POM – Module 1

Introduction to Management: definitions, managerial roles and

functions; Science or Art perspectives- External environment
global, innovative and entrepreneurial perspectives of
Management (3 Hrs.)– Managing people and organizations in
the context of New Era- Managing for competitive advantage -
the Challenges of Management (3 Hrs.)

Reference Book :
Heinz Weirich, Mark V Cannice and Harold Koontz, Management: a Global,
Innovative and Entrepreneurial Perspective, McGraw Hill Education, 14th Edition
External environment global, innovative and
entrepreneurial perspectives of Management
1. Operating in a Pluralistic Society
2. The Technological and Innovative Environments
3. The Ecological Environment
4. The Social Responsibility of Managers
5. Ethics in Managing: An Integrative Approach
6. Ethical Theories
7. Trust as the Basis for Change Management
• Every time managers plan, they take into account the needs and desires of
members of society outside the organization, as well as the needs for material and
human resources, technology, and other requirements in the external environment.
• They do likewise to some degree with almost every other kind of managerial
activity.
• All managers, whether they operate in a business, a government agency, a church,
a charitable foundation, or a university must, in varying degrees, take into account
the elements and forces of their external environment.
• While they may be able to do little or nothing to change these forces, they have no
alternative but to respond to them.
• They must identify, evaluate, and react to the forces outside the enterprise that may
affect its operation.
• The impact of the external environment on the organization is illustrated in Figure
2.1. The constraining influences of external factors on the enterprise are even more
crucial in international management
• This chapter deals with the impact of the external environment on the
organization—with a focus on the technological and ecological
environment—and the relationships between business and the society
in which it operates.
• First, the focus is on the nature of the pluralistic society. Then the
discussion expands to the topics of social responsibility and ethical
behavior.
 1. Operating in a Pluralistic Society
• Managers operate in a pluralistic society, in which many organized groups
represent various interests.
• Each group has an impact on other groups, but no one group exerts an
inordinate amount of power. Many groups exert some power over business.
• There are many stakeholders or claimants on the organization, and they have
divergent goals. It is the task of the manager to integrate their aims.
• Working within a pluralistic society has several implications for business.
1. First, there are various groups, such as environmental groups, keep business power in
balance.
2. Second, business interests can be expressed by joining groups such as the Chamber of
Commerce.
3. Third, business can participate in projects with other responsible groups for the
purpose of bettering society; an example is working toward the renewal of inner
cities.
4. Fourth, in a pluralistic society, there can be conflict as well as agreement among
groups.
5. Finally, in such a society, one group is quite aware of what the other groups are
doing.
 The Technological and Innovative Environments
• One of the most pervasive factors that influence the environment for managers is
technology.
• The term technology refers to the sum total of the knowledge we have of ways of
doing things.
• It is this advancement of technology through innovation that managers must monitor
closely as this advancement changes the competitive environment in which
managers must operate.
• Invention and innovation
• Invention and innovation are different. Invention is the development or discovery
of something new.
• The enhancement, adaptation or commercialization of this new development into
a saleable product or service is referred to as innovation.
• Thus, we define innovation as the enhancement, adaptation, or
commercialization of new products, services, or processes.
• Innovation is not a one-time event; to be successful, it has to be continuous.
Apple one of the most innovative companies, started with the computer, continued with the iPod, the iPhone
and the iPad.
Similarly, Amazon started with books, continued with the Amazon Reader, and now offers the Amazon Fire that
could be a low-cost alternative to the iPad.
2. The Technological and Innovative Environments
• Product, Service and Process Innovation
• One can distinguish between
• product innovation as illustrated by Apple’s iPod and
• service innovation such as Apple’s iTunes, and
• process innovation such as producing goods or services in a more efficient or
effective manner.

By incremental innovation we mean the use of existing knowledge,

making changes or continuous improvements of existing products or
services.
Japanese are known for the kaizen approach which is a
continuous effort to make products, services, and processes
better, more effective and efficient by reducing cost or
improving quality.
• One incremental innovation approach involves continuous
improvement by using Six Sigma that aims at reducing defects,
improving quality, and consequently increasing consumer satisfaction.
• In statistical terms, Six Sigma means a failure rate of 3.4 parts per
million.
• The Six Sigma approach involves the following steps:
• First, define the issue by, for example, listening to customer
complaints;
• Second, measure the process;
• Third, analyze the data, by for example, identifying the cause-and-
effect of a problem;
• Fourth improve the situation by, for example, conducting a
brainstorming session; and
• Fifth, control through, for example, statistical process control, or
documenting a process
Disruptive or breakthrough innovations

Companies, such as Google, may have been

breakthrough innovators but then may continue with
incremental innovation by introducing new products or
services that are not necessarily radical.
Disruptive or breakthrough innovations are new and radical and
may use new methods, materials, products, or services that serve
new markets.
Apple’s iPod and iPad are recent examples.
 3. The Ecological Environment
• Managers must take into account the ecological factors in their decision
making.
• By ecology we mean the relationship of people and other living things with
their environment, such as soil, water, and air. Land, water, and air pollution is
of great concern to all people.
• Land may be polluted by industrial waste such as packaging. Water pollution
may be caused, for example, by hazardous waste and sewage.
• Air pollution can be caused by a variety of sources, such as acid rain, vehicle
exhaust fumes, and carcinogens from manufacturing processes.
• A variety of legislation has been passed dealing with solid waste, water, and air
pollution.
• Managers must be keenly aware of these laws and regulations and must
incorporate ecological concerns into their decision-making.
• In order to protect the environment, European countries developed the ISO 14001 standard to assure
that company policies address a variety of public concerns, including pollution prevention and
compliance with relevant laws and regulations.
 4. The Social Responsibility of Managers
• There is indeed a question as to what the social responsibility of business really is.
• Moreover, the question of social responsibility, originally associated with
businesses, is now being posed with increasing frequency in regard to governments,
universities, nonprofit foundations, charitable organizations, and even churches.
• Thus, we are talking about the social responsibility and social responsiveness of all
organizations, although the focus of this discussion is on business.
• Society, awakened and vocal with respect to the urgency of social problems, is
asking managers, particularly those at the top, what they are doing to discharge their
social responsibilities and why they are not doing more.
•
5. Ethics in Managing: An Integrative Approach
• All persons, whether in business, government, university, or any other
enterprise, are concerned with ethics.
• In Webster’s Ninth New Collegiate Dictionary, ethics is defined as “the
discipline dealing with what is good and bad and with moral duty and
obligation.”
• Business ethics is concerned with truth and justice and has a variety of
aspects, such as the expectations of society, fair competition, advertising,
public relations, social responsibility, consumer autonomy, and corporate
behavior in the home country as well as abroad.
 6. Ethical Theories
• In organizations, managers compete for information, influence, and resources.
• The potential for conflicts in selecting the ends as well as the means to the ends
is easy to understand, and the question of what criteria should guide ethical
behavior becomes acute.
• Three basic types of moral theories in the field of normative ethics have been
developed.
1. Utilitarian theory
suggests that plans and actions should be evaluated by their
consequences. The underlying idea is that plans or actions should produce the
greatest good for the greatest number of people.
2. Theory based on rights
All people have basic rights. Examples are the rights to freedom of
conscience, free speech, and due process. A number of those rights can be
found in the Bill of Rights in the Constitution of the United States.
3. Theory of justice
Demands that decision-makers be guided by fairness and equity, as well
as impartiality.
7. Trust as the Basis for Change Management
• Managers are bombarded with new managerial concepts, and old ones often are disguised
by new terminology — all designed for coping with managerial change demanded by
global competition, customer expectations, and the need to respond quickly to
environmental changes.
• Professor Salvatore Belardo points out that trust is at the center of communication,
collaboration, and the willingness to change.
• Traditionally, the concept of trust is equated with integrity, loyalty, caring, and keeping
promises in the relationships between and among individuals.
• However, Belardo points out that trust should go beyond individual relationships and
extend to the organization through the creation of a culture of trust that transcends
individual leadership.
• Leaders come and go; the organization continues.
• For example, David Packard of Hewlett-Packard left as his legacy the HP Way, a
philosophy that emphasizes a code of ethics, which permeates the whole organization and
continues after his death.
 Global, Comparative, and Quality Management

International Management and Multinational Corporations

Country Alliances and Economic Blocs
International Management: Cultural and Country Differences
Porter’s Competitive Advantage of Nations
Global Innovation Indexes

Gaining a Global Competitive Advantage through Quality Management

Operating in a Pluralistic Society