Fundamentals of Management

DMG 1043

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 Learning Outcomes
• Understand and explain the nature and purpose
of management
• Describe the structure and level of management
in organizations
• Identify the function of leadership, organizing,
controlling and planning in an organization
• Prepare on forming the strategic goal, setting
objectives and implementing and executing the
strategy
• Emphasis on issues related to environmental
scanning and industrial analysis and the
effectiveness of allocation of resources
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Recommended Texts

• Robbins & Decenzo (2010) Fundamentals of

Management, 7th ed Prentice Hall
• Daft R (2006) The New Era of Management
International edition, Thomson South-Western
• David C Thomas Essentials of International
Management , 1st ed, SAGE Publications

• Slides © Robbins & Decenzo (2010) Fundamentals

of Management, 7th ed Prentice Hall

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UNIT 2 – MANAGING IN CULTURAL
AND ETHICAL ENVIRONMENT

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Three Waves That Changed the
World
•Agriculture
• Until the late nineteenth century, all economies were
agrarian.
• Industrialization
• From the late 1800s until the 1960s, most developed
countries moved from agrarian societies to industrial
societies.
• Information
• Information technology is transforming society from its
manufacturing focus to one of service.

2–6
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The Changing Economy
Old Economy New Economy

• National borders serve to limit • National borders no longer define an

competition organization’s operating boundaries
• Technology reinforces rigid • Technology opens up organizations and
hierarchies and limits access to makes information more accessible
information
• Job opportunities are for knowledge
• Job opportunities are for blue-collar workers
industrial workers
• Population is characterized by cultural
• Population is relatively homogeneous diversity
• Business is estranged from its • Business accepts its social
environment responsibilities
• Economy is driven by large • Economy is driven by small
corporations entrepreneurial firms
• Customers get what business chooses • Customer needs drive business
to give them
2–7
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Society and Business

• Social responsibility
• A firm’s obligation, beyond that required by the law and
economics, to pursue long-term goals that are beneficial
to society
• Social obligation
• The obligation of a business to meet its economic and
legal responsibilities and no more
• Social responsiveness
• The ability of a firm to adapt to changing societal
conditions

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Arguments for and against Social Responsibility
Arguments for: Arguments against:
• Public expectations • Violation of profit maximization
• Long-run profits • Dilution of purpose
• Ethical obligation • Costs
• Public image • Too much power
• Better environment • Lack of skills
• Discouragement of further • Lack of accountability
government regulation • Lack of broad public support
• Balance of responsibility and
power
• Stockholder interests
• Possession of resources
• Superiority of prevention over Source: Adapted from R. J. Monsen Jr., “The Social Attitudes of Management,”
cures in J. M. McGuire, ed. Contemporary Management: Issues and Views (Upper
Saddle River, NJ: Prentice Hall, 1974), p.616; and K. Davis and W. Frederick,
Business and Society: Management, Public Policy, Ethics, 5th ed. (New York:
McGraw-Hill, 1984), pp.28–41.

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 Society’s Expectations from
Organizations and Managers
• Managers regularly make decisions about issues
with a social dimension
• In competitive environment, organizations cannot
afford to be seen as socially irresponsible

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 Relationship Between Social
Responsibility and Economic
Performance
• Research studies show positive relationship
• General public perception that companies who
behave in a socially responsible way have better
business performance

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Managers Becoming More
Socially Responsible
• It is the collective behaviour and actions of
managers that make a company socially
responsible
• Managers who make the right decisions are
described as being or behaving ethically

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Ethics and Business

• Ethics
• A set of rules or principles that defines right and wrong
conduct
• Code of ethics
• A formal document that states an organization’s primary
values and the ethical rules it expects managers and
operatives to follow
• Usually written
• Must state in detail acceptable behaviours and actions

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 Three Views of Ethics

• Utilitarian view of ethics

• Making decisions solely on the basis of their outcomes
or consequences.
• Rights view of ethics
• Respecting and protecting individual liberties and
privileges
• Theory of justice view of ethics
• Fairly and impartially imposing and enforcing rules.

Source: Adapted from G. F. Cavanaugh, D. J. Moberg, and M. Valasquez, “The Ethics

of Organizational Politics,” Academy of Management Journal (June 1981): 363–74.

