Lecture 3
The Changing Environment
of Management
Lecture Objectives
• Summarize the demographics of the new
global workforce.
• Explain how the social contract between
employer and employee has change over
the years.
• Define the term managing diversity, and
explain why it is particularly important
today.
Lecture Objectives
• Discuss how the changing political-legal
environment is affecting the practice of
management.
• Discuss why business cycles and the global
economy are vital economic considerations
for modern managers.
• Describe the three-step innovation process,
and define the term intrapreneur.
The Twenty-First-Century Workplace:
Seven Major Changes
1.
2.
3.
4.
The Virtual Organization
The Just-in-Time Workforce
The Ascendancy of Knowledge Workers
Computerized Coaching and Electronic
Monitoring
5. The Growth of Worker Diversity
6. The Aging Workforce
7. The Birth of the Dynamic Workforce
The Social Environment
• Dimensions of the Social Environment
– Demographics
• Changes in the statistical profiles of population
characteristics
– The new social contract
• Changes in the employer-employee relationship
– Inequalities
• Persistent barriers encountered by women,
minorities, and others in the workplace
– Managing diversity
• Creating organizational cultures that enable all
employees to realize their potential
Demographics of the New Workforce
• Myths About Older Workers
– They are less productive.
– They incur higher benefits costs.
– They have higher absenteeism.
– They have more accidents at work.
– They are less willing to learn.
– They are inflexible about the hours they
are willing to work.
Figure 3.1: The Changing U.S.
Workforce, 2002-2012
Figure 3.1: The Changing U.S.
Workforce, 2002-2012 (cont’d)
Figure 3.1: The Changing U.S.
Workforce, 2002-2012 (cont’d)
Figure 3.1: The Changing U.S.
Workforce, 2002-2012 (cont’d)
A New Social Contract Between
Employer and Employee
• New Social Contract
– The assumption that the employer-employee
relationship will be a shorter-term one based
on convenience and mutual benefit, rather
than for life
• Employees are expected to manage their
own careers to increase their long-term
value.
• Employers are expected to provide the
means necessary for continual workforce
development.
Nagging Inequalities in the
Workplace
• Under the Glass Ceiling
– Women continue to experience a significant
gender-wage gap and strong barriers to
advancement.
– Women are demanding more equitable
compensation and workplace opportunities.
• Continuing Pressure for Equal Opportunity
– Women, minorities, and the physically
challenged are all expected to press harder
for more employment opportunities.
Nagging Inequalities in the
Workplace (cont’d)
• Part-Timer Promises and Problems
– Contingent workers will comprise an
increasing percentage of the workforce.
– The advantages of lower wage and
benefits costs and the flexibility of a
contingent workforce are offset by their
negative work attitudes and increased
likelihood of quitting.
Managing Diversity
• Managing Diversity
– The process of creating an organizational
culture that provides all employees,
including women and minorities, with
assistance and opportunities to help them
realize their full potential
The Political-Legal Environment
• The Politicization of Management
– Issues management
• Ongoing process of identifying, evaluating, and
responding to important social and political
issues
• Purpose: Minimize “surprises” and make more
systematic and effective responses to issues
– General political responses
• Defending the status quo against all comers
• Adopting a “wait and see” approach
• Proactively trying to identify and respond to
issues
Figure 3.2: Management’s Political
Response Continuum
The Economic Environment
• The Job Outlook in Today’s Service
Economy, Where Education Counts
– The job category for “general managers
and operations managers” is rapidly
growing and one of the most resistant to
“offshoring.”
– Service sector jobs in high-paying
occupations that require at least a
bachelor’s degree are growing twice as
fast as that of all other occupations.
The Economic Environment
• Coping with Business Cycles
– Business cycles
• Alternating periods of economic
expansion and recession
• The up-and-down movement of an
economy’s ability to generate wealth
• Worldwide convergence
The Economic Environment
• Cycle-Sensitive Decisions
– Timing decisions about appropriate responses
to changes in the business cycle is necessary
to
• Reduce the chances that a firm’s assets and
resources will be underutilized or wasted in
economic downturns
• Take advantage of opportunities that will arise
during periods of rapid economic expansion
Figure 3.3: Business Cycles Affect
Managerial Decisions
The Challenge of a
Global Economy
• A Single Global Marketplace
– Global trade is causing a shift to a single economy.
– The commercial world is no longer East-West, NorthSouth; it is now one economy, one marketplace.
• Globalization Is Personal
– A growing trend: Working for a foreign-owned company
– Meeting world standards for quality and costs (through
lower wages) is necessary to be globally competitive.
The Technological Environment
• Technology
– Technology includes all the tools and
ideas available for extending the natural
and mental reach of humankind.
– Technology is facilitating the evolution of
the information age.
– Information has become a valuable
strategic resource for gaining competitive
advantage.
The Technological Environment
(cont’d)
• The Innovation Process
– The systematic and practical application of a
new idea
• Steps in the Innovation Process
– Conceptualization: When a new idea occurs to
someone
– Product technology: Creation of a working
prototype
– Production technology: Development of a
profitable production process
Figure 3.4: The Three-Step
Innovation Process
The Technological Environment
• Innovation Lag
– The time it takes for a new product to be
translated into satisfied demand
• Shortening Innovation Lag
– Goal setting: Creating a sense of urgency and
purpose
– Empowerment: Pushing decision-making
authority down to the level of the decision
– Concurrent engineering: Using a team
approach to product design involving
specialists from all functional areas including
research, production, and marketing
Promoting Innovation Through
Intrapreneurship
• Intrapreneur
– An employee who takes personal responsibility for
pushing an innovative idea through a large organization
• Fostering Intrapreneurship
–
–
–
–
Focus on results and teamwork.
Reward innovation and risk taking.
Tolerate and learn from mistakes.
Remain flexible and change-oriented.
Summary
• The global workforce will continue to become
larger, older, more diverse, and more female.
• The traditional social contract has been replaced
by a shorter-term relationship of convenience
between employee and employer.
• Persistent opportunity and income equalities are
powerful stimuli for workplace changes that will
tap every employee’s full potential.
Summary (cont’d)
• Managers are becoming increasingly politicized
and more likely to be held personally responsible
for their decisions and actions.
• Business cycles and the emerging global
economy affect the decisions managers make.
• Intrapreneurship can flourish in an organizational
climate that values individuals who champion
ideas and innovations.