1. Block 1 Introduction to Management and Organizational Behavior

2. Learning Objectives and Exam Type Questions What are the challenges faced by organizations and their managers in the 21st century? What do you understand by Organizational Behavior? Why an understanding of behavior in organizations is critical for members in all types of workplaces?

3. Challenges 21st Century organizations Information Technology Globalization Mergers and Acquisitions Workplace diversity Organizational structure Work-life balance The rate of change Increased competition Increased ethical and social responsibility

4. Challenges Managing human resources Sam Walton ‘People are the key!’ The technology can be purchased and copied, it levels the playing field. The people, on the other hand cannot be copied. Although human bodies may be cloned in the future, their ideas, personalities, motivation, and organization cultural values cannot be copied. Bill Gates, the ultimate “techie” observed: “The inventory, the value of my company, walks out the door every evening.”

5. Workplace changes People will rent their skills People will have coping mechanism against rightsizing, downsizing, upsizing etc Speed and efficiency of people will be considered instead of work hours Internet will transform the workplace People will work for profits and WL balance Customized benefit programs People will feel empowered Boundaries between school and workplace will blur Tech savvy and those who aren’t Paradigm: a new way of thinking

6. People Vs Profits Intel, Microsoft, Motorola, W.L. Gore & Associates, Southwest Airlines, HP, Lincoln Electric and Starbucks pursue people first strategies Competitive edge Motivated workforce: Domino’s example Difference between success and failure People first organizations: value diversity, family friendly, invest in employee T & D, empower employees Southwest Airlines

7. People Vs Profits Politically correct Employees take a back seat when it comes to profits Labor cost minimization strategy Most organizations place profits over people Cost cutting measures to stay competitive Re-engineer, BPO, temps, employee leasing, part time Staff cuts as a first response to problems Lean and mean organizations No permanent employments, variable cost In consistent with global strategies

8. Globalization Borderless world Expansion of business from the country of origin to other countries of the world Strategy to meet needs of customers worldwide Highest value at the lowest cost Challenge to domestic organizations Air travel IT advances Major reasons compelling businesses to become global include access to skilled workforce, lower costs, economies of scale, direct access to new and growing markets, and the ability to customize products to local tastes and styles There are scores of examples of companies doing business globally. Few examples of multi-national corporations (MNCs) are as follow:

9. Globalization McDonald’s opened its first non-US restaurant in Canada in 1967. By 2002, their total sales outside US represented 58 % of their operating income. MacDonald’s has restaