Management (Complete Book)

ninth edition
STEPHEN P. ROBBINS
PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie Cook
The University of West AlabamaThe University of West Alabama
MARY COULTER
© 2007 Prentice Hall, Inc.© 2007 Prentice Hall, Inc.
All rights reserved.All rights reserved.
Introduction toIntroduction to
Management andManagement and
OrganizationsOrganizations
ChapterChapter
11

© 2007 Prentice Hall, Inc. All rights reserved. 1–2
L E A R N I N G O U T L I N EL E A R N I N G O U T L I N E
Follow this Learning Outline as you read and study this chapter.Follow this Learning Outline as you read and study this chapter.
Who Are Managers?Who Are Managers?
• Explain how managers differ from non-managerialExplain how managers differ from non-managerial
employees.employees.
• Describe how to classify managers in organizations.Describe how to classify managers in organizations.
What Is Management?What Is Management?
• Define management.Define management.
• Explain why efficiency and effectiveness are important toExplain why efficiency and effectiveness are important to
management.management.

L E A R N I N G O U T L I N E (cont’d)L E A R N I N G O U T L I N E (cont’d)
What Do Managers Do?What Do Managers Do?
• Describe the four functions of management.Describe the four functions of management.
• Explain Mintzberg’s managerial roles.Explain Mintzberg’s managerial roles.
• Describe Katz’s three essential managerial skills and howDescribe Katz’s three essential managerial skills and how
the importance of these skills changes depending onthe importance of these skills changes depending on
managerial level.managerial level.
• Discuss the changes that are impacting managers’ jobs.Discuss the changes that are impacting managers’ jobs.
• Explain why customer service and innovation areExplain why customer service and innovation are
important to the manager’s job.important to the manager’s job.

What Is An Organization?What Is An Organization?
• Describe the characteristics of an organization.Describe the characteristics of an organization.
• Explain how the concept of an organization is changing.Explain how the concept of an organization is changing.
Why Study Management?Why Study Management?
• Explain the universality of management concept.Explain the universality of management concept.
• Discuss why an understanding of management isDiscuss why an understanding of management is
important.important.
• Describe the rewards and challenges of being a manager.Describe the rewards and challenges of being a manager.

Who Are Managers?Who Are Managers?
• ManagerManager
 Someone who coordinates and oversees the work ofSomeone who coordinates and oversees the work of
other people so that organizational goals can beother people so that organizational goals can be
accomplished.accomplished.

Classifying ManagersClassifying Managers
• First-line ManagersFirst-line Managers
 Individuals who manage the work of non-managerialIndividuals who manage the work of non-managerial
• Middle ManagersMiddle Managers
 Individuals who manage the work of first-lineIndividuals who manage the work of first-line
managers.managers.
• Top ManagersTop Managers
 Individuals who are responsible for makingIndividuals who are responsible for making
organization-wide decisions and establishing plansorganization-wide decisions and establishing plans
and goals that affect the entire organization.and goals that affect the entire organization.

Exhibit 1–1Exhibit 1–1 Managerial LevelsManagerial Levels

What Is Management?What Is Management?
• Managerial ConcernsManagerial Concerns
 EfficiencyEfficiency
 ““Doing things right”Doing things right”
– Getting the most outputGetting the most output
for the least inputsfor the least inputs
 EffectivenessEffectiveness
 ““Doing the right things”Doing the right things”
– Attaining organizationalAttaining organizational
goalsgoals

Exhibit 1–2Exhibit 1–2 Effectiveness and Efficiency in ManagementEffectiveness and Efficiency in Management

What Do Managers Do?What Do Managers Do?
• Functional ApproachFunctional Approach
 PlanningPlanning
 Defining goals, establishing strategies to achieve goals,Defining goals, establishing strategies to achieve goals,
developing plans to integrate and coordinate activities.developing plans to integrate and coordinate activities.
 OrganizingOrganizing
 Arranging and structuring work to accomplish organizationalArranging and structuring work to accomplish organizational
goals.goals.
 LeadingLeading
 Working with and through people to accomplish goals.Working with and through people to accomplish goals.
 ControllingControlling
 Monitoring, comparing, and correcting work.Monitoring, comparing, and correcting work.

Exhibit 1–3Exhibit 1–3 Management FunctionsManagement Functions

What Do Managers Do? (cont’d)What Do Managers Do? (cont’d)
• Management RolesManagement Roles
Approach (Mintzberg)Approach (Mintzberg)
 Interpersonal rolesInterpersonal roles
 Figurehead, leader, liaisonFigurehead, leader, liaison
 Informational rolesInformational roles
 Monitor, disseminator,Monitor, disseminator,
spokespersonspokesperson
 Decisional rolesDecisional roles
 Disturbance handler, resourceDisturbance handler, resource
allocator, negotiatorallocator, negotiator

What Managers Actually Do (Mintzberg)What Managers Actually Do (Mintzberg)
• InteractionInteraction
 with otherswith others
 with the organizationwith the organization
 with the external contextwith the external context
of the organizationof the organization
• ReflectionReflection
 thoughtful thinkingthoughtful thinking
• ActionAction
 practical doingpractical doing

What Do Managers Do? (cont’d)What Do Managers Do? (cont’d)
• Skills ApproachSkills Approach
 Technical skillsTechnical skills
 Knowledge and proficiency in a specific fieldKnowledge and proficiency in a specific field
 Human skillsHuman skills
 The ability to work well with other peopleThe ability to work well with other people
 Conceptual skillsConceptual skills
 The ability to think and conceptualize about abstract andThe ability to think and conceptualize about abstract and
complex situations concerning the organizationcomplex situations concerning the organization

Exhibit 1–5Exhibit 1–5 Skills Needed at Different Management LevelsSkills Needed at Different Management Levels

Exhibit 1–6Exhibit 1–6 Conceptual SkillsConceptual Skills
• Using information to solve business problemsUsing information to solve business problems
• Identifying of opportunities for innovationIdentifying of opportunities for innovation
• Recognizing problem areas and implementingRecognizing problem areas and implementing
solutionssolutions
• Selecting critical information from masses ofSelecting critical information from masses of
datadata
• Understanding of business uses of technologyUnderstanding of business uses of technology
• Understanding of organization’s business modelUnderstanding of organization’s business model
Source: Based on American Management Association Survey of Managerial Skills and
Competencies, March/April 2000, found on AMA Web site (www.ama.org), October 30, 2002.

Exhibit 1–6Exhibit 1–6 Communication SkillsCommunication Skills
• Ability to transform ideas into words and actionsAbility to transform ideas into words and actions
• Credibility among colleagues, peers, andCredibility among colleagues, peers, and
subordinatessubordinates
• Listening and asking questionsListening and asking questions
• Presentation skills; spoken formatPresentation skills; spoken format
• Presentation skills; written and/or graphicPresentation skills; written and/or graphic
formatsformats

Exhibit 1–6Exhibit 1–6 Effectiveness SkillsEffectiveness Skills
• Contributing to corporate mission/departmentalContributing to corporate mission/departmental
objectivesobjectives
• Customer focusCustomer focus
• Multitasking: working at multiple tasks in parallelMultitasking: working at multiple tasks in parallel
• Negotiating skillsNegotiating skills
• Project managementProject management
• Reviewing operations and implementingReviewing operations and implementing
improvementsimprovements

Exhibit 1–6Exhibit 1–6 Effectiveness Skills (cont’d)Effectiveness Skills (cont’d)
• Setting and maintaining performance standardsSetting and maintaining performance standards
internally and externallyinternally and externally
• Setting priorities for attention and activitySetting priorities for attention and activity
• Time managementTime management

Exhibit 1–6Exhibit 1–6 Interpersonal Skills (cont’d)Interpersonal Skills (cont’d)
• Coaching and mentoring skillsCoaching and mentoring skills
• Diversity skills: working with diverse people andDiversity skills: working with diverse people and
culturescultures
• Networking within the organizationNetworking within the organization
• Networking outside the organizationNetworking outside the organization
• Working in teams; cooperation and commitmentWorking in teams; cooperation and commitment

Exhibit 1–7Exhibit 1–7 Management Skills and Management Function MatrixManagement Skills and Management Function Matrix

How The Manager’s Job Is ChangingHow The Manager’s Job Is Changing
• The Increasing Importance of CustomersThe Increasing Importance of Customers
 Customers: the reason that organizations existCustomers: the reason that organizations exist
 Managing customer relationships is the responsibility of allManaging customer relationships is the responsibility of all
managers and employees.managers and employees.
 Consistent high quality customer service is essential forConsistent high quality customer service is essential for
survival.survival.
• InnovationInnovation
 Doing things differently, exploring new territory, andDoing things differently, exploring new territory, and
taking riskstaking risks
 Managers should encourage employees to be aware of andManagers should encourage employees to be aware of and
act on opportunities for innovation.act on opportunities for innovation.

