Due dates for the three case summaries

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Due dates for the three case summaries

• September 24 (Markham Stouffville Hospital)
• October 15 (Child Health Network)
• November 19 (Health Care Equipment Corporation
  Managing in Korea)

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Group project

• 3-4 students form a group by yourself
• For students who are left out, tell me by October
  10

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New Group presentation - bonus

• I will assign groups.

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Managing in Todays world

• Objectives
• Describes three waves in modern social history
  and their implications for organizations
• Understand the current challenges faced by
  managers

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Three views of management

• The process approach (e.g.Henri Fayol)
• The system approach (e.g. Chester Barnard)
• The contingent approach

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Process approach to management

• Management activities include planning,
  organizing, leading, and controlling
• These activities are circular and continuous
• Not explicitly focus on the environment
• Organizations like a close system

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System approach to management

• An organizations is an open system
• Organizations are affected by internal factors as
  well as external factors (i.e., environment)

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An example (NY World trade center attack)

• Airline industry
• Continental Airlines lay off 12, 000 workers
• Insurance industry
• Sports industry
• Entertainment
• Stock market
• World economy
• More

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Contingent approach to management

• More complicated view of management activities
• Intervening factors (i.e., contingency variables)
  affect management performance
• Some contingency factors include size of the
  company, personal factors, economic factors, etc.

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Questions raised

• Are there any universal best management
  practices?
• How to evaluate management performance?

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How the economic development affects management
practices

• Alvin Toffliers three waves
• Agriculture
• Industrialization
• New Economy

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First wave

• Most people engaged in agriculture-related jobs
• Low productivity (productivity constrained by the
  natural environment, handwork using simple tools)
• Family management (small scale with the aim to
  meet the basic living needs)

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Second wave

• Advent of machines, mass production, and
  efficient transportation
• New group of workers blue-collar workers
• Labor and capital are two forces for the economic
  growth
• Management theories emerged (effectiveness and
  efficiency)

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Old economy New economy
National borders limit cooperation Limited information access Blue-collar workers Homogeneous population Business estranged from its environment Large corporations dominant Customers no choice National borders become meaningless Information become more accessible Knowledge workers Diverse population Social responsibilities Small entrepreneurial firms Customer needs drive business
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What is new economy?
The term New Economy refers to a set of
qualitative and quantitative changes that have
transformed the structure, functioning, and rules
of the economy. The New Economy is a knowledge
and idea-based economy where the keys to job
creation and higher standards of living are
innovative ideas and technology embedded in
services and manufactured products. It is an
economy where risk, uncertainty, and constant
change are the rule, rather than the exception.
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More people work in offices and provide services

• 93 million workers (80 workforce in the U.S.)
  process or generate information, or provide
  services to people
• Since 1969, virtually all jobs lost in goods
  production and distribution sectors have been
  replaced by office jobs.

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High-wage, high-skill Jobs have grown, but so
have low-wage, low-skill jobs

• While there were fewer than 5,000 computer
  programmers in America in 1960, there are over
  1.3 million today.
• While the share of jobs requiring moderate-term
  training is expected to decline by 1.1 percent,
  the share of jobs requiring only short-term
  training (e.g., cashiers, janitors, and waiters)
  is expected to decline only 0.3 percent.

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Trade is an increasing share of the New Economy

• The dramatic expansion of trade means more robust
  competition, which makes constant innovation more
  critical to success.
• World economy is transforming from a series of
  local industries locked in closed national
  economies to a system of integrated global
  markets contested by global players.

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Foreign Direct Investment (FDI) is on the rise
around the world

• FDI includes corporate activities such as
  business building plants or subsidiaries in
  foreign countries, and buying controlling stakes
  or shares in foreign companies.
• FDI describes the extent to which businesses
  invest all the over the globe to access markets,
  technology, and talent.

