Globalization & management

of Contents

List of Figures ii

Introduction: 1

1. Globalization and Management 3

1.1. Increased Competition 5

1.2. Outsourcing 6

1.3. Culture and Ethical Standards 6

2. Change Management 7

2.1. Overcoming Resistance to change 9

2.2. Approaches to Managing Organizational Change 11

3. Total Quality Management 12

4. Business Process Re-engineering (BPR) 13

5. Balanced Scorecard 16

5.1. From Measurement Method to a Strategic Management Tool 16

5.2. Gaining Understanding by Linking Business Perspectives 18

6. The Benchmarking 19

6.1. The Benchmarking Process 19

6.2. Benchmarking Roadmap 20

6.3. External Versus Internal Benchmarking 21

6.4. Application at Various Project Phases and Management Levels 22

6.5. Validation 23

Reference 25
Introduction:

Organizational performance depends, to a large extent, on how resources are allocated and
management’s ability to adapt to changing conditions. In successful organizations, people are managed
wisely and resources are used efficiently and effectively. This helps managers reach key organizational
goals, such as keeping the company functioning in a changing external environment in which
technology, governmental activities, and competition create constant challenges.

To be successful, a company must be both efficient and effective. A firm is efficient when it makes the
best possible use of people, money, the physical plant, and technology. It is effective when goals are
met which sustain a company’s competitive advantage. A firm with excellent goals could still fail
miserably by being inefficient, meaning that the company hired the wrong people, lost key contributors,
relied on outdated technology, and made poor investment decisions. A firm is ineffective when it fails to
reach goals that sustain a company’s competitive advantage. High quality companies do things right
(they are efficient) and do the right things (they are effective).

The 21st century world of business is strongly influenced by three issues. The first is the management of
change. Organizational leaders must cope with and adapt to rapid change on a daily basis. Change
creates uncertainty and risk. The number of competitors and product offerings are greater than ever
before. Globalization means that most firms are exposed to competitive challenges both domestically
and internationally. Many products (such as software) become obsolete in a matter of a few years or
even months, forcing the firm to continuously innovate or die. Today’s managers must effectively deal
with a host of technological, legal, cultural, and organizational changes, such as downsizing,
restructuring, and mergers.

The second major new issue is an increasing emphasis on customer service. The company must satisfy
the needs of customers in ways that contribute to long-term loyalty. The term customer is now used in a
broader sense. It refers to anyone who receives a service from an employee. Customers are both
external (current or prospective consumers of the firm’s products or service) and internal (other
managers or employees who depend on the manager’s performance or inputs in some capacity). For
most successful operations, the customer represents the starting point and an ending point for almost
every activity.

The third critical issue affecting the management profession in the 21st century is the need for higher
business ethics. Ethics are the standards and values which are considered necessary for the collective
interests of employees, shareholders, and society. Several well-publicized examples of cheating,
dishonesty, and use of the firm’s resources for personal gain have emerged in firms such as WorldCom,
Tyco, General Dynamics, Enron, Arthur Andersen, and Radio Shack. In the long run, these violations will
have a negative impact on those who are influenced by such managers’ bad decisions, including
employees, other managers, and customers (Gomez-Mejia & Balkin, 2012).

Traditionally, the term manager referred only to individuals responsible for making resource allocation
decisions and with the formal authority to direct others. There are three levels of management:
strategic managers, the senior executives with overall responsibility for the firm; tactical managers
responsible for implementing the directives of strategic managers; and operational managers
responsible for day-to-day supervision.
In varying degrees successful managers at any level have certain things in common. More than once the
question has been posed, “What do managers do?” Or perhaps more precisely, “what should they do?”
Whether at the managerial, individual, or team level, the management process should include planning
and strategizing, organizing, leading, and controlling. Some of these activities are typically performed at
particular organizational levels; for example, planning and strategy making are core activities for senior
executives. However, in most contemporary organizations, all employees are responsible for at least
some aspects of the various management functions.

Managers still have authority over people and financial resources, but today’s organizations are more
decentralized than ever before, and employees have more autonomy to define their jobs, prioritize
tasks, allocate time, monitor their own work, and set their own objectives. By being empowered to
make these important choices, employees are less dependent on superiors to tell them what to do and
are encouraged to use their own expertise and ideas. In a very real sense, employees are increasingly
being asked to manage themselves.

The four management functions are closely linked. For instance, the control system warns the
organization when plans and strategies are not working and should be reconsidered. Inspiring leadership
would quickly lead to frustration if people did not know what their roles were or if there were no
procedures to guide their actions. Grouping employees into teams may lead to much wasted time and
confusion unless there is an overarching plan for unifying their efforts (Gomez-Mejia & Balkin, 2012).

Globalization and Management