The changing environment of business

presents both opportunities and challenges for

managers today. Five important environmental
forces are
1. globalization,
2. diversity,
3. technology,
4. ethics and corporate governance,
5. new employment relationships. Generational Differences
• Today’s workforce is characterized in five
generational groups:
2.1: Diversity, Equity, and Inclusion in Business
– silent generation (1928–1945)
Diversity – the variety of observable and
unobservable similarities and differences among – baby boomers (1946–1964)
people.
– Generation X (1965–1980)
Types of Diversity
– Generation Y or Millennials (1981–1996)
– Surface-level diversity – observable differences
in people, including race, age, ethnicity, physical – Generation Z (1997–2012)
abilities, physical characteristics, and gender • Older workers may have better job performance
– Deep-level diversity – individual differences that but need mentoring to adopt new technology.
cannot be seen directly, including goals, values,
personalities, decision-making styles, knowledge,
skills, abilities, and attitudes The Business Case for Diversity

– Intersectionality – simultaneous membership in • Diversity fosters greater creativity and

more than one demographic category innovation.

– Separation diversity – differences in position or • Organizational performance increases when

opinion among group members reflecting employees have a positive attitude toward diversity.
disagreement or opposition—dissimilarity in an
• Culturally diverse teams make better decisions
attitude or value, for example, especially with
over time than homogeneous ones.
regard to group goals or processes
• Women in top management results in more
– Variety diversity – differences in a certain type or
innovation.
category, including group members’ expertise,
knowledge, or functional background • Title VII of the Civil Rights Act of 1964 prohibits
employment discrimination based on race, color,
– Disparity diversity – differences in the
religion, sex, or national origin.
concentration of valuable social assets or
resources—dissimilarity in rank, pay, decision-
making authority, or status.
Barriers to Inclusion

Trends in Diversity
• By 2060, the total population is forecast to grow
from 282.1 million in 2000 to 404 million.
• Changes in the workforce and the population in
general are toward greater diversity.
• Talent shortages are forecast to rise globally.
• Population is aging; age diversity in workforce
is increasing.
– May result in younger managers supervising
older workers
– Reverse mentoring: pairing a junior employee
with a senior employee to transfer
technical/computer skills from the junior employee
to the senior one.
Managing Diversity, Equity, and Inclusion
• Top management support for diversity and for
diversity initiatives
• Reciprocal mentoring: matches senior
employees with diverse junior employees to allow
both individuals to learn more about a different
group
• Older adults may benefit from self-paced learning
environments and confidence-boosting
interventions.
• It is not realistic to claim or to pursue an “I’m
totally unbiased” stance with regard to diversity

Global Perspective
• A global perspective is distinguished by:

• A willingness to be open to and learn from

2.2: GLOBALIZATION & BUSINESS the alternative systems and meanings of
Globalization – the internationalization of business other people and cultures
activities and the shift toward an integrated global • A capacity to avoid assuming that people
economy from everywhere are the same

Factors increasing globalization: • Given globalization trends and the multicultural

nature of the U.S. workforce, managers
• Advances in communication and increasingly need a global perspective and a
transportation supportive set of skills and knowledge to be most
• Businesses have expanded internationally effective.
to increase their markets
• Control of labor, distribution and distribution
costs
• Increased international competition
2.3: TECHNOLOGY & BUSINESS
Culture
−The set of shared values, often taken for granted,
that help people in a group, organization, or society Manufacturing and Service Technologies
understand which actions are considered
• Technology – refers to the methods used to
acceptable and which are deemed unacceptable create products, including both physical goods and
Cultural competence – the ability to interact intangible services
effectively with people of different cultures
• Manufacturing – a form of business that
−Awareness of our worldview and reactions to
combines and transforms resources into tangible
people who are different outcomes that are then sold to others
−Our attitude toward cultural differences
−Once the dominant technology in the United
−Knowledge of different worldviews and cultural
States
practices
• Service organization – one that transforms
−Cross-cultural skills resources into an intangible output and creates
Cross-Cultural Differences and Similarities time or place utility for its customers

• General observations: −Experiencing tremendous growth even as

manufacturing sector declines
− Cultural and national boundaries may not
coincide.
−Behavior in organizational settings varies across
Technology and Competition
cultures.
− Culture is one major cause of this variation. • Maintaining a leadership position: technology is
− Organizations and the way they are structured the basis of competition for some firms
appear to be growing increasingly similar.
• Coping with decreasing cycle times (the time it
− The same individual behaves differently in
takes a firm to accomplish some recurring activity
different cultural settings.
or function, e.g., making deliveries, processing
− Cultural diversity can be an important source of
credit payments)
synergy in enhancing organizational effectiveness.
• Information technology and social media
• Attitudes and behaviors differ significantly
because of values and beliefs that characterize
different countries (Geert Hofstede)
− Advantages: leaner and more flexible • Ethical issues and information technology
organizations, increased collaboration, improved
– Individual rights to privacy and the potential
management processes/systems
abuse of information technology by companies
− Disadvantages: less personal communication,
less “down time,” an increased sense of
communication and decision-making urgency Corporate Social Responsibility
• Corporate social responsibility – businesses
living and working together for the common good
and valuing human dignity
2.4: ETHICS & CORPORATE GOVERNANCE – Can help a firm attract the best talent
– Customers increasingly favor companies that do
Framing Ethical Issues
the right thing
• ETHICS – a person’s beliefs regarding what is
• To have lasting effects, social responsibility
right or wrong in a given situation
efforts should be integrated into the culture of the
• Framing ethical issues relates to: organization.

– Treatment of employees (hiring, firing, wages, • The International Organization for

working conditions, respect, privacy) Standardization (ISO) has created a variety of
standards that help organizations gain international
– How employees treat the organization acceptance of their practices and outcomes.
(conflicts of interest, secrecy, confidentiality,
personal internet use, unacceptable absenteeism)
– Treatment of economic agents (customers, 2.5: NEW EMPLOYMENT RELATIONSHIPS
competitors, stockholders, suppliers, dealers,
The Management of Knowledge Workers
unions)
• Some employees add value in an organization
– Variations in ethical and legal business
simply because of what they know.
practices across countries
− Examples: computer scientists, physical
scientists, engineers, product designers, video
game developers
• Unique working arrangements and performance
motivation requirements
− Autonomous work, strong identification with
professional standard, and continual updating of
skills
− Specifically (individually) tailored compensation
packages
▪ Growth opportunities, profit sharing, less
bureaucracy

Outsourcing
• Outsourcing – the practice of hiring other firms to
do work previously performed by the organization
itself; when this work is moved overseas, it is often
called offshoring
Advantages of outsourcing:
– Helps firms to focus on core activities
– Lowers labor costs through exportation of work
Disadvantages of outsourcing:
– Disaffected employees: out-of-job workers are
used to train the newly hired foreign replacements
– Reduction of domestic job opportunities
Ethical Issues in Corporate Governance
• Corporate governance – refers to the oversight
of a public corporation by its board of directors
– Proper management of the business in the best
interests of shareholders and other stakeholders
– Independence of the board from the business
Offshoring and Contingency Workers
Offshoring – outsourcing to workers in another
country
• Advantages of offshoring include lower labor
costs.
• Disadvantages of offshoring:
– Results in loss of jobs in home country
– Controversial issue

Contingency worker – a person who works for an

organization on something other than a permanent
or full-time basis
− Includes independent contractors, on-call
workers, temporary employees (usually
hired through outside agencies), and
contract and leased employees

Worker Mobility
• Working remotely is not a new concept.
• More prevalent as a result of the COVID-19
pandemic
• The so-called “great resignation” began in
early 2021, with record numbers of American
workers quitting their jobs when workers:
− Realized, as a result of the pandemic,
they could survive on lower wages
− Wanted flexibility not provided by their
previous jobs
− Experienced a change in priorities and
wanted a better work–life balance

The Changing Nature of the Psychological

Contract
• Psychological contract – a person’s set of
expectations regarding what he or she will
contribute to an organization and what the
organization, in return, will provide to the individual
– Individuals contribute effort, skills, ability,
time, loyalty.
– Organizations provide inducements in the
form of tangible/intangible rewards.