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1 ManaginginaGlobalEnvironment(10) 1.)How)do)managers)think)about)international) business?) Howtheglobaleconomycreates opportunitiesandthreatsformanagers? What sthedifferencebetweenethnocentric, polycentric,andgeocentricattitudes? Whyisitimportantformanagerstobe sensitivetoglobaldifferences? 2.)How)do)businesses)expand)globally?) Doorganisationtakeasequentialapproach togoingglobal? Whatinternationalentrymodesare available? ContrastMNCs(multinationalcorporation), TNCs(transnationalorganisation),and borderlessorganisation. 3.)What)are)the)rules)governing)the)global)trading) environment?) Whydocountriesjoinregionaltrading alliances? DescribeASEAN,EuropeanUnion,NAFTAand otherregionaltradealliances WhatistheroleoftheWTO? 4.)How)do)firms)choose)between)investment) destinations?) Howdoesthelegal8politicalenvironment affectinternationalizationdecisions? Whatframeworkscanbeusedtoassessing cultures? Whatadjustmentchallengesarefacedbya manageronglobalassignments? Globalisationofbusiness 8! Longstandinghistoryofexchange 8! Successinthemodernday=capacityto predictevaluatethemarket 8! Increasedspeedoftransaction 8! Drivers o! Infrastructure o! Reductionoftradebarriers o! Globalmarketwindows 8! Competitionhasintensified Viewsofinternationalbusiness 1.! Ethnocentrism a.! Narrowviewoftheworldbased ontheinabilitytovalueand recognisethedifferences betweenpeople b.! c.! Ingroupbias Parochialism:beliefthatthebest workapproachesandpractices ofthehomecountry 2.! Polycentrism a.! Mgrs.Inthehostcountryknow thebesetworkapproaches/ practicesforrunningbusinesses b.! E.g.hungryjacksinAusvsBurger king c.! Customisationofthemarket d.! Benefitsdisadvantagesfrom both i.! D=incincosts,lossof cultures ii.! A=betterrelationship withgovemployees 3.! Geocentrism a.! Worldorientedviewthatfocuses onusingthebestapproaches peoplefromaroundtheglobe b.! Pullonglobalstrengthstocreate thebestproduct c.! E.g.BoeingDreamliner i.! Eachcountryhasan advantage d.! Disadv:increasinglycomplex management(mgrs.needglobal localknowledge) Reducing)barriers)to)international)trade)) ) Crossculturalissues 8! Potentiallyattempttounderstandthe differentculturalconsiderations o! Foreigncustoms/market conditions o! Cannotrigidlyapplydomestic attitudesacrosscultures Globaltradingenvironment 8! Trade=essentialtoprosperitywelfare 8! Freetrade=economicgrowth productivitygainsb/cspecialisation 8! GTshapedbyforces: o! 1.Regionaltradingalliances o! 2.Alliancesagreements throughwto Tradeagreements involvereducingquotasandtariffs Bilateraltradeagreements o! Aus8NZclosereconomic relationsagreement!! Transference!! Productscanbesold legallyinausandnz o! Reciprocalbenefits Multilateraltradeagreements
2 SocialResponsibilityandEthics(11) 1. Whatissocialresponsibility(who s interestsareyouserving) a. Classicalvssocioeconomicview b. Roleofstakeholdersineachof the4stages c. whyshouldn tanorgactina sociallyresponsibleway d. differenceb/wsocialobligation, responsivenessresponsibility e. relationshipb/wsocial involvementandeconomic performance 2. Managerialethics a. Differentviewsofethicslevels ofmoraldevelopment b. 4varsthataffectethical unethicalbehaviour c. 6determinantsofissueintensity d. whatisacodeofethics,howcan itbeimproved e. howorgsimproveethical behaviourofemployees Socialresponsibility Classical o! =management sonlysocial responsibilityistomaximise profits o! Friedman) )argues)that) Managements)1 )resp)is)to)max) profits)!)resp)to)shareholders o! Socialresp,onlyconcernsthe shareholders Socioeconomic o! Broaderresponsibilityforother groupsofpeople Levelsofsocialinvolvement Socialobligation Socialresponsiveness Socialresponsibility 1.! Owners/managers 2.! Employees 3.! Stakeholders 4.! Broadersociety CSRinpractice =yahoo J! Connectaustopeopleandthingsthat matter;deliveringrichcustomer experience J! Relationshipbetweencustomer satisfactioncsr EnvironmentalIssues (a)! Legal(lightgreen) (b)! Marketapproach (c)! Stakeholderapproach (d)! Activistapproach(darkgreen) J! E.g.wastefromminingandbuildinga waterprocessingplant For/Againstsocialresponsibility For Against J! Publicexpectation J! LongJrunprofits J! Ethicalobligation J! Publicimage J! Better environment J! Discourage furthergov regulation J! Balanceofresp power J! Stockholder interests J! Possessionof resources J! Violationofprofit maximisation J! Dilutionof purpose J! Costs J! Toomuchpower J! Businessleaders lackskills J! Lackof accountability SocialResponsibilityandEconomicPerformance Posrelationshipbetweensocial involvementandeconomicperformance ofterms o! Howeverdifficulttodefine socialresponsibility and economicperformance o! Socialscreeningbeforemaking investmentdecisions PerformancedrivesCSRactivities MANAGERIALETHICS ManagerialEthics:3Views Utilitarianview o! Decisionsmadesolelyonthe basisofoutcomes/ consequences o! Belief: good =whateveryields thegreatest utility o! Maximisegood,minimiseharm o! Issue:Tryingtoidentifythe wealth,benefit,harmof activities o! Broaderimpactofactionsisnot alwaysclear Rightsview
3 Leaders and power Leadership issues in the 21 st century Five sources of power 1.! Legitimate power power a leader has as a result of his or her position in the organisation 2.! Coercive power power because of their ability to punish or control 3.! Reward power power because of ability to give benefits rewards 4.! Expert power influence that is based on expertise, special skills or knowledge 5.! Referent power power that arises because of a person s desirable resources or personal traits a.! Develops out of admiration of another and a desire to be like that person Most leaders rely on several different forms of power to affect the behaviour and performance of followers Developing trust (imp strategic alliance, cross management) -! Credibility = degree to which followers perceive someone as honest, competent and able to inspire -! Trust= belief in the integrity, character and ability of a leader 5 dimensions of trust: i.! Integrity (honesty and truthfulness) ii.! competence iii.! consistency iv.! loyalty v.! openness Managerial and leadership effectiveness depends on the ability to gain the trust of followers Providing ethical leadership Suggestions:!! give people a reason!! be loyal to organisation!! spend time with employees!! be open and candid about acceptable and proper business practices-? How improper should be fixed!! trust is essential (honesty and integrity Empowering employees -! empowerment = increasing decision making discretion of workers Sustainability initiatives and ethical transformational leadership -! Common traits:!! Willing to explore range of innovative opportunities!! Holistically access options from and environmental and societal perspectives!! Identifying internal and external stakeholder perspectives on options!! Prepared to access financial risks and benefits of implementing innovative approaches (inc. risks and benefits of not pursing them Becoming an Effective Leader Leadership training -! E.g. vision creation, understanding about content themes critical to effective visions -! Teach skills trust building and mentoring Cross cultural leadership