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The Economy is spawning new, fast-growing
entrepreneurial companies

• The degree to which the economy is composed of
  new rapidly growing firms is indicative of
  innovative capacity.
• Not just small firms, but also Gazelles
  (companies with sales growth for at least 20
  percent per year for four straight years)

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Fierce business competition

• Increased competition is being driven by many
  factors, including the emergence of a global
  market, the increased number of firms, new
  technology that makes it easier for firms to
  enter a new market, and pressures to raise
  shareholder value.
• In 1965, IBM faced 2,500 competitors for all its
  markets. By 1992, it faced 50,000.

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Coopetition collaboration among competitors

• Collaborative dynamic of networks, partnerships,
  and joint ventures is a main organizing principle
  in the New Economy.
• Social capital (network, shared norms, and trust)
  is as important as physical capital (plant,
  equipment)) and human capital (intellect and
  training) in driving innovation and growth.

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The New Economy is constantly churning

• As the number of firms being born and dying every
  year, there is a constant churning of job
  creation and destruction.
• Turbulent environment is a major driver of
  economic innovation and growth.

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Consumer choices are exploding

• You can have a Model T in any color as long as
  its black. not in the New Economy
• Flexible and agile (constantly developing new
  products and services to gain a new market). An
  example is Dells make-to-order

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Speed is becoming the standard

• The ability to innovation and get to market
  faster is becoming a more important determinant
  of competitive advantage.

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• Autos 6 years in 1990, now 2 years
• 77 of Hewlett Packards revenues are from
  products less than 2 years old
• IBM had over 30 of its 1995 patents incorporated
  into products by 1995.

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Microchips are everywhere

• Cars, phones, kitchen appliances, medical
  services, etc.
• Impacts convenient, comfortable, speedy,
  accurate, and efficient.

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Computing costs are plummeting

• Moore's Law (named after Gordon Moore, a founder
  of Intel), which says that the processing power
  of microchips doubles every 18 months, has a
  corollary the cost of computing is dropping by
  nearly 25 percent per year.
• By 1985, the 386 cost 0.11 cents per transistor
  and 50 per million instruction per second
  (MIPS). Ten years later, the Pentium Pro's
  introductory price amounted to 0.02 cents per
  transistor, and 4 per MIPS. And the prices are
  expected to continue to fall.

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Data transmission costs are plummeting

• The dropping cost of data transmission enables
  the instantaneous global communications.
• Technologies for transmitting data are also
  getting more and more powerful. For example,
  technology recently developed by Lucent transmits
  3.2 terabits -which is approximately equal to
  90,000 volumes of an encyclopedia- per second.

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Managerial challenges

• Managing diversity
• Managing change
• Customer-centered
• Social responsibility

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Managing diversity

• Cultural differences
• Geert Hofstedes culture dimensions
  individualism, power distance, uncertainty
  avoidance, and quantity versus quality of life
• Does culture change?

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• How to make people from different culture
  background work together?
• Policies and regulations (no discrimination
  toward minority)
• Flexible work arrangements (flexible working
  hours, telecommuting, parent leave, etc.)
• Various training programs (language and skills)
• Managers attitudes and behaviors (respect
  culture and religious differences)

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Managing change

• Why change
• Increased competition (e.g., new entrants)
• Globalization
• Technological change
• Policy change

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• How to manage change
• Continuous change
• Quantum change (work process engineering)
• Retain core employees
• Create a flexible and responsive system
  (part-time workers, contract workers, etc.)
• Creating innovative working environment
  (encourage intrapreneurs, continuous training and
  education, etc.)

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Customer-oriented

• Retain customers and enhance customer loyalty
• Increase product quality (TQM)
• Produce unique products

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Social responsibility

• Why?
• External pressure
• Long-term development
• Public image
• Differences between social obligation and social
  responsibility

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• How to social responsible
• Ethics view (utilitarian, rights, and theory of
  justice) reflected from the code of ethics
• Management practices