managing in today’s world bsm 12. 2 the changing economy one of the biggest problems in managing...

MANAGING IN TODAY’S WORLD

BSM 12

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THE CHANGING ECONOMY

One of the biggest problems in managing an organization today is failing to adapt to the changing world.

Let’s look back . . . so we can understand the present!

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Social Change

Alvin Toffler is a futurist who studied the changes technology has had and predicted some of its implications on social change.

He classified each period of social history and identifies modern civilization as evolving over three “waves.”

With each new wave came a new way of doing things. Some gained and some lost from the new ways.

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The Agricultural Age

Prior to 1890s Driven by agriculture Professional managers were not needed

because most people worked for themselves

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The Industrial Age 1860s to 1960s Move from agricultural to being industrialized Changes in technology, communication, and

transportation made the Industrial Revolution possible

Advances in manufacturing processes allowed new products such as steel to be created

The growing use of steam power permitted more and more factories to operate

Created a huge demand for coal

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The Industrial Age

Telegraph and cable lines extended making it possible for businesses to communicate with suppliers and customers

Invention of the telephone in 1876 had great impact Work left the fields and moved into formal

organizations Mass production, specialized jobs, authority

relationships Rise of “blue-collar” (manual labour) industrial

workers

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Shifts

Since the 1890’s the proportion of population engaged in farming has consistently dropped

<5% of the global workforce is needed to provide our food

Since World War II there has been a shift away from manufacturing work toward service jobs

Today, services make up more than 80% of jobs in Canada and the US

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The Information Age

Start of 1970s Technological advancements were

eliminating many low-skilled, blue-collar jobs The information wave transformed society

from a manufacturing focus to one of service and knowledge

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The Information Age

Knowledge workers include professionals such as nurses, accountants, teachers, lawyers, engineers, technologists, software designers, computer programmers, etc.

Knowledge workers are people whose jobs are designed around the acquisition and application of information

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Did You Know?

2006

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Managing Change

As the waves influenced society, so too have they affected how we do business

New organizational issues stem from:

1. International markets

2. Technological improvements

3. Changes in workforce composition

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The Changing Economy

Old Economy New Economy

National borders limit competition

National borders nearly meaningless in defining operating boundaries

Technology limits access to information

Technology changes have made information accessible

Job opportunities are for blue-collar industrial workers

Job opportunities are for knowledge workers

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Old Economy New Economy

Population is relatively homogeneous

Population is characterized by cultural diversity

Business is separate from its environment

Business accepts its social responsibilities

Economy is driven by large corporations

Economy is driven by small entrepreneurial firms

Customers get what business chooses to give them

Customer needs drive business

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1. A Global Marketplace

Management in both large and small organizations is no longer strained by national borders.

The world has become a global village—no boundaries—the production and marketing of goods and services is worldwide.

To be effective, managers need to adapt to cultures, systems, and techniques that are different than their own.

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A Global Marketplace

Events in the world have an effect globally. For example:

A rise in interest rates in Japan affects managers and organizations throughout the world.

The fall of communism in Eastern Europe and the collapse of the Soviet Union created exciting opportunities for business firms.

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A Global Marketplace

Multinational corporations—corporations that maintain significant operations in two or more countries at the same time but are based in one country. Examples: Pepsico, Coca-Cola, Nike, Reebok,

Microsoft

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A Global Marketplace

Transnational corporations—corporations that maintain operations in more than one country at the same time but allows decision-making to take place at the local level. Examples: Nestle, McCain, Coca-Cola

(Multinational and transnational are sometimes used interchangeably)

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How does globalization affect managers?

Managing in a country where there is a different national culture

Recognizing that people from other countries have different ways of doing things or live differently than Canadians do

Countries have different laws

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2. Technology

Technology allows required information to be more readily available

Technology enhances production processes Technology makes it possible to better serve

customers Technology advancements are used to

provide better, more useful information

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How does technology affect managers?

Managers can do their work anywhere, anytime and get information quickly allowing them to perform their activities more effectively and efficiently

Managers and/or employees can telecommute—link remotely with organization computers

Communication and work completion are a challenge for managers

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3. Changes in Workplace Composition

In the past, management thought that employees who were “different” would want to change and become the “same”.

Today’s managers have found that employees do not set aside cultural values and lifestyle preferences when they come to work.

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3. Changes in Workplace Composition

The challenge for managers is to make organizations more accommodating to diverse groups by addressing different lifestyles, family needs, and work styles.

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How does diversity affect organizations?

As organizational diversity in terms of gender, race, age, sexual orientation, and ethnicity increases, management adapts its practices to reflect those changes--for example, workforce diversity programs at Johnson and Johnson .

To better meet the needs of the diverse workforce, some organizations are also offering family-friendly benefits.

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Assignment:

What are family-friendly benefits? Why are they important? Find several examples and list them. What affect do these benefits have for

management?