs the corrective action, not the performance.

 If performance consistently exceeds the goal, then a manager should look at whether the goal is too easy and needs to be
raised.
 What Is Organizational Performance?
 Performance: The end result of an activity.
 Organizational Performance: The accumulated results of all the organization’s work activities.
 Productivity: The amount of goods or services produced divided by the inputs needed to generate that output.
 Organizational Effectiveness: A measure of how appropriate organizational goals are and how well those goals are being
met.

 TOOLS for measuring organizational performance

 All managers need appropriate tools for monitoring and measuring organizational performance. Before describing some
specific types of control tools, let’s look at the concept of feedforward, concurrent, and feedback control.
  Management by Walking Around: A term used to describe when a manager is out in the work area interacting directly
with employees.

 HOW IS INFORMATION USED IN CONTROLLING?

 Managers need the right information at the right time and in the right amount to monitor and measure organizational
activities and performance.

 Management Information System (MIS): A system used to provide management with needed information on a regular
basis.

 MIS focuses specifically on providing managers with information (processed and analysed data), not merely data (raw,
unanalysed facts).

 CONTROLLING INFORMATION
 Balanced Scorecard: A performance measurement tool that looks at more than just the financial perspective.

 Benchmarking of Best Practices:

- Benchmarking: The search for the best practices among competitors or non-competitors that lead to their
superior performance.

- Benchmark: The standard of excellence against which to measure and compare.

 Suggestions for Internal Benchmarking

 Connect best practices to strategies and goals.

 Identify best practices throughout the organization
 Develop best practices reward and recognition systems
 Communicate best practices throughout the organization.
 Create a best practices knowledge sharing system.
 Nurture best practices on an ongoing basis.