Exhibit 1–8Exhibit 1–8
Changes ImpactingChanges Impacting
the Manager’s Jobthe Manager’s Job

What Is An Organization?What Is An Organization?
• An Organization DefinedAn Organization Defined
 A deliberate arrangement of people to accomplishA deliberate arrangement of people to accomplish
some specific purpose (that individuals independentlysome specific purpose (that individuals independently
could not accomplish alone).could not accomplish alone).
• Common Characteristics of OrganizationsCommon Characteristics of Organizations
 Have a distinct purpose (goal)Have a distinct purpose (goal)
 Composed of peopleComposed of people
 Have a deliberate structureHave a deliberate structure

Exhibit 1–9Exhibit 1–9 Characteristics of OrganizationsCharacteristics of Organizations

Exhibit 1–10Exhibit 1–10 The Changing OrganizationThe Changing Organization

Why Study Management?Why Study Management?
• The Value of Studying ManagementThe Value of Studying Management
 The universality of managementThe universality of management
 Good management is needed in all organizations.Good management is needed in all organizations.
 The reality of workThe reality of work
 Employees either manage or are managed.Employees either manage or are managed.
 Rewards and challenges of being a managerRewards and challenges of being a manager
 Management offers challenging, exciting and creativeManagement offers challenging, exciting and creative
opportunities for meaningful and fulfilling work.opportunities for meaningful and fulfilling work.
 Successful managers receive significant monetary rewardsSuccessful managers receive significant monetary rewards
for their efforts.for their efforts.

Exhibit 1–11Exhibit 1–11 Universal Need for ManagementUniversal Need for Management

Exhibit 1–12Exhibit 1–12 Rewards and Challenges of Being A ManagerRewards and Challenges of Being A Manager

Terms to KnowTerms to Know
• managermanager
• first-line managersfirst-line managers
• middle managersmiddle managers
• top managerstop managers
• managementmanagement
• efficiencyefficiency
• effectivenesseffectiveness
• planningplanning
• organizingorganizing
• leadingleading
• controllingcontrolling
• management rolesmanagement roles
• interpersonal rolesinterpersonal roles
• informational rolesinformational roles
• decisional rolesdecisional roles
• technical skillstechnical skills
• human skillshuman skills
• conceptual skillsconceptual skills
• organizationorganization
• universality ofuniversality of
managementmanagement

ninth edition
STEPHEN P. ROBBINS
MARY COULTER
ManagementManagement
Yesterday and TodayYesterday and Today
ChapterChapter
22

•Historical Background of ManagementHistorical Background of Management
• Explain why studying management history is important.Explain why studying management history is important.
• Describe some early evidences of management practice.Describe some early evidences of management practice.
•Scientific ManagementScientific Management
• Describe the important contributions made by FredrickDescribe the important contributions made by Fredrick
W. Taylor and Frank and Lillian Gilbreth.W. Taylor and Frank and Lillian Gilbreth.
• Explain how today’s managers use scientificExplain how today’s managers use scientific

•General Administrative TheoryGeneral Administrative Theory
• Discuss Fayol’s contributions to management theory.Discuss Fayol’s contributions to management theory.
• Describe Max Weber’s contribution to managementDescribe Max Weber’s contribution to management
theory.theory.
• Explain how today’s managers use general administrativeExplain how today’s managers use general administrative
theory.theory.
•Quantitative ApproachQuantitative Approach
• Explain what the quantitative approach has contributedExplain what the quantitative approach has contributed
to the field of management.to the field of management.
• Discuss how today’s managers use the quantitativeDiscuss how today’s managers use the quantitative
approach.approach.

•Toward Understanding Organizational BehaviorToward Understanding Organizational Behavior
• Describe the contributions of the early advocates of OB.Describe the contributions of the early advocates of OB.
• Explain the contributions of the Hawthorne Studies to theExplain the contributions of the Hawthorne Studies to the
field of management.field of management.
• Discuss how today’s managers use the behavioralDiscuss how today’s managers use the behavioral
approach.approach.
•The Systems ApproachThe Systems Approach
• Describe an organization using the systems approach.Describe an organization using the systems approach.
• Discuss how the systems approach helps usDiscuss how the systems approach helps us

•The Contingency ApproachThe Contingency Approach
• Explain how the contingency approach differs from theExplain how the contingency approach differs from the
early theories of management.early theories of management.
• Discuss how the contingency approach helps usDiscuss how the contingency approach helps us
understand management.understand management.
•Current Issues and TrendsCurrent Issues and Trends
• Explain why we need to look at the current trends andExplain why we need to look at the current trends and
issues facing managers.issues facing managers.
• Describe the current trends and issues facing managers.Describe the current trends and issues facing managers.

Historical Background of ManagementHistorical Background of Management
• Ancient ManagementAncient Management
 Egypt (pyramids) and China (Great Wall)Egypt (pyramids) and China (Great Wall)
 Venetians (floating warship assembly lines)Venetians (floating warship assembly lines)
• Adam SmithAdam Smith
 PublishedPublished “The Wealth of Nations”“The Wealth of Nations” in 1776in 1776
 Advocated the division of labor (job specialization) toAdvocated the division of labor (job specialization) to
increase the productivity of workersincrease the productivity of workers
• Industrial RevolutionIndustrial Revolution
 Substituted machine power for human laborSubstituted machine power for human labor
 Created large organizations in need of managementCreated large organizations in need of management

Exhibit 2–1Exhibit 2–1 Development of Major Management TheoriesDevelopment of Major Management Theories

Major Approaches to ManagementMajor Approaches to Management
• Scientific ManagementScientific Management
• General Administrative TheoryGeneral Administrative Theory
• Quantitative ManagementQuantitative Management
• Organizational BehaviorOrganizational Behavior
• Systems ApproachSystems Approach
• Contingency ApproachContingency Approach

Scientific ManagementScientific Management
• Fredrick Winslow TaylorFredrick Winslow Taylor
 The “father” of scientific managementThe “father” of scientific management
 PublishedPublished Principles of Scientific ManagementPrinciples of Scientific Management (1911)(1911)
 The theory of scientific managementThe theory of scientific management
– Using scientific methods to define the “one best way” for aUsing scientific methods to define the “one best way” for a
job to be done:job to be done:
• Putting the right person on the job with the correct toolsPutting the right person on the job with the correct tools
and equipment.and equipment.
• Having a standardized method of doing the job.Having a standardized method of doing the job.
• Providing an economic incentive to the worker.Providing an economic incentive to the worker.

Exhibit 2–2Exhibit 2–2 Taylor’s Four Principles of ManagementTaylor’s Four Principles of Management
1. Develop a science for each element of an individual’s work,
which will replace the old rule-of-thumb method.
2. Scientifically select and then train, teach, and develop the
worker.
3. Heartily cooperate with the workers so as to ensure that all
work is done in accordance with the principles of the
science that has been developed.
4. Divide work and responsibility almost equally between
management and workers. Management takes over all work
for which it is better fitted than the workers.

Scientific Management (cont’d)Scientific Management (cont’d)
• Frank and Lillian GilbrethFrank and Lillian Gilbreth
 Focused on increasing worker productivity throughFocused on increasing worker productivity through
the reduction of wasted motionthe reduction of wasted motion
 Developed the microchronometer to time workerDeveloped the microchronometer to time worker
motions and optimize work performancemotions and optimize work performance
• How Do Today’s Managers Use ScientificHow Do Today’s Managers Use Scientific
Management?Management?
 Use time and motion studies to increase productivityUse time and motion studies to increase productivity
 Hire the best qualified employeesHire the best qualified employees
 Design incentive systems based on outputDesign incentive systems based on output

General Administrative TheoryGeneral Administrative Theory
• Henri FayolHenri Fayol
 Believed that the practice of management was distinctBelieved that the practice of management was distinct
from other organizational functionsfrom other organizational functions
 Developed fourteen principles of management thatDeveloped fourteen principles of management that
applied to all organizational situationsapplied to all organizational situations
• Max WeberMax Weber
 Developed a theory of authority based on an idealDeveloped a theory of authority based on an ideal
type of organization (bureaucracy)type of organization (bureaucracy)
 Emphasized rationality, predictability, impersonality, technicalEmphasized rationality, predictability, impersonality, technical
competence, and authoritarianismcompetence, and authoritarianism

Exhibit 2–3Exhibit 2–3 Fayol’s 14 Principles of ManagementFayol’s 14 Principles of Management
1.1. Division of work.Division of work.
2.2. Authority.Authority.
3.3. Discipline.Discipline.
4.4. Unity of command.Unity of command.
5.5. Unity of direction.Unity of direction.
6.6. Subordination ofSubordination of
individual interestsindividual interests
to the generalto the general
interest.interest.
7.7. Remuneration.Remuneration.
8.8. Centralization.Centralization.
9.9. Scalar chain.Scalar chain.
10.10. Order.Order.
11.11. Equity.Equity.
12.12. Stability of tenureStability of tenure
of personnel.of personnel.
13.13. Initiative.Initiative.
14.14. Esprit de corps.Esprit de corps.

Exhibit 2–4Exhibit 2–4 Weber’s Ideal BureaucracyWeber’s Ideal Bureaucracy

Quantitative Approach to ManagementQuantitative Approach to Management
• Quantitative ApproachQuantitative Approach
 Also calledAlso called operations researchoperations research oror managementmanagement
sciencescience
 Evolved from mathematical and statistical methodsEvolved from mathematical and statistical methods
developed to solve WWII military logistics and qualitydeveloped to solve WWII military logistics and quality
control problemscontrol problems
 Focuses on improving managerial decision making byFocuses on improving managerial decision making by
applying:applying:
 Statistics, optimization models, information models, andStatistics, optimization models, information models, and
computer simulationscomputer simulations

Understanding Organizational BehaviorUnderstanding Organizational Behavior
• Organizational Behavior (OB)Organizational Behavior (OB)
 The study of the actions of people at work; people areThe study of the actions of people at work; people are
the most important asset of an organizationthe most important asset of an organization
• Early OB AdvocatesEarly OB Advocates
 Robert OwenRobert Owen
 Hugo MunsterbergHugo Munsterberg
 Mary Parker FollettMary Parker Follett
 Chester BarnardChester Barnard

Exhibit 2–5Exhibit 2–5 Early Advocates of OBEarly Advocates of OB

•A series of productivity experiments conductedA series of productivity experiments conducted
at Western Electric from 1927 to 1932.at Western Electric from 1927 to 1932.
•Experimental findingsExperimental findings
Productivity unexpectedly increased under imposedProductivity unexpectedly increased under imposed
adverse working conditions.adverse working conditions.
The effect of incentive plans was less thanThe effect of incentive plans was less than
expected.expected.
•Research conclusionResearch conclusion
Social norms, group standards and attitudes moreSocial norms, group standards and attitudes more
strongly influence individual output and work behaviorstrongly influence individual output and work behavior
than do monetary incentives.than do monetary incentives.
The Hawthorne StudiesThe Hawthorne Studies

The Systems ApproachThe Systems Approach
• System DefinedSystem Defined
 A set of interrelated and interdependent partsA set of interrelated and interdependent parts
arranged in a manner that produces a unified whole.arranged in a manner that produces a unified whole.
• Basic Types of SystemsBasic Types of Systems
 Closed systemsClosed systems
 Are not influenced by and do not interact with theirAre not influenced by and do not interact with their
environment (all system input and output is internal).environment (all system input and output is internal).
 Open systemsOpen systems
 Dynamically interact to their environments by taking in inputsDynamically interact to their environments by taking in inputs
and transforming them into outputs that are distributed intoand transforming them into outputs that are distributed into
their environments.their environments.

Exhibit 2–6Exhibit 2–6 The Organization as an Open SystemThe Organization as an Open System

Implications of the Systems ApproachImplications of the Systems Approach
• Coordination of the organization’s parts isCoordination of the organization’s parts is
essential for proper functioning of the entireessential for proper functioning of the entire
organization.organization.
• Decisions and actions taken in one area of theDecisions and actions taken in one area of the
organization will have an effect in other areas oforganization will have an effect in other areas of
the organization.the organization.
• Organizations are not self-contained and,Organizations are not self-contained and,
therefore, must adapt to changes in theirtherefore, must adapt to changes in their
external environment.external environment.

The Contingency ApproachThe Contingency Approach
• Contingency Approach DefinedContingency Approach Defined
 Also sometimes called theAlso sometimes called the situational approach.situational approach.
 There is no one universally applicable set ofThere is no one universally applicable set of
management principles (rules) by which to managemanagement principles (rules) by which to manage
organizations.organizations.
 Organizations are individually different, face differentOrganizations are individually different, face different
situations (contingency variables), and requiresituations (contingency variables), and require
different ways of managing.different ways of managing.

Exhibit 2–7Exhibit 2–7 Popular Contingency VariablesPopular Contingency Variables
• Organization size
• As size increases, so do the problems of coordination.
• Routineness of task technology
• Routine technologies require organizational structures,
leadership styles, and control systems that differ from
those required by customized or nonroutine technologies.
• Environmental uncertainty
• What works best in a stable and predictable environment
may be totally inappropriate in a rapidly changing and
unpredictable environment.
• Individual differences
• Individuals differ in terms of their desire for growth,
autonomy, tolerance of ambiguity, and expectations.

Current Trends and IssuesCurrent Trends and Issues
• GlobalizationGlobalization
• EthicsEthics
• Workforce DiversityWorkforce Diversity
• EntrepreneurshipEntrepreneurship
• E-businessE-business
• Knowledge ManagementKnowledge Management
• Learning OrganizationsLearning Organizations
• Quality ManagementQuality Management

Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)
• GlobalizationGlobalization
 Management in international organizationsManagement in international organizations
 Political and cultural challenges of operating in aPolitical and cultural challenges of operating in a
global marketglobal market
 Working with people from different culturesWorking with people from different cultures
 Coping with anticapitalist backlashCoping with anticapitalist backlash
 Movement of jobs to countries with low-cost laborMovement of jobs to countries with low-cost labor
• EthicsEthics
 Increased emphasis on ethics education in collegeIncreased emphasis on ethics education in college
curriculumscurriculums
 Increased creation and use of codes of ethics byIncreased creation and use of codes of ethics by
businessesbusinesses

Exhibit 2–8Exhibit 2–8 A Process for Addressing Ethical DilemmasA Process for Addressing Ethical Dilemmas
Step 1: What is the ethical dilemma?
Step 2: Who are the affected stakeholders?
Step 3: What personal, organizational, and
external factors are important to
my decision?
Step 4: What are possible alternatives?
Step 5: Make a decision and act on it.

• Workforce DiversityWorkforce Diversity
 Increasing heterogeneity in the workforceIncreasing heterogeneity in the workforce
 More gender, minority, ethnic, and other forms of diversity inMore gender, minority, ethnic, and other forms of diversity in
employeesemployees
 Aging workforceAging workforce
 Older employees who work longer and do not retireOlder employees who work longer and do not retire
 The increased costs of public and private benefits for olderThe increased costs of public and private benefits for older
workersworkers
 An increasing demand for products and services related toAn increasing demand for products and services related to
aging.aging.

• Entrepreneurship DefinedEntrepreneurship Defined
 The process of starting new businesses, generally inThe process of starting new businesses, generally in
response to opportunities.response to opportunities.
• Entrepreneurship processEntrepreneurship process
 Pursuit of opportunitiesPursuit of opportunities
 Innovation in products, services, or business methodsInnovation in products, services, or business methods
 Desire for continual growth of the organizationDesire for continual growth of the organization

• E-Business (Electronic Business)E-Business (Electronic Business)
 The work preformed by an organization usingThe work preformed by an organization using
electronic linkages to its key constituencieselectronic linkages to its key constituencies
 E-commerce: the sales and marketing aspect of an e-E-commerce: the sales and marketing aspect of an e-
businessbusiness
• Categories of E-BusinessesCategories of E-Businesses
 E-business enhanced organizationE-business enhanced organization
 E-business enabled organizationE-business enabled organization
 Total e-business organizationTotal e-business organization

Exhibit 2–9Exhibit 2–9 Categories of E-Business InvolvementCategories of E-Business Involvement

• Learning OrganizationLearning Organization
 An organization that has developed the capacity toAn organization that has developed the capacity to
continuously learn, adapt, and change.continuously learn, adapt, and change.
• Knowledge ManagementKnowledge Management
 The cultivation of a learning culture whereThe cultivation of a learning culture where
organizational members systematically gather andorganizational members systematically gather and
share knowledge with others in order to achieveshare knowledge with others in order to achieve
better performance.better performance.

Exhibit 2–10Exhibit 2–10 Learning Organization versus Traditional OrganizationLearning Organization versus Traditional Organization

• Quality ManagementQuality Management
 A philosophy of management driven by continualA philosophy of management driven by continual
improvement in the quality of work processes andimprovement in the quality of work processes and
responding to customer needs and expectationsresponding to customer needs and expectations
 Inspired by the total quality management (TQM) ideasInspired by the total quality management (TQM) ideas
of Deming and Juranof Deming and Juran
 Quality is not directly related to costQuality is not directly related to cost
 Poor quality results in lower productivityPoor quality results in lower productivity

Exhibit 2–11Exhibit 2–11 What is Quality Management?What is Quality Management?
Intense focus on the customer.
Concern for continual improvement
Process-focused.
Improvement in the quality of everything.
Accurate measurement.
Empowerment of employees.

• division of labor (or jobdivision of labor (or job
specialization)specialization)
• Industrial RevolutionIndustrial Revolution
• scientific managementscientific management
• therbligstherbligs
• general administrative theorygeneral administrative theory
• principles of managementprinciples of management
• bureaucracybureaucracy
• quantitative approachquantitative approach
• organizational behavior (OB)organizational behavior (OB)
• Hawthorne StudiesHawthorne Studies
• systemsystem
• closed systemsclosed systems
• open systemsopen systems
• contingency approachcontingency approach
• workforce diversityworkforce diversity
• entrepreneurshipentrepreneurship
• e-business (electronice-business (electronic
business)business)
• e-commerce (electronice-commerce (electronic
commerce)commerce)
• intranetintranet
• learning organizationlearning organization
• knowledge managementknowledge management
• quality managementquality management

ninth edition
STEPHEN P. ROBBINS
MARY COULTER
Organizational CultureOrganizational Culture
and Environment:and Environment:
The ConstraintsThe Constraints
ChapterChapter
33

•The Manager: Omnipotent or SymbolicThe Manager: Omnipotent or Symbolic
• Contrast the action of manager according to theContrast the action of manager according to the
omnipotent and symbolic views.omnipotent and symbolic views.
• Explain the parameters of managerial discretion.Explain the parameters of managerial discretion.
•The Organization’s CultureThe Organization’s Culture
• Describe the seven dimensions of organizational culture.Describe the seven dimensions of organizational culture.
• Discuss the impact of a strong culture on organizationsDiscuss the impact of a strong culture on organizations
and managers.and managers.
• Explain the source of an organization’s culture.Explain the source of an organization’s culture.
• Describe how culture is transmitted to employees.Describe how culture is transmitted to employees.
• Describe how culture affects managers.Describe how culture affects managers.

•Current Organizational Cultural Issues FacingCurrent Organizational Cultural Issues Facing
ManagersManagers
• Describe the characteristics of an ethical culture, anDescribe the characteristics of an ethical culture, an
innovative culture, and a customer-responsive culture.innovative culture, and a customer-responsive culture.
• Discuss why workplace spirituality seems to be anDiscuss why workplace spirituality seems to be an
important concern.important concern.
• Describe the characteristics of a spiritual organization.Describe the characteristics of a spiritual organization.

•The Environment (cont’d)The Environment (cont’d)
• Describe the components of the specific and generalDescribe the components of the specific and general
environments.environments.
• Discuss the two dimensions of environmentalDiscuss the two dimensions of environmental
uncertainty.uncertainty.
• Identify the most common organizational stakeholders.Identify the most common organizational stakeholders.
• Explain the four steps in managing external stakeholderExplain the four steps in managing external stakeholder
relationships.relationships.

The Manager: Omnipotent or Symbolic?The Manager: Omnipotent or Symbolic?
• Omnipotent View of ManagementOmnipotent View of Management
 Managers are directly responsible for anManagers are directly responsible for an
organization’s success or failure.organization’s success or failure.
 The quality of the organization is determined by theThe quality of the organization is determined by the
quality of its managers.quality of its managers.
 Managers are held accountableManagers are held accountable
for an organization’s performancefor an organization’s performance
yet it is difficult to attributeyet it is difficult to attribute
good or poor performancegood or poor performance
directly to their influencedirectly to their influence
on the organization.on the organization.

The Manager: Omnipotent or Symbolic?The Manager: Omnipotent or Symbolic?
• Symbolic View of ManagementSymbolic View of Management
 Much of an organization’s success or failure is due toMuch of an organization’s success or failure is due to
external forces outside of managers’ control.external forces outside of managers’ control.
 The ability of managers to affect outcomes isThe ability of managers to affect outcomes is
influenced and constrained by external factors.influenced and constrained by external factors.
 The economy, customers, governmental policies,The economy, customers, governmental policies,
competitors, industry conditions,competitors, industry conditions,
technology, and the actions oftechnology, and the actions of
previous managersprevious managers
 Managers symbolize control andManagers symbolize control and
influence through their action.influence through their action.

Exhibit 3–1Exhibit 3–1 Parameters of Managerial DiscretionParameters of Managerial Discretion

The Organization’s CultureThe Organization’s Culture
• Organizational CultureOrganizational Culture
 A system of shared meanings and common beliefsA system of shared meanings and common beliefs
held by organizational members that determines, in aheld by organizational members that determines, in a
large degree, how they act towards each other.large degree, how they act towards each other.
 ““The way we do things around here.”The way we do things around here.”
 Values, symbols, rituals, myths, and practicesValues, symbols, rituals, myths, and practices
 Implications:Implications:
 Culture is a perception.Culture is a perception.
 Culture is shared.Culture is shared.
 Culture is descriptive.Culture is descriptive.

Exhibit 3–2Exhibit 3–2 Dimensions of Organizational CultureDimensions of Organizational Culture

Exhibit 3–3Exhibit 3–3 Contrasting Organizational CulturesContrasting Organizational Cultures
DimensionDimension Organization AOrganization A Organization BOrganization B
Attention to DetailAttention to Detail HighHigh LowLow
Outcome OrientationOutcome Orientation LowLow HighHigh
People OrientationPeople Orientation LowLow HighHigh
Team OrientationTeam Orientation LowLow HighHigh
AggressivenessAggressiveness LowLow HighHigh
StabilityStability HighHigh LowLow
Innovation and Risk TakingInnovation and Risk Taking LowLow HighHigh

Strong versus Weak CulturesStrong versus Weak Cultures
• Strong CulturesStrong Cultures
 Are cultures in which key values are deeply held andAre cultures in which key values are deeply held and
widely held.widely held.
 Have a strong influence on organizational members.Have a strong influence on organizational members.
• Factors Influencing the Strength of CultureFactors Influencing the Strength of Culture
 Size of the organizationSize of the organization
 Age of the organizationAge of the organization
 Rate of employee turnoverRate of employee turnover
 Strength of the original cultureStrength of the original culture
 Clarity of cultural values and beliefsClarity of cultural values and beliefs

Benefits of a Strong CultureBenefits of a Strong Culture
• Creates a stronger employee commitment to theCreates a stronger employee commitment to the
organization.organization.
• Aids in the recruitment and socialization of newAids in the recruitment and socialization of new
• Fosters higher organizationalFosters higher organizational
performance by instilling andperformance by instilling and
promoting employee initiative.promoting employee initiative.

Organizational CultureOrganizational Culture
• Sources of Organizational CultureSources of Organizational Culture
 The organization’s founderThe organization’s founder
 Vision and missionVision and mission
 Past practices of the organizationPast practices of the organization
 The way things have been doneThe way things have been done
 The behavior of top managementThe behavior of top management
• Continuation of the Organizational CultureContinuation of the Organizational Culture
 Recruitment of like-minded employees who “fit”Recruitment of like-minded employees who “fit”
 SocializationSocialization of new employees to help them adaptof new employees to help them adapt
to the cultureto the culture

Exhibit 3–4Exhibit 3–4 Strong versus Weak Organizational CulturesStrong versus Weak Organizational Cultures

How Employees Learn CultureHow Employees Learn Culture
• StoriesStories
 Narratives of significant events or actions of people that conveyNarratives of significant events or actions of people that convey
the spirit of the organizationthe spirit of the organization
• RitualsRituals
 Repetitive sequences of activities that express and reinforce theRepetitive sequences of activities that express and reinforce the
values of the organizationvalues of the organization
• Material SymbolsMaterial Symbols
 Physical assets distinguishing the organizationPhysical assets distinguishing the organization
• LanguageLanguage
 Acronyms and jargon of terms, phrases, and word meaningsAcronyms and jargon of terms, phrases, and word meanings
specific to an organizationspecific to an organization

How Culture Affects ManagersHow Culture Affects Managers
• Cultural Constraints on ManagersCultural Constraints on Managers
 Whatever managerial actions the organizationWhatever managerial actions the organization
recognizes as proper or improper on its behalfrecognizes as proper or improper on its behalf
 Whatever organizational activities the organizationWhatever organizational activities the organization
values and encouragesvalues and encourages
 The overall strength or weakness of theThe overall strength or weakness of the
organizational cultureorganizational culture
Simple rule for getting ahead in an organization:Simple rule for getting ahead in an organization:
Find out what the organization rewards and do those things.Find out what the organization rewards and do those things.

Exhibit 3–5Exhibit 3–5 How an Organization’s Culture Is EstablishedHow an Organization’s Culture Is Established
and Maintainedand Maintained

Exhibit 3–6Exhibit 3–6 Managerial Decisions Affected by CultureManagerial Decisions Affected by Culture
• Planning
• The degree of risk that plans should contain
• Whether plans should be developed by individuals or teams
• The degree of environmental scanning in which management
will engage
• Organizing
• How much autonomy should be designed into employees’ jobs
• Whether tasks should be done by individuals or in teams
• The degree to which department managers interact with each
other

Exhibit 3–6Exhibit 3–6 Managerial Decisions Affected by Culture (cont’d)Managerial Decisions Affected by Culture (cont’d)
• Leading
• The degree to which managers are concerned with increasing
employee job satisfaction
• What leadership styles are appropriate
• Whether all disagreements—even constructive ones—should
be eliminated
• Controlling
• Whether to impose external controls or to allow employees to
control their own actions
• What criteria should be emphasized in employee performance
evaluations
• What repercussions will occur from exceeding one’s budget

Organization Culture IssuesOrganization Culture Issues
• Creating an EthicalCreating an Ethical
CultureCulture
 High in risk toleranceHigh in risk tolerance
 Low to moderateLow to moderate
aggressivenessaggressiveness
 Focus on means asFocus on means as
well as outcomeswell as outcomes
• Creating an InnovativeCreating an Innovative
CultureCulture
 Challenge andChallenge and
involvementinvolvement
 FreedomFreedom
 Trust and opennessTrust and openness
 Idea timeIdea time
 Playfulness/humorPlayfulness/humor
 Conflict resolutionConflict resolution
 DebatesDebates
 Risk-takingRisk-taking

Exhibit 3–7Exhibit 3–7 Suggestions for Managers: Creating a More Ethical CultureSuggestions for Managers: Creating a More Ethical Culture
• Be a visible role model.
• Communicate ethical expectations.
• Provide ethics training.
• Visibly reward ethical acts and punish unethical
ones.
• Provide protective mechanisms so employees can
discuss ethical dilemmas and report unethical
behavior without fear.

Organization Culture Issues (cont’d)Organization Culture Issues (cont’d)
• Creating a Customer-Responsive CultureCreating a Customer-Responsive Culture
 Hiring the right type of employees (ones with a strongHiring the right type of employees (ones with a strong
interest in serving customers)interest in serving customers)
 Having few rigid rules, procedures, and regulationsHaving few rigid rules, procedures, and regulations
 Using widespread empowerment of employeesUsing widespread empowerment of employees
 Having good listening skills in relating to customers’Having good listening skills in relating to customers’
messagesmessages
 Providing role clarity to employees to reduceProviding role clarity to employees to reduce
ambiguity and conflict and increase job satisfactionambiguity and conflict and increase job satisfaction
 Having conscientious, caring employees willing toHaving conscientious, caring employees willing to
take initiativetake initiative

Exhibit 3–8Exhibit 3–8 Suggestions for Managers: Creating a More Customer-Suggestions for Managers: Creating a More Customer-
Responsive CultureResponsive Culture
• Hire service-contact people with the personality and attitudes
consistent with customer service—friendliness, enthusiasm,
attentiveness, patience, concern about others, and listening skills.
• Train customer service people continuously by focusing on
improving product knowledge, active listening, showing patience,
and displaying emotions.
• Socialize new service-contact people to the organization’s goals and
values.
• Design customer-service jobs so that employees have as much
control as necessary to satisfy customers.
• Empower service-contact employees with the discretion to make
day-to-day decisions on job-related activities.
• As the leader, convey a customer-focused vision and demonstrate
through decisions and actions the commitment to customers.

Spirituality and Organizational CultureSpirituality and Organizational Culture
•Workplace SpiritualityWorkplace Spirituality
 The recognition that people have an inner life thatThe recognition that people have an inner life that
nourishes and is nourished by meaningful work thatnourishes and is nourished by meaningful work that
takes place in the context of community.takes place in the context of community.
•Characteristics of a Spiritual OrganizationCharacteristics of a Spiritual Organization
 Strong sense of purposeStrong sense of purpose
 Focus on individual developmentFocus on individual development
 Trust and opennessTrust and openness
 Employee empowermentEmployee empowerment
 Toleration of employees’ expressionToleration of employees’ expression

Benefits of SpiritualityBenefits of Spirituality
• Improved employee productivityImproved employee productivity
• Reduction of employee turnoverReduction of employee turnover
• Stronger organizational performanceStronger organizational performance
• Increased creativityIncreased creativity
• Increased employee satisfactionIncreased employee satisfaction
• Increased team performanceIncreased team performance
• Increased organizational performanceIncreased organizational performance

Defining the External EnvironmentDefining the External Environment
• External EnvironmentExternal Environment
 Those factors and forces outside the organization thatThose factors and forces outside the organization that
affect the organization’s performance.affect the organization’s performance.
• Components of the External EnvironmentComponents of the External Environment
 Specific environment:Specific environment: external forces that have aexternal forces that have a
direct and immediate impact on the organization.direct and immediate impact on the organization.
 General environment:General environment: broad economic, socio-broad economic, socio-
cultural, political/legal, demographic, technological,cultural, political/legal, demographic, technological,
and global conditions thatand global conditions that maymay affect the organization.affect the organization.

Exhibit 3–9Exhibit 3–9 The External EnvironmentThe External Environment

Exhibit 3–10Exhibit 3–10 Selected U.S. Legislation Affecting BusinessSelected U.S. Legislation Affecting Business
• Occupational Safety and Health Act of 1970
• Consumer Product Safety Act of 1972
• Equal Employment Opportunity Act of 1972
• Worker Adjustment and Retraining Notification Act of 1988
• Americans with Disabilities Act of 1990
• Civil Rights Act of 1991
• Family and Medical Leave Act of 1993
• Child Safety Protection Act of 1994
• U.S. Economic Espionage Act of 1996
• Electronic Signatures in Global and National Commerce Act of 2000
• Sarbanes-Oxley Act of 2002
• Fair and Accurate Credit Transactions Act of 2003

How the Environment Affects ManagersHow the Environment Affects Managers
• Environmental UncertaintyEnvironmental Uncertainty
 The extent to which managers have knowledge ofThe extent to which managers have knowledge of
and are able to predict change their organization’sand are able to predict change their organization’s
external environment is affected by:external environment is affected by:
 Complexity of the environment:Complexity of the environment: the number of componentsthe number of components
in an organization’s external environment.in an organization’s external environment.
 Degree of change in environmental components:Degree of change in environmental components: howhow
dynamic or stable the external environment is.dynamic or stable the external environment is.

Exhibit 3–11Exhibit 3–11 Environmental Uncertainty MatrixEnvironmental Uncertainty Matrix

Stakeholder RelationshipsStakeholder Relationships
• StakeholdersStakeholders
 Any constituencies in the organization’s environmentAny constituencies in the organization’s environment
that are affected by the organization’s decisions andthat are affected by the organization’s decisions and
actionsactions
• Why Manage Stakeholder Relationships?Why Manage Stakeholder Relationships?
 It can lead to improved organizational performance.It can lead to improved organizational performance.
 It’s the “right” thing to do given the interdependenceIt’s the “right” thing to do given the interdependence
of the organization and its external stakeholders.of the organization and its external stakeholders.

Managing Stakeholder RelationshipsManaging Stakeholder Relationships
1.1. Identify the organization’s externalIdentify the organization’s external
stakeholders.stakeholders.
2.2. Determine the particular interests andDetermine the particular interests and
concerns of the external stakeholders.concerns of the external stakeholders.
3.3. Decide how critical each external stakeholderDecide how critical each external stakeholder
is to the organization.is to the organization.
4.4. Determine how to manage each individualDetermine how to manage each individual
external stakeholder relationship.external stakeholder relationship.

Exhibit 3–12Exhibit 3–12 Organizational StakeholdersOrganizational Stakeholders

• omnipotent view ofomnipotent view of
• symbolic view ofsymbolic view of
• organizational cultureorganizational culture
• strong culturesstrong cultures
• socializationsocialization
• workplace spiritualityworkplace spirituality
• external environmentexternal environment
• specific environmentspecific environment
• general environmentgeneral environment
• environmental uncertaintyenvironmental uncertainty
• environmental complexityenvironmental complexity
• stakeholdersstakeholders

ninth edition
STEPHEN P. ROBBINS
MARY COULTER
Managing in a GlobalManaging in a Global
EnvironmentEnvironment
ChapterChapter
44

What’s Your Global Perspective?What’s Your Global Perspective?
• Define parochialism.Define parochialism.
• Contrast ethnocentric, polycentric, and geocentricContrast ethnocentric, polycentric, and geocentric
attitudes towards global business.attitudes towards global business.
• Explain why it’s important for managers to be sensitive toExplain why it’s important for managers to be sensitive to
global differencesglobal differences
Understanding the Global EnvironmentUnderstanding the Global Environment
• Describe the current status of the European Union.Describe the current status of the European Union.
• Discuss the North American Free Trade Agreement andDiscuss the North American Free Trade Agreement and
other regional trade alliances in Latin America.other regional trade alliances in Latin America.
• Tell about the Association of Southeast Asian Nations.Tell about the Association of Southeast Asian Nations.