4 -! Adjust style to situation -! Universal appeal of transformational leader characteristics Gender differences and leadership -! Men and women tend to use different styles -! Women : democratic/ participative style (encourage participation,share power and information and enhance followers self-worth)!! Lead through inclusion -! Men: directive, command and control. Ely on formal position authority!! Transactional leadership, rewarding for good work, punishment for poor work Substitutes for leadership -! Follower characteristics such as experience, training, professional orientation or need for independence = neutralise effect of leadership (replace employee s need for leader s support
5 Chapter 8 Strategic Human Resource Management " Explain why HRM is important " 8 HRM activities and what they aim to achieve " Important external influences on the HRM process " Tasks associated with identifying and selecting competent employees " Types of orientation and training o Orientation (work unit and organisation) " Strategies for retraining competent, high-performing employees " Contemporary issues in managing HR Why is human resource management important? Our People are our most important asset Source of competitive advantage Important strategic tool Help to establish an organisation s sustainable competitive advantage Important for 3 reasons 1.! Significant source of competitive advantage 2.! Important part of organisational strategies 3.! Treatment of individuals has a significant effect on the organisational performance (e.g. High performance work practices work practices that lead to high organisational and high work performance) Sample High Performance work practice -! Self-managed teams -! Decentralised decision making -! Training programs to develop knowledge, skills and abilities -! Flexible job arrangements -! Open communication -! Performance based compensation -! Staffing based on person-job and person-organisation -! Extensive employee involvement -! Giving employees more control over decision making -! Increasing employee access to information Corporate sustainability!! Critical strategic goal for the HR department = developing the competencies, collaborative strategies and organisational capabilities required to support the organisation s sustainability initiatives!! Strategic health, safety, social and environmental initiatives!! Influences org culture, development, leadership development, talent management, performance and reward management, diversity, inclusion and relations with external stakeholders!! Triple Bottom Line = reporting on financial, social and environmental performance
6 8 HRM Activities and what they achieve Human resource management process = activities necessary for staffing the organisation and sustaining high employee performance. Ensures competent employees are identified and selected Provide employees with up to date skills and knowledge Retain Competent and High performing employees 1.! Human resource planning 2.! Recruitment (/Derecruitment) 3.! Selection 4.! Orientation 5.! Training 6.! Performance management 7.! Compensation and benefits 8.! Career development Environmental factors that influence HRM Process: -! Economy -! Labour trends -! Governmental laws and regulations in relation to industrial relations -! Demographic trends Important external influences on the HRM process The Economy s effect on HRM Evident post GFC many businesses reduce workforce, however in Aus and NZ, most able to ride out downturn with relatively large number of employees Shifting industries replacing existing jobs with growing professions Youth unemployment rates are high, and many temporary contract/ part-time positions instated instead of full time Labour Unions Unions = organisations that represent workers and seek to protect their interests through collective bargaining Negotiate: wages and conditions, work practices, hiring criteria, promotions and lay-offs, training and eligibility, disciplinary practices Shifts to more decentralised/ individual bargaining in the negotiation of pay conditions through changes in industrial relations legislation = decline in union membership Not as great environmental constraint as influence of government laws and regulations Industrial Relations Laws Industrial relations = the formal interactions between unions and an organisation s management Constantly undergoes major changes depending on the party in power E.g. Disability Discrimination Act 1992, Workplace Gender Equality Act 2012 Legislation Legislation promotes equal employment opportunities for applicants and current employees Decisions regarding who is hired is made without regard to race, sex, religion, age, national origin or disability (exceptions for genuine occupational requirements)
7 Equity = creating a work environment where employees are recruited, selected, promoted and treated based on their individual talents and capabilities issues arise because that is rarely clearly defined Affirmative action= programs that enhance the organisational status of members of protected groups Workplace safety OHS -=> ensuring safety, health and welfare of workers in the public and private sector Work councils = link employees with management Board representatives = employees who sit on a company s board of directors and represent interests of a firm s employees Managers operating across borders may need to be familiar with the specific laws and regulations that apply in the various countries Demographic trends Aging population= decline in productivity reduction in number of workers Need to cross train (i.e. succession plans, retirees as consultants, increasing crosstraining efforts) as the baby boomers retire, therefore loss of talent in companies
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