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Moral Development

• Is a measure of an individual’s independence as

his/her moral judgment becomes less and less
dependent on outside influences
• Stages start with making a choice between right and
wrong based on personal consequences
(continued)

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Moral Development (continued)

• As development evolves, moral judgment is less

dependent on outside factors
• Individuals with highly-developed moral
development can make clear distinctions to define
moral principles separate from any authority

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Values

• Basic convictions about what is right and wrong

• Influence ethical behaviour
• Values are developed in early years

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Organizational Factors That Affect Ethical
And Unethical Behaviour
Organizational
Culture

Ethical/Unethical
Moderators
Behaviour

Structural
Variables

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc.
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03 Pearson Education Canada Inc.
 Determinants Of Issue Intensity (Exhibit 2.3)

Source: Management, Seventh Canadian Edition, by Stephen P.

Robbins, Mary Coulter, and Robin Stuart-Kotze, page 113. Copyright ©
2003. Reprinted by permission of Pearson Education Canada Inc.

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. Megatech International College
ation Canada Inc.
Businesses Improving Ethical
Behaviour
• Strong emphasis on corporate governance
• Companies refocusing efforts on business ethics
• New legislation to hold boards of directors more
accountable

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Managers Improving Ethical
Behaviour
• Hire individuals with high ethical
standards
• Establish codes of ethics and decision
rules
• Lead by example
(continued)

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Managers Improving Ethical
Behaviour (continued)
• Delineate job goals and performance
review mechanisms
• Provide ethics training
• Conduct social audits
• Provide support to individuals facing
ethical dilemmas

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Management Responsibility
Relating to Codes of Ethics
• If possible, develop codes with active involvement
of everyone in the organization
• All levels of management must support and
continually reaffirm the importance
• Consistently discipline those who break the code
• Set an example by behaviour and action

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What Is Entrepreneurship?

• Entrepreneurship
• The process of initiating a business venture, organizing
the necessary resources, and assuming the risks and
rewards
• Steps in the entrepreneurial process
• Exploring the entrepreneurial context.
• Identifying opportunities and possible competitive
advantages
• Starting the venture.
• Managing the venture

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Diversity and the Workforce

• Increasing workforce diversity

• More variation in the background of organizational
members in terms of gender, race, age, sexual
orientation, and ethnicity
• Characteristics of the future workforce
• More heterogeneous/diverse
• Increasingly older
• More multicultural
• Diversity will require more managerial sensitivity to
individual differences.

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 Mars Incorporated Diversity Philosophy

“Distinctive voices working together within a common culture” is one of the ways
we have described how we do business at Mars. We believe that the success of
our business can be enhanced by having a workforce made up of associates from
many different backgrounds, much as our society and consumer base consist of a
wide variety of individuals. We value the talents and contributions of our diverse
workforce in reaching toward our future and in playing responsible leadership
roles.

Source: www.mars.com/other_policies/diversity.as

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Labor Supply and Demand
Adjustments
• Downsizing
• An activity in an organization designed to create a more
efficient operation through extensive layoffs
• Rightsizing
• Linking staffing levels to organizational goals
• Outsourcing
• An organization’s use of outside firms for providing
necessary products and services

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Workforces

• Core employees
• The small group of full-time employees of an
organization who provide some essential job tasks for
the organization
• Contingent workforce
• Part-time, temporary, and contract workers who are
available for hire on an as-needed basis

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Contingent Workers

• Part-time employees
• Work fewer than 40 hours a week
• Are a good source of staffing for peak hours.
• May be involved in job sharing
• Temporary employees
• Are generally employed during peak periods
• Can fill in for employees for an extended period of time
• Create a fixed labor cost during a specified period
• Contract workers
• Are hired by organizations to work on specific projects.
• Are paid when the firm receives particular deliverables.
• Are a labor cost that is fixed by contract

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Making a Company’s Culture More
Customer-responsive
• Actions that create employees with the competence,
ability, and willingness to solve customer problems
as they arise:
• Selection: hiring the right personalities and attitudes
• Training: developing the customer-focus employees
• Organizing: creating customer-friendly controls
• Empowerment: allowing employees independence in
relating to customers
• Leadership: demonstrating commitment to the customer-
focus vision

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Shaping a Customer-
Responsive
Culture

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Increased Concerns for Quality

• Continuous improvement
• Organizational commitment to constantly improving the
quality of a product or service
• Joseph Juran
• W. Edwards Deming
• Kaizen
• The Japanese term for an organization committed to
continuous improvement
• Work process engineering
• Radical or quantum change in an organization

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Summary
• Concerns about social responsibility and
managerial ethics are growing
• Entrepreneurship – steps involved
• Diversity of the workforce
• Quality and continuous improvement

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Question and Answer Session

Q&A

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Next Lecture
• UNIT 3 – DECISION MAKING

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