Understanding the Global EnvironmentUnderstanding the Global Environment
• Explain the interdependence that globalization involves.Explain the interdependence that globalization involves.
• Discuss the role of the WTO.Discuss the role of the WTO.
Doing Business GloballyDoing Business Globally
• Contrast multinational, multidomestic, global,Contrast multinational, multidomestic, global,
transnational, and born global organizations.transnational, and born global organizations.
• Describe the different ways organizations can goDescribe the different ways organizations can go
international.international.
• Define global sourcing, exporting, importing, licensing,Define global sourcing, exporting, importing, licensing,
and franchising.and franchising.
• Describe global strategic alliances, joint ventures, andDescribe global strategic alliances, joint ventures, and
foreign subsidiaries.foreign subsidiaries.

Managing in a Global Environment (cont’d)Managing in a Global Environment (cont’d)
• Explain how the global legal-political and economicExplain how the global legal-political and economic
environments affect managers.environments affect managers.
• Discuss Hofstede’s five dimensions for assessingDiscuss Hofstede’s five dimensions for assessing
cultures.cultures.
• Explain the nine GLOBE dimensions for assessingExplain the nine GLOBE dimensions for assessing
cultures.cultures.
• Discuss the challenges of doing business globally inDiscuss the challenges of doing business globally in
today’s world.today’s world.

The Global MarketplaceThe Global Marketplace
• Opportunities and ChallengesOpportunities and Challenges
 Coping with the sudden appearance of newCoping with the sudden appearance of new
competitorscompetitors
 Acknowledging cultural, political, and economicAcknowledging cultural, political, and economic
differencesdifferences
 Dealing with increased uncertainty, fear, and anxietyDealing with increased uncertainty, fear, and anxiety
 Adapting to changes in the global environmentAdapting to changes in the global environment
 Avoiding parochialismAvoiding parochialism

What’s Your Global Perspective?What’s Your Global Perspective?
• ParochialismParochialism
 Is viewing the world solely through its own eyes andIs viewing the world solely through its own eyes and
perspectives.perspectives.
 Is not recognizing that others have different ways ofIs not recognizing that others have different ways of
living and working.living and working.
 Is a significant obstacle for managers working in aIs a significant obstacle for managers working in a
global business world.global business world.
 Is falling into the trap of ignoring others’ values andIs falling into the trap of ignoring others’ values and
customs and rigidly applying an attitude of “ours iscustoms and rigidly applying an attitude of “ours is
better than theirs” to foreign cultures.better than theirs” to foreign cultures.

Exhibit 4–1Exhibit 4–1 Key Information About Three Global AttitudesKey Information About Three Global Attitudes

Adopting a Global PerspectiveAdopting a Global Perspective
• Ethnocentric AttitudeEthnocentric Attitude
 The parochialistic belief that the best workThe parochialistic belief that the best work
approaches and practices are those of theapproaches and practices are those of the homehome
country.country.
• Polycentric AttitudePolycentric Attitude
 The view that the managers in theThe view that the managers in the hosthost country knowcountry know
the best work approaches and practices for runningthe best work approaches and practices for running
their business.their business.
• Geocentric AttitudeGeocentric Attitude
 AA world-orientedworld-oriented view that focuses on using the bestview that focuses on using the best
approaches and people from around the globe.approaches and people from around the globe.

Regional Trading AgreementsRegional Trading Agreements
• The European Union (EU)The European Union (EU)
 A unified economic and trade entityA unified economic and trade entity
 Belgium, Denmark, France, Greece, Ireland, Italy,Belgium, Denmark, France, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, Spain, the UnitedLuxembourg, the Netherlands, Portugal, Spain, the United
Kingdom, Germany, Austria, Finland, and SwedenKingdom, Germany, Austria, Finland, and Sweden
 Economic and monetary union (Euro)Economic and monetary union (Euro)
• North American Free Trade Agreement (NAFTA)North American Free Trade Agreement (NAFTA)
 Eliminated barriers to free trade (tariffs, importEliminated barriers to free trade (tariffs, import
licensing requirements, and customs user fees)licensing requirements, and customs user fees)
 United States, Canada, and MexicoUnited States, Canada, and Mexico

Exhibit 4–3Exhibit 4–3 European Union CountriesEuropean Union Countries

Regional Trading Agreements (cont’d)Regional Trading Agreements (cont’d)
• U.S.-Central America Free Trade AgreementU.S.-Central America Free Trade Agreement
(CAFTA)(CAFTA)
• Free Trade Area of the AmericasFree Trade Area of the Americas
• Southern Cone Common Market (Mercosur)Southern Cone Common Market (Mercosur)
• Association of Southeast Asian NationsAssociation of Southeast Asian Nations
(ASEAN)(ASEAN)
 Trading alliance of 10 Southeast Asian nationsTrading alliance of 10 Southeast Asian nations
• African UnionAfrican Union
• South Asian Association for RegionalSouth Asian Association for Regional
Cooperation (SARRC)Cooperation (SARRC)

Exhibit 4–4Exhibit 4–4 ASEAN MembersASEAN Members
Source: Based on J. McClenahen and T. Clark,
“ASEAN at Work,” IW. May 19, 1997, p. 42.

The World Trade Organization (WTO)The World Trade Organization (WTO)
• Evolved from the General Agreement on TariffsEvolved from the General Agreement on Tariffs
and Trade (GATT) in 1995.and Trade (GATT) in 1995.
• Functions as the only global organizationFunctions as the only global organization
dealing with the rules of trade among nations.dealing with the rules of trade among nations.
• Has 149 member nations and 32 observerHas 149 member nations and 32 observer
governments.governments.
• Monitors and promotes world trade.Monitors and promotes world trade.

Different Types of InternationalDifferent Types of International
• Multinational Corporation (MNC)Multinational Corporation (MNC)
 Maintains operations in multiple countries.Maintains operations in multiple countries.
• Multidomestic CorporationMultidomestic Corporation
 Is an MNC that decentralizes management and otherIs an MNC that decentralizes management and other
decisions to the local country.decisions to the local country.
• Global CompanyGlobal Company
 Is an MNC that centralizes its management and otherIs an MNC that centralizes its management and other
decisions in the home country.decisions in the home country.

Different Types of InternationalDifferent Types of International
Organizations (cont’d)Organizations (cont’d)
• Transnational Corporation (BorderlessTransnational Corporation (Borderless
Organization)Organization)
 Is an MNC that has eliminated structural divisions thatIs an MNC that has eliminated structural divisions that
impose artificial geographic barriers and is organizedimpose artificial geographic barriers and is organized
along business lines that reflect a geocentric attitude.along business lines that reflect a geocentric attitude.
• Born Globals/International New Ventures (INVs)Born Globals/International New Ventures (INVs)
 Commit resources upfront (material, people,Commit resources upfront (material, people,
financing) to doing business in more than onefinancing) to doing business in more than one
country.country.

Exhibit 4–5Exhibit 4–5 How Organizations Go GlobalHow Organizations Go Global

Other Forms of GlobalizationOther Forms of Globalization
• Strategic AlliancesStrategic Alliances
 Partnerships between and organization and a foreignPartnerships between and organization and a foreign
company in which both share resources andcompany in which both share resources and
knowledge in developing new products or buildingknowledge in developing new products or building
new production facilities.new production facilities.
• Joint VentureJoint Venture
 A specific type of strategic alliance in which theA specific type of strategic alliance in which the
partners agree to form a separate, independentpartners agree to form a separate, independent
organization for some business purpose.organization for some business purpose.
• Foreign SubsidiaryForeign Subsidiary
 Directly investing in a foreign country by setting up aDirectly investing in a foreign country by setting up a
separate and independent production facility or office.separate and independent production facility or office.

Managing in A Global EnvironmentManaging in A Global Environment
• The Legal EnvironmentThe Legal Environment
 Stability or instability of legal and political systemsStability or instability of legal and political systems
 Legal procedures are established and followedLegal procedures are established and followed
 Fair and honest elections held on a regular basisFair and honest elections held on a regular basis
 Differences in the laws of various nationsDifferences in the laws of various nations
 Effects on business activitiesEffects on business activities
 Effects on delivery of products and servicesEffects on delivery of products and services

The Economic EnvironmentThe Economic Environment
• Economic SystemsEconomic Systems
 Market economyMarket economy
 An economy in which resources are primarily owned andAn economy in which resources are primarily owned and
controlled by the private sector.controlled by the private sector.
 Command economyCommand economy
 An economy in which all economic decisions are planned byAn economy in which all economic decisions are planned by
a central government.a central government.
• Monetary and Financial FactorsMonetary and Financial Factors
 Currency exchange ratesCurrency exchange rates
 Inflation ratesInflation rates
 Diverse tax policiesDiverse tax policies

The Cultural EnvironmentThe Cultural Environment
• National CultureNational Culture
 Is the values and attitudes shared by individuals fromIs the values and attitudes shared by individuals from
a specific country that shape their behavior and theira specific country that shape their behavior and their
beliefs about what is important.beliefs about what is important.
 May have more influence on an organization than theMay have more influence on an organization than the
organization culture.organization culture.

