Unit - 5

Recent trends in Management

 Organization’s Social Responsibilities
4 Dimensions of CSR D
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https://www.youtube.com/watch?v=l9IyDvkxADU
https://www.youtube.com/watch?v=Z5KZhm19EO0
Social Responsibility of Managers
Two opposing views of Social Responsibility
-Classical view: management’s only social responsibility is to
maximise profits
•doing “social good” adds to the cost of doing business
•Costs have to e passed o to the customers
-Socioeconomic view: businesses are not just economic institutions
•Management’s social responsibility goes beyond making profits to
include protecting and improving society’s welfare
•Businesses have responsibility to a society
•More organizations around the world have increased their social
responsibility
From Obligation to responsiveness
Social Responsibility – a business’s obligation to pursue long term goals that
help society
Social Obligation: obligation of a business to meet its economic & legal
responsibilities
Social Responsiveness – capacity of a firm to adapt to changing societal
conditions

Social Responsibility is the ethical accountability framework for the industry

which defines principles, policies and practices and codes of conduct to ensure:
-Protection of stakeholders Social Social
responsibilit responsivenes
-Sustainability of industry y s

-Quality of life improvements in the communities Social obligation

CSR is based on the concept of INTERDEPENDENCE

SOCIETY NEEDS BUSINESS

Employment & Wages

Profits & Taxes

Investment & Innovation

INTERDEPENDENCE of business &

Society
# CAUSE PRMOTION : increasing awareness and concern for social
causes
# CAUSE – RELATED MARKETING : contributing to causes based on
sales
# CORPORATE SOCIAL MARKETING : behaviour changes initiatives
# CORPORATE PHILANTHROPY : donating directly to causes –
casually cash
# COMMUNITY VOLUNTERING : employees donating time & talents in
the community
# SOCIALLY RESPONSIBLE BUSINESS PRACTICES : discretionary
practices and investment to support causes

Source: Kotler & Lee (2005)

Change Management
•Change management is the effective process of a business change
such that executive leaders, managers, and frontline employees
work in consonance to successfully implement the technology or
organisational changes. 
•The pace of change is increasing day-by-day and it is an art to
develop the skill of living with the change and also managing the
change.
•Change is no longer a choice.
•Change management is a necessary component for any
organisational performance improvement process to succeed,
including programs like Six Sigma, Business Process Re-
engineering, Total Quality Management, Organisational
Development, Restructuring, and continuous process improvement.
•Change Management includes the changes that lie within and are
controlled by the organisation and those that come to terms with the
changes occurring in the surrounding environment, i.e., the events
•Change management is not a stand-alone process for designing a
business solution. It is the processes, tools and techniques for managing
the people-side of change.
• There are some established sub disciplines in Management Sciences,
such as- Strategic Management, Personnel Management, Quality
Management, Finance Management, management methods and
techniques, and Change Management.
Strate
There are two general goals of
gy
organizational change:
i. To maximize adaptation possibilities
in relation to the environment, Proce CHANG Techn
ii. To transform the behavior models ss E ology
and the systems of values of the
organization’s members
towards integration. Peopl
e
TYPES OF CHANGE MANAGEMENT
According to Henry Mintberg - These changes may be of four types:
1. Incremental change- These changes take place frequently and in a
gradual manner. These changes are logical and involve little deviation
from the past, for example – upgradation of existing technology,
expansion of existing market etc.
2. Piecemeal change - It is simply a change only in some strategies
while others remain unchanged. For example – marketing strategy of
an organisation is being changed because of growing competition
without affecting other functional strategies.
3. Transformational change - This type of the change take place
rarely. But the nature of these changes is major and involves
significant departure from the past e.g. adopting a new technology,
diversification of organisation, operations etc.
4. Flux change- When the strategies of organisation are changed
without any clear direction it is known as period of flux. For example
some new products are added to existing product line just for
broadening.
IMPORTANCE OF CHANGE MANAGEMENT
1. Change management can help people to recognise how powerful the
human dynamics are in any change effort, how they dramatically
affect the final result and how management can use that knowledge to
attain the best possible outcome.
2. A change management strategy can act as a map for guiding action.
3. Change management ideas and tactics can help the management to
develop the relationship needed to maximize the effectiveness of a
change.

Businesses of the future should focus on:

i. Team work,
ii. Continuous learning,
iii. Business management through projects,
iv. Effective communication and cooperation,
v. Partnership with customers, suppliers and competitors,
vi. Innovation.
Change Management Process
Step 1: identification of need for change

Step 2: Determination of elements to be changed

Step 3 : Planning of Change

Step 4: Force – Field Analysis

Step 5: Soliciting Worker’s Participation

Step 6: Implementation of Change

Step 7: Appraisal
Crisis Management
•Crisis is defined as any emergency situation which disturbs the
employees as well as leads to instability in the organization. Crisis
affects an individual, group, organization or society on the whole.
Crisis is a sequence of sudden disturbing events harming the
organization.
Crisis generally arises on a short notice.
Crisis triggers a feeling of fear and threat amongst the individuals.

Crisis can arise in an organization due to following reasons:

•Technological failure and Breakdown of machines lead to crisis.
•Crisis arises when employees do not agree to each other and fight
amongst themselves.
•Violence, thefts and terrorism at the workplace result in
organization crisis.
•Neglecting minor issues in the beginning can lead to major crisis
and a situation of uncertainty at the work place
•Illegal behaviors
Crisis Management & its need
The art of dealing with sudden and unexpected events which
disturbs the employees, organization as well as external clients
refers to Crisis Management.

Need for Crisis Management

Crisis Management prepares the individuals to face unexpected
developments and adverse conditions in the organization with
courage and determination.
Employees adjust well to the sudden changes in the organization.
Employees can understand and analyze the causes of crisis and
cope with it in the best possible way.
Crisis Management helps the managers to devise strategies to
come out of uncertain conditions and also decide on the future
course of action.
Crisis Management helps the managers to feel the early signs of
crisis, warn the employees against the aftermaths and take necessary
precautions for the same.
 Role of Leaders in Crisis Management
One should lead from the front
Managers should have full control on the employees
One should be alert at the workplace
Leaders must try their level best to prevent crisis
The leaders should interact with the employees more often
Planning is essential to avoid emergency situations
Identify the important processes and systems which should keep
functioning
Leaders should strive hard to come out of tough times as soon as
possible
Role of Employees in Crisis Management
It is essential for the employees to respect their organization
Don’t ask for unjustified things
Employees must rely on accurate information
Individuals must work as a single unit during emergency situations
Cases on Crisis Management
1. The Volkswagen emissions scandal
In September 2015, the Environmental Protection Agency accused Volkswagen of
manipulating its engine controls to be able to pass laboratory emissions tests. Not
only was the company violating the Clean Air Act by selling vehicles that did not
meet environmental requirements, but it was also violating its customers’ trust by
making its cars seem more environmentally friendly.
Unfortunately, the way the company handled the scandal made things even worse. As
the story evolved, the company’s response was seen as inconsistent and, at times,
contradictory to previous statements. Executives claimed they did not know about the
cheating, only to reveal they did just a few days later. Meanwhile, the company’s PR
and social media teams struggled to keep up. As the company set out to recalled
millions of vehicles, officials promised to reimburse some, but not all, customers for
their troubles.
All the while, consumers reported that the company seemed to be handling the crisis
in a dishonest way by not fully “owning” its role in the scandal.
The brand likely would have fared better through this crisis if it had taken a few key
steps:
Been up front and honest as soon as the story broke
Kept its response consistent, with an empathetic and apologetic tone
Reimbursed all affected customers the same amount
Demonstrated a commitment to change in some way (e.g., by setting new emissions
2. Southwest Airlines’ social media response to an IT failure
In  the middle of the busy 2016 summer travel season, Southwest Airlines was
suddenly struck by a wide-reaching technology failure. Its website and other key
systems were down for more than 12 hours, prompting the airline to cancel thousands
of flights. Over the course of four days, the company worked to respond to customer
complaints quickly and effectively, in large part by leveraging social media. Its
approach offers some key lessons.
Its approach offered some key lessons, as Southwest did several things right in its
social media response:
• It apologized profusely for the inconvenience
• Admitted fault
• Continually posted updates as the crisis unfolded 
• Made use of photos and videos on Facebook and Twitter to personalize the
response.
Unfortunately, the onslaught of customer-service requests and complaints seemed to
overwhelm the company’s social media team. Not long after the IT outage began,
complaints on Twitter went unanswered for hours—and, in the case of Facebook,
days. Ideally, the company would have answered each customer in a more timely
manner.
Finally, Southwest seemed to forget that such a crisis is bound to impact all of
its social media channels—even Instagram. The company failed to post an apology or
acknowledgement of the situation on its Instagram account, instead choosing to
Total Quality Management (TQM)

TQM is a way of creating an organisational culture,

committed to the continuous improvement of skills,
teamwork, processes, product and service quality and
customer satisfaction. TQM is anchored to
organisational culture because successful TQM is
deeply embedded in virtually every aspect of
organisational life.
TQM is built around four main ideas: Do it right the
first time, Be customer centered, Make continuous
improvement a way of life, and Build teamwork and
empowerment.
TQM Tools/Techniques

The implementation of TQM involves the use of the following

techniques.
 Benchmarking
 Quality Circles
 Empowerment
 Outsourcing
 Reduced cycle time
International Management
International management is a critical area because
of globalization, it is a worldwide phenomenon whereby the
countries of the world are becoming more interconnected as trade
barriers among nations are disappearing. Companies of all kinds are
no longer limited to producing and selling their goods and services
in domestic markets. In fact, companies are encouraged to explore
global markets to stay competitive and are thus likely to have
business activity anywhere in the world. Globalization is being
facilitated by several key factors, and companies that want to
succeed in this environment must understand the key factors that are
making the business world more globally connected.

1. Lowering Trade Barriers: trade agreements, government

policies through which countries agree to eliminate cross-border
barriers to trade and to promote global integration. To understand
the importance of trade agreements, it is necessary to note that
countries have long used tariffs to protect local industries and
2: Foreign Direct Investment
Foreign direct investment (FDI) refers to deliberate efforts of a
country or company to invest in another country through the form
of ownership positions in companies in another country. In 2017,
global FDI flows amounted to USD $1.52 trillion.
Emerging market multinationals are influential companies from
emerging markets that compete head-on with established
multinationals and rewrite the rules of competition by using new
business models.
Example, WIPRO and Infosys,
India’s leading software companies.
The rising competition from emerging
markets and emerging market
multinationals means that companies
will need to continue to understand
and manage the global environment
to compete.
Foreign Direct Investment Inflows from Other
Countries Based on: UNCTAD, 2016, World Investment Report,
3: The Internet: The developments in information technology and the reduction
in costs of technological equipment mean that any multinational can reach anyone in
the world. Social media, such as Twitter and Facebook, also provide a means for
multinationals to build relationships with customers worldwide. Data also suggests
that even countries that previously had little access to the Internet are now
experiencing tremendous growth.
•There are many other forms of e-commerce, such as business-to-consumer (e.g.,
eBay), business-to-business (B2B, where companies
Sell to each other), consumer-to-business
(C2B, where consumers can sell to businesses),
And consumer-to-consumer (C2C, where
consumers can sell to other consumers).
These forms of e-commerce are all
contributing to making the global business
world more interconnected.
•Not only can companies reach new
consumers, but they can also improve their
business models. Additionally, the Internet
provides the opportunity to companies to
build relationships with consumers worldwide.
Internet Growth and Penetration Rates (% of population
with access to Internet) Based on www.Internetworldstats.com
 4. The Culture: According to Hofstede,  a Dutch social psychologist, culture is “the
collective programming of the mind which distinguishes the member of one group or category of
people from another.” It tells people who they are, which behaviors are appropriate, and which
are not acceptable in any society. It affects almost everything we do, see, feel, and believe.

Hofstede is a Dutch social scientist who developed his model by surveying over 88,000
employees in IBM subsidiaries from 72 countries. Hofstede developed this cultural model
primarily on the basis of differences in values and beliefs regarding work goals. Hofstede’s
framework is especially useful because it provides important information about differences
between countries and how to manage such differences. Recent reviews of research have shown
the utility of Hofstede’s framework for a wide variety of managerial activities, such as change
management, conflict management, leadership, negotiation, and work-related attitudes.

Hofstede model of cultural dimensions

Case Study on Cross Cultural Issues
SAP and the American CEO of a German Multinational
SAP is a German multinational specializing in enterprise application software. The company
was founded by five engineers, and the company is now the world’s leading business software
maker. Through its software, SAP helps its customers streamline production processes. SAP
also provides forecasting services to its customers to help them predict customer trends. It
currently has over 87,000 employees in 130 countries assisting over 335,000 customers
worldwide.

For the first time in its history, the company is currently headed by an American, Bill
McDermott. McDermott’s training was in sales, and that provided him with significant
expertise to become SAP’s current CEO. In 2010, SAP was facing declining revenue
worldwide and needed a turnaround. Initially, McDermott was co-CEO with Jim Hagemann
Snabe, a Danish executive who was one of the company’s cofounders. The arrangement
worked well, and when Snabe retired in 2014, McDermott became CEO.

McDermott’s success came from the many changes he instituted to better adapt to cultural
differences. For instance, he quickly discovered that sales were not very effective in the United
States because the salespeople were more interested in focusing on the engineering aspects of
SAP’s products at the expense of listening to American customers. Such experiences led to the
development of more customer-focused innovation and a more empathetic approach to
customer needs, things McDermott strongly believes in.

In visiting his German counterparts, McDermott also saw other potential sources of cross-
McDermott also discovered key differences between the way U.S. companies are managed in
comparison to German companies. For example, he found that while U.S. public companies are
pressured by quarterly results, SAP was much more interested in 30-year cycles as opposed to
90-day stock price movements.

McDermott’s success at managing cross-cultural differences is no surprise. When he was a

teenager, he purchased a distressed deli shop in Long Island. Long Island was already a melting
pot of immigrants, and he learned how to deal with a diverse group of customers. When he was
first hired at 27 to sell Xerox copy machines, he found that American customers do not have a
long time for a sales pitch. He learned to be quick and to the point. In contrast, in Asia, he found
that you had to focus on developing relationships rather than focus on the product. At the age of
29, he was asked to turn around business in Puerto Rico. There he found employee morale to be
very low because of cost-cutting measures. Rather than blindly implementing American
management, he listened to the local employees and implemented many measures to improve
operations. For instance, he worked to improve customer service. Most importantly, he reinstated
a Christmas party that had been canceled as a cost-cutting measure. This lifted morale and led to
the turnaround.
McDermott has many important lessons for aspiring cross-cultural leaders. He advises that
leaders be respectful of cross-cultural differences. Additionally, because SAP has one global
vision, he can have all employees focus on that vision. He therefore also suggests that leaders
and managers adopt a compelling vision that can be readily shared with all employees. He also
believes that the customer experience is what is critical. Finally, he recommends that the savvy
manager be human and empathetic and show humility.
Critical Thinking Questions
1. What are some of the sources of McDermott’s excellence at managing cross-cultural
differences? How did his experience managing a deli store at a young age help him
develop cross-cultural management skills?
2. What are some of the cross-cultural differences he discovered? Using your knowledge of
culture, explain some of these differences.
3. What is your assessment of his lessons for cross-cultural managers? Relate these lessons to
the GLOBE findings of the effective global leader.

Sources: Geoff Colvin, “ A CEO’s plan to defy disruption,” Fortune, November 2014, pp. 36;
Michal Lev-Ram, “Inside SAP’s radical make-over,” Fortune, April 9th, 2012, Issue 5, pp. 35-
38; Bill McDermott, “SAP’s CEO on being the American head of a German
multinational,” Harvard Business Review, 2016, November, https://hbr.org/2016/11/saps-ceo-
on-being-the-american-head-of-a-german-multinational; SAP Corporate Website
https://www.sap.com/index.html
Benchmarking
According to Evans in 1993 “Benchmarking is the process of measuring own
performance against best-in-class organizations to determine how they achieve
their performance levels and use the knowledge to improve own performance.”

Benchmarking is done for:

-Product Development
-Customer Service
-HR Practices
-Inventory Control
-Research & Development etc
Benchmarking is:
• measuring your performances against world –class organizations
• a tool to identify, establish, and achieve standards of excellence
• a disciplined method of establishing performance goals and quality improvement
projects based on industry best practices
• a positive approach to the process of finding and adapting the best practices to
improve organizational performance.
• a research project on core business practice

Benefits of Benchmarking :
• create performance standards derived from an anlysis of the best in business
• measure business processes
• asset performance over time

Benchmarking doe not:

 COPY : instead, you must adapt the information to fit your needs, your culture, and
your system. And, if you copy only be as good as your competitor, not better
 STEAL: to the contrary, it is an open, honest, legal study of another organization’s
business practices
 STOP: rather, it is a continuous process that requires recalibration
 SIX Sigma
MEANING
 SIX Sigma relies heavily on advanced statistical methods that complement and
reduce the process and product variations. It is a new way of doing business that would
prevent defects from occuring

HISTORY
• The term “SIX SIGMA” was coined by Bill Smith, an engineer with Motorola
• Late 1970’s – Motorola started experimenting with problem solving through statistical
analysis
• 1987 – Motorola successfully launched its Six Sigma program
• Motorola saved more than $ 15 billion in the first 10 years of its Six Sigma effort

SIX SIGMA AT MOTOROLA

Motorola saved $ 17 billion from 1986 to 2004, reflecting hundreds of individual
successes in all Motorola business areas including:
- Sales & Marketing
- Product Design
- manufacturing
- Customer Service
-Transactional Processes
-Supply Chain Management
Levels of Six Sigma implementation
Six Sigma Champion:
Champions undergo five days of training and are taught how to manage
MASTER
projects and act as advisors to various project teams BLACK BELT
Green Belt:
They undergo two weeks of training that includes project BLACK BELT
oriented tasks. They act as team members to the six sigma
project team. Their cooperation and involvement is GREEN BELT
necessary for project success
YELLOW BELT
Black Belt:
They receive four weeks of training and are directly involved in the
implementation f six sigma projects. They are the project leaders and go
through in-depth training on six-sigma approach and tools and work full time on the
project
Master black belt:
Theses are the people who conduct Six Sigma Training and also have on the job
training and experience.
Process Six Sigma

DPMO stands for “defects per million opportunities”

Approaches of Six Sigma

DMAIC : undertaken to improve DMADV : undertaken when there is a

existing business process need to create new design or product
Difference between both Approaches

DMAIC DMADV

Defines a business process Define customer needs

Measuring current process Measure customer needs &

specification
Identify root cause of the recurring Analyze options to meet customer
problems satisfaction

Improvements made to reduce defcts Model is designed to meet customer

needs
Keep check on future performance Model put through simulation texts for
verification
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•