Global management, Decision

Making and Change and Innovation

 Global Perspectives
• Ethnocentric: the belief that the best work
practices and approaches are those of the
home country.

• Polycentric attitude: the view that the

managers in the host country know the best
work approaches and practices for running
their businesses.
• Geocentric attitude: A world oriented view
that focuses on using the best approaches and
practices for running their businesses.
 Considerations in managing global
economy
• The political/legal environment
• The economic environment
• The cultural environment:
– National culture: the values and attitudes shared
by individuals from a specific country that shape
their behavior and beliefs about what is
important.
• Cultural intelligence: cultural awareness and
sensitivity skills.

• Global mind set: attitudes that allow a leader

to be effective in cross-cultural environments.
 Rational Decision Making
Rational decision making refers to a decision
making style when individuals use analysis, facts
and a step-by-step process to come to a
decision. Rational decision making is a precise,
analytical process that companies use to come
up with a fact-based decision.
 Steps of Rational decision making
(DIA DES)
• Define the problem.
• Identify the decision criteria
• Allocate weights to the criteria.
• Develop the alternatives.
• Evaluate the alternatives.
• Select the best alternative
 Bounded Rationality
• BR refers to the concept that decision makers (irrespective
of their level of intelligence) have to work under three
unavoidable constraints: (1) only limited, often unreliable,
information is available regarding possible alternatives and
their consequences, (2) human mind has only limited
capacity to evaluate and process the information that is
available, and (3) only a limited amount of time is available
to make a decision.

• Therefore even individuals who intend to make rational

choices are bound to make satisficing (rather than
maximizing or optimizing) choices in complex situations.
 Satisfice in Decision Making
• Examining alternatives until a practical (most
obvious, attainable, and reasonable) solution
with adequate level of acceptability is found,
and stopping the search there instead of
looking for the best-possible (optimum)
solution.
 Change and Innovation
• Organizational change: any alteration of
people, structure or technology in an
organization.

• Change agent: someone who acts as a catalyst

and assumes the responsibility for managing
the change process.
 Internal and External for Change
• External:
– Changing consumer needs and wants
– New governmental laws
– Changing technology
– Economic changes
• Internal:
– New organizational strategy
– Change in composition of workforce
– New equipment
– Changing employee attitude
 Three step changing process

unfreeze change refreeze

 Three types of change
• Structure: structural components and
structural design.
• Technology: work processes, methods, and
equipment.
• People: attitudes, expectations, perceptions
and behavior- individual and group.
 Steps of changing organizational culture
(RSS SCREW)
• Set the tone through management behavior
• Create new stories, symbols and rituals to replace
those currently in use.
• Select, promote and support
• Redesign socialization process
• Encourage acceptance of new values
• Replace unwritten norms with clearly specified
expectations.
• Shake up current subculture
• Work to get consensus through employee participation.
 Creativity vs. innovation
• Creativity: the ability to combine ideas in a
unique way or to make unusual association
between ideas.

• Innovation: taking creative ideas and turning

them into useful products or work methods.