Exhibit 4–6Exhibit 4–6 What Are Americans LikeWhat Are Americans Like
Americans are very informal.
Americans are direct.
Americans are competitive.
Americans are achievers.
Americans are independent and individualistic.
Americans are questioners.
Americans dislike silence.
Americans value punctuality.
Americans value cleanliness.
Sources: Based on M. Ernest (ed.), Predeparture Orientation Handbook: For Foreign Students and Scholars Planning to Study in the
United States (Washington, DC: U.S. Information Agency, Bureau of Cultural Affairs, 1984), pp. 103–05; A. Bennett, “American Culture Is
Often a Puzzle for Foreign Managers in the U.S.,” Wall Street Journal, February 12, 1986, p. 29; “Don’t Think Our Way’s the Only Way,”
The Pryor Report, February 1988, p. 9; and B.J. Wattenberg, “The Attitudes behind American Exceptionalism,” U.S. News & World
Report, August 7, 1989, p. 25.

Hofstede’s Framework for Assessing CulturesHofstede’s Framework for Assessing Cultures
Individualism
versus
Collectivism
Individualism
versus
Collectivism
Power
Distance
Power
Distance
Uncertainty
Avoidance
Uncertainty
Avoidance
Achievement
versus
Nurturing
Achievement
versus
Nurturing
Long-Term
versus
Short-Term
Orientation
Long-Term
versus
Short-Term
Orientation
CultureCulture

Exhibit 4–7Exhibit 4–7 Examples of Hofstede’s Cultural DimensionsExamples of Hofstede’s Cultural Dimensions
Source: Based on G. Hofstede, “Motivation, Leadership, and Organization: Do American
Theories Apply Abroad?” Organizational Dynamics, Summer 1980, pp. 42–63.

Exhibit 4–8Exhibit 4–8 GLOBE HighlightsGLOBE Highlights
Source: M. Javidan and R. J. House, “Cultural Acumen for the Global Manager: Lessons from Project GLOBE,”
Organizational Dynamics, Spring 2001, pp. 289–305. Copyright © 2001. Reprinted with permission from Elsevier.

Global Management in Today’s WorldGlobal Management in Today’s World
• ChallengesChallenges
 Openness associated with globalizationOpenness associated with globalization
 Significant cultural differences (e.g., Americanization)Significant cultural differences (e.g., Americanization)
 Adjusting leadership styles and managementAdjusting leadership styles and management
approachesapproaches
• RisksRisks
 Loss of investments in unstable countriesLoss of investments in unstable countries
 Increased terrorismIncreased terrorism
 Economic interdependenceEconomic interdependence

• parochialismparochialism
• ethnocentric attitudeethnocentric attitude
• polycentric attitudepolycentric attitude
• geocentric attitudegeocentric attitude
• European Union (EU)European Union (EU)
• EuroEuro
• North American Free TradeNorth American Free Trade
Agreement (NAFTA)Agreement (NAFTA)
• Association of Southeast AsianAssociation of Southeast Asian
Nations (ASEAN)Nations (ASEAN)
• World Trade Organization (WTO)World Trade Organization (WTO)
• multinational corporations (MNCs)multinational corporations (MNCs)
• multidomestic corporationmultidomestic corporation
• global companyglobal company
• transnational or borderlesstransnational or borderless
organizationorganization
• born globalsborn globals
• global sourcingglobal sourcing
• exportingexporting
• importingimporting
• licensinglicensing
• franchisingfranchising
• strategic alliancesstrategic alliances
• joint venturejoint venture
• foreign subsidiaryforeign subsidiary
• market economymarket economy
• command economycommand economy
• national culturenational culture
• GLOBEGLOBE
• wikiswikis
• blogsblogs

ninth edition
STEPHEN P. ROBBINS
MARY COULTER
Social ResponsibilitySocial Responsibility
and Managerial Ethicsand Managerial Ethics
ChapterChapter
55

Follow this Learning Outline as you read and study this chapterFollow this Learning Outline as you read and study this chapter..
What is Social Responsibility?What is Social Responsibility?
• Contrast the classical and socioeconomic views of socialContrast the classical and socioeconomic views of social
responsibility.responsibility.
• Discuss the role that stakeholders play in the four stagesDiscuss the role that stakeholders play in the four stages
of social responsibility.of social responsibility.
• Differentiate between social obligation, socialDifferentiate between social obligation, social
responsiveness, and social responsibility.responsiveness, and social responsibility.

Follow this Learning Outline as you read and study this chapterFollow this Learning Outline as you read and study this chapter..
Social Responsibility and Economic PerformanceSocial Responsibility and Economic Performance
• Explain what research studies have shown about theExplain what research studies have shown about the
relationship between an organization’s social involvementrelationship between an organization’s social involvement
and its economic performance.and its economic performance.
• Define social screening.Define social screening.
• Explain what conclusion can be reached regarding socialExplain what conclusion can be reached regarding social
responsibility and economic performance.responsibility and economic performance.

The Greening of ManagementThe Greening of Management
• Describe how organizations can go green.Describe how organizations can go green.
• Relate the approaches to being green to the concepts ofRelate the approaches to being green to the concepts of
social obligation, social responsiveness, and socialsocial obligation, social responsiveness, and social
responsibility.responsibility.
Values-Based ManagementValues-Based Management
• Discuss what purposes shared values serve.Discuss what purposes shared values serve.
• Describe the relationship of values-based management toDescribe the relationship of values-based management to
ethics.ethics.

Managerial EthicsManagerial Ethics
• Discuss the factors that affect ethical and unethicalDiscuss the factors that affect ethical and unethical
behavior.behavior.
• Describe the important roles managers play inDescribe the important roles managers play in
encouraging ethical behavior.encouraging ethical behavior.

Social Responsibility and Ethics in Today’s WorldSocial Responsibility and Ethics in Today’s World
• Explain why ethical leadership is important.Explain why ethical leadership is important.
• Discuss how managers and organizations can protectDiscuss how managers and organizations can protect
employees who raise ethical issues or concerns.employees who raise ethical issues or concerns.
• Explain what role social entrepreneurs play.Explain what role social entrepreneurs play.
• Describe social impact management.Describe social impact management.

What Is Social Responsibility?What Is Social Responsibility?
• The Classical ViewThe Classical View
 Management’s only social responsibility is toManagement’s only social responsibility is to
maximize profits (create a financial return) bymaximize profits (create a financial return) by
operating the business in the best interests of theoperating the business in the best interests of the
stockholders (owners of the corporation).stockholders (owners of the corporation).
 Expending the firm’s resources on doing “social good”Expending the firm’s resources on doing “social good”
unjustifiably increases costs that lower profits to theunjustifiably increases costs that lower profits to the
owners and raises prices to consumers.owners and raises prices to consumers.

What Is Social Responsibility? (cont’d)What Is Social Responsibility? (cont’d)
• The Socioeconomic ViewThe Socioeconomic View
 Management’s social responsibility goes beyondManagement’s social responsibility goes beyond
making profits to include protecting and improvingmaking profits to include protecting and improving
society’s welfare.society’s welfare.
 Corporations are not independent entities responsibleCorporations are not independent entities responsible
only to stockholders.only to stockholders.
 Firms have a moral responsibility to larger society toFirms have a moral responsibility to larger society to
become involved in social, legal, and political issues.become involved in social, legal, and political issues.
 ““To do the right thing”To do the right thing”

Exhibit 5–1Exhibit 5–1 To Whom is Management Responsible?To Whom is Management Responsible?

Exhibit 5–2Exhibit 5–2 Arguments For and Against Social ResponsibilityArguments For and Against Social Responsibility
• ForFor
 Public expectationsPublic expectations
 Long-run profitsLong-run profits
 Ethical obligationEthical obligation
 Public imagePublic image
 Better environmentBetter environment
 Discouragement of furtherDiscouragement of further
governmental regulationgovernmental regulation
 Balance of responsibilityBalance of responsibility
and powerand power
 Stockholder interestsStockholder interests
 Possession of resourcesPossession of resources
 Superiority of preventionSuperiority of prevention
over cureover cure
• AgainstAgainst
 Violation of profitViolation of profit
maximizationmaximization
 Dilution of purposeDilution of purpose
 CostsCosts
 Too much powerToo much power
 Lack of skillsLack of skills
 Lack of accountabilityLack of accountability

From Obligation to Responsiveness toFrom Obligation to Responsiveness to
ResponsibilityResponsibility
• Social ObligationSocial Obligation
 The obligation of a business to meet its economic andThe obligation of a business to meet its economic and
legal responsibilities and nothing more.legal responsibilities and nothing more.
• Social ResponsivenessSocial Responsiveness
 When a firm engages in social actions in response toWhen a firm engages in social actions in response to
some popular social need.some popular social need.
• Social ResponsibilitySocial Responsibility
 A business’s intention, beyond its legal and economicA business’s intention, beyond its legal and economic
obligations, to do the right things and act in ways thatobligations, to do the right things and act in ways that
are good for society.are good for society.

Exhibit 5–3Exhibit 5–3 Social Responsibility versus Social ResponsivenessSocial Responsibility versus Social Responsiveness
Social Responsibility Social Responsiveness
Major consideration Ethical Pragmatic
Focus Ends Means
Emphasis Obligation Responses
Decision framework Long term Medium and short term
Source: Adapted from S.L. Wartick and P.L. Cochran, “The Evolution of the Corporate
Social Performance Model,” Academy of Management Review, October 1985, p. 766.

Does Social Responsibility Pay?Does Social Responsibility Pay?
• Studies appear to show a positive relationshipStudies appear to show a positive relationship
between social involvement and the economicbetween social involvement and the economic
performance of firms.performance of firms.
 Difficulties in defining and measuring “socialDifficulties in defining and measuring “social
responsibility” and “economic performance raiseresponsibility” and “economic performance raise
issues of validity and causation in the studies.issues of validity and causation in the studies.
 Mutual funds using social screening in investmentMutual funds using social screening in investment
decisions slightly outperformed other mutual funds.decisions slightly outperformed other mutual funds.
• A general conclusion is that a firm’s socialA general conclusion is that a firm’s social
actions do not harm its long-term performance.actions do not harm its long-term performance.

Exhibit 5–4Exhibit 5–4 Social InvestingSocial Investing
Source: Social Investment Forum Foundation.

The Greening of ManagementThe Greening of Management
• The recognition of the close link between anThe recognition of the close link between an
organization’s decision and activities and itsorganization’s decision and activities and its
impact on the natural environment.impact on the natural environment.
 Global environmental problems facing managers:Global environmental problems facing managers:
 Air, water, and soil pollution from toxic wastesAir, water, and soil pollution from toxic wastes
 Global warming from greenhouse gas emissionsGlobal warming from greenhouse gas emissions
 Natural resource depletionNatural resource depletion

How Organizations Go GreenHow Organizations Go Green
• Legal (or Light Green) ApproachLegal (or Light Green) Approach
 Firms simply do what is legally required by obeying laws, rules,Firms simply do what is legally required by obeying laws, rules,
and regulations willingly and without legal challenge.and regulations willingly and without legal challenge.
• Market ApproachMarket Approach
 Firms respond to the preferences of their customers forFirms respond to the preferences of their customers for
environmentally friendly products.environmentally friendly products.
• Stakeholder ApproachStakeholder Approach
 Firms work to meet the environmental demands of multipleFirms work to meet the environmental demands of multiple
stakeholdersstakeholders——employees, suppliers, and the community.employees, suppliers, and the community.
• Activist ApproachActivist Approach
 Firms look for ways to respect and preserve environment and beFirms look for ways to respect and preserve environment and be
actively socially responsible.actively socially responsible.

Exhibit 5–5Exhibit 5–5 Approaches to Being GreenApproaches to Being Green
Source: Based on R.E. Freeman. J. Pierce, and R. Dodd. Shades of Green:
Business Ethics and the Environment (New York: Oxford University Press, 1995).

Evaluating the Greening of ManagementEvaluating the Greening of Management
• Organizations become “greener” byOrganizations become “greener” by
 Using the Sustainability Reporting Guidelines toUsing the Sustainability Reporting Guidelines to
document “green” actions.document “green” actions.
 Adopting ISO 14001 standards for environmentalAdopting ISO 14001 standards for environmental
 Being named as one of the 100 Most SustainableBeing named as one of the 100 Most Sustainable
Corporations in the World.Corporations in the World.

Values-Based ManagementValues-Based Management
• Values-Based ManagementValues-Based Management
 An approach to managing in which managersAn approach to managing in which managers
establish and uphold an organization’s shared values.establish and uphold an organization’s shared values.
• The Purposes of Shared ValuesThe Purposes of Shared Values
 Guiding managerial decisionsGuiding managerial decisions
 Shaping employee behaviorShaping employee behavior
 Influencing the direction of marketing effortsInfluencing the direction of marketing efforts
 Building team spiritBuilding team spirit
• The Bottom Line on Shared Corporate ValuesThe Bottom Line on Shared Corporate Values
 An organization’s values are reflected in the decisionsAn organization’s values are reflected in the decisions
and actions of its employees.and actions of its employees.

Exhibit 5–6Exhibit 5–6 Purposes of Shared ValuesPurposes of Shared Values

Exhibit 5–7Exhibit 5–7 Survey of StatedSurvey of Stated
Values ofValues of
Percentage of
Core Value Respondents
Customer satisfaction 77%
Ethics/integrity 76%
Accountability 61%
Respect for others 59%
Open communication 51%
Profitability 49%
Teamwork 47%
Innovation/change 47%
Continuous learning 43%
Positive work environment 42%
Diversity 41%
Community service 38%
Trust 37%
Social responsibility 33%
Security/safety 33%
Empowerment 32%
Employee job satisfaction 31%
Have fun 24%
Source: “AMA Corporate Values Survey,” (www.amanet.org), October 30, 2002.

Managerial EthicsManagerial Ethics
• Ethics DefinedEthics Defined
 Principles, values, and beliefs that define what is rightPrinciples, values, and beliefs that define what is right
and wrong behavior.and wrong behavior.

Exhibit 5–8Exhibit 5–8 Factors That Affect Ethical and Unethical BehaviorFactors That Affect Ethical and Unethical Behavior

Factors That Affect Employee EthicsFactors That Affect Employee Ethics
• Moral DevelopmentMoral Development
 A measure of independence from outside influencesA measure of independence from outside influences
 Levels of Individual Moral DevelopmentLevels of Individual Moral Development
– Preconventional levelPreconventional level
– Conventional levelConventional level
– Principled levelPrincipled level
 Stage of moral development interacts with:Stage of moral development interacts with:
 Individual characteristicsIndividual characteristics
 The organization’s structural designThe organization’s structural design
 The organization’s cultureThe organization’s culture
 The intensity of the ethical issueThe intensity of the ethical issue

Exhibit 5–9Exhibit 5–9 Stages of Moral DevelopmentStages of Moral Development
Source: Based on L. Kohlberg, “Moral Stages and Moralization: The Cognitive-
Development Approach,” in T. Lickona (ed.). Moral Development and Behavior: Theory,
Research, and Social Issues (New York: Holt, Rinehart & Winston, 1976), pp. 34–35.

Factors That Affect Employee EthicsFactors That Affect Employee Ethics
(cont’d)(cont’d)
• Moral DevelopmentMoral Development
 Research Conclusions:Research Conclusions:
 People proceed through the stages of moral developmentPeople proceed through the stages of moral development
sequentially.sequentially.
 There is no guarantee of continued moral development.There is no guarantee of continued moral development.
 Most adults are in Stage 4 (“good corporate citizen”).Most adults are in Stage 4 (“good corporate citizen”).

Individual Characteristics AffectingIndividual Characteristics Affecting
Ethical BehaviorsEthical Behaviors
• ValuesValues
 Basic convictions about what is right or wrong on aBasic convictions about what is right or wrong on a
broad range of issuesbroad range of issues

Individual CharacteristicsIndividual Characteristics
• Personality VariablesPersonality Variables
 Ego strengthEgo strength
 A personality measure of the strength of a person’sA personality measure of the strength of a person’s
convictionsconvictions
 Locus of ControlLocus of Control
 A personality attribute that measures the degree to whichA personality attribute that measures the degree to which
people believe they control their own life.people believe they control their own life.
 Internal locus:Internal locus: the belief that you control your destiny.the belief that you control your destiny.
 External locus:External locus: the belief that what happens to you is due tothe belief that what happens to you is due to
luck or chance.luck or chance.

Other VariablesOther Variables
• Structural VariablesStructural Variables
 Organizational characteristics and mechanisms thatOrganizational characteristics and mechanisms that
guide and influence individual ethics:guide and influence individual ethics:
 Performance appraisal systemsPerformance appraisal systems
 Reward allocation systemsReward allocation systems
 Behaviors (ethical) of managersBehaviors (ethical) of managers
• An Organization’s CultureAn Organization’s Culture
• Intensity of the Ethical IssueIntensity of the Ethical Issue

Exhibit 5–10Exhibit 5–10 Determinants of Issue IntensityDeterminants of Issue Intensity

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