Principles of Management
Lesson 14
Flexibility/Agility: Life Cycle of Firm,
Diversity, Global Dimensions of Business
(Material from Management by Schermerhorn)
From Chapter 9: Flexibility in
Strategy
 Incrementalism
 Modest and incremental changes in
strategy occur as managers learn from
experience and make adjustments.
 Emergent strategies
 Develop progressively over time in the
streams of decisions that managers make
as they learn from and respond to work
situations.
From Chapter 8: Contingency
Planning
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Contingency planning
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Identifying alternative courses of action
that can be implemented to meet the
needs of changing circumstances.
Contingency plans anticipate changing
conditions.
Contingency plans contain trigger points.
From Chapter 8: Scenario Planning
 Scenario planning
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A long-term version of contingency
planning.
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Identifying alternative future scenarios.
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Plans made for each future scenario.
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Increases organization’s flexibility and
preparation for future shocks.
From Chapter 2: Contingency
Thinking
 Contingency thinking
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Tries to match managerial responses with
problems and opportunities unique to
different situations.
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Especially individual or environmental
differences.
No “one best way” to manage.
Appropriate way to manage depends on
the situation.
From Chapter 2: Peters and Waterman’s
Eight Attributes of Performance
Excellence

Eight attributes of performance excellence:
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A bias toward action
Closeness to the customer
Autonomy and entrepreneurship
Productivity through people
Hands-on and value-driven
Sticking to the knitting
Simple form and lean staff
Simultaneous loose-tight properties
From Chapter 2:
The Learning Organization
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Contemporary businesses must learn to
become learning organizations.
Core ingredients of learning organizations:

Mental models
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Personal mastery
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Systems thinking
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Shared vision
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Team learning
From Chapter 6: Life Cycle of Firm
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Life cycle of entrepreneurial firms

Birth stage

Breakthrough stage

Maturity stage
Each stage poses different managerial
challenges and requires different
managerial competencies.
Life Cycle Stages of A Firm
Acceptance Stage
Breakthrough Stage
Maturity Stage
• Establishing the firm
• Getting customers
• Finding the money
• Working on finances
• Becoming profitable
• Growing
• Refining the strategy
• Continuing growth
• Managing for success
Coping with growth
and takeoff
Investing wisely
and staying flexible
Fighting for existence
and survival
From Chapter 4: How is diversity
managed in a multicultural organization?
 Diversity:
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Describes differences among people at work.
How diversity is handled in the workplace reflects
the organization’s culture.
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Respect and inclusion.
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Disrespect and exclusion.
A potential source of competitive advantage.
From Chapter 4: How is diversity
managed in a multicultural
organization?
 Characteristics of multicultural
organizations:

Pluralism

Structural integration

Informal network integration

Absence of prejudice and discrimination
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Minimum intergroup conflict
From Affirmative Action
To Managing Diversity
Affirmative Action
Create upward mobility
for minorities and
women
Valuing Differences Managing Diversity
Build quality
relationships with
respect for diversity
Achieve full
utilization of diverse
human resources
DIVERSITY IN TEAMS
What should happen
Why it may not
• Improved creativity –
more ideas,
perspectives
• Less groupthink –
multiple viewpoints
open
discussion
• More concentration –
everyone tries hard
• Mistrust
• Negative
stereotyping
• Misunderstanding
• Inefficiencies
• Stress as
pressure to
perform builds
From Chapter 2: What are continuing
management themes of the 21st century?

Global awareness
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Pressure for quality and performance excellence is
created by a highly competitive global economy.
Has promoted increasing interest in new
management concepts.
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Process engineering
Virtual organizations
Agile factories
Network firms
Adoption of Theory Z management practices.
From Chapter 5: What are the forms and
opportunities of international business?
 Reasons for engaging in international
business:
 Profits
 Customers
 Suppliers
 Capital
 Labor
From Chapter 5: What are the forms and
opportunities of international business?
 Market entry strategies involve the sale of
goods or services to foreign markets but do
not require expensive investments.
 Types of market entry strategies:
 Global sourcing
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Exporting
Importing
Licensing agreement
Franchising
From Chapter 5: What are the forms and
opportunities of international business?
 Direct investment strategies require
major capital commitments but create
rights of ownership and control over
foreign operations.
 Types of direct investment strategies:
 Joint ventures
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Foreign subsidiaries
POPULAR CULTURE
“Differences that the Traveler Notices”
• Time -- monochronic vs. polychronic
• Space -- interpersonal distance &
proxemics
• Language -- high context vs. low
context
• Religion -- traditions and respect for
them
CULTURE SHOCK -- discomfort felt when
experiencing cultural differences
From Chapter 5: What is culture and
how does it relate to global diversity?
 Popular dimensions of culture:
 Language
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Interpersonal space
Time orientation
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Low-context cultures and high-context cultures
Monochronic cultures and polychronic cultures
Religion
Contracts and agreements
From Chapter 5: What is culture and
how does it relate to global diversity?
 Values and national cultures (Hofstede):
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Power distance
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Uncertainty avoidance
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Individualism-collectivism
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Masculinity-femininity
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Time orientation
From Chapter 5: What is culture and
how does it relate to global diversity?
 Understanding cultural differences
(Trompenaars):
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Relationships with people:
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Universalism versus particularism
Individualism versus collectivism
Neutral versus affective
Specific versus diffuse
Achievement versus prescription
Attitudes toward time — sequential and synchronic
views.
Attitudes toward environment — inner-directed
and outer-directed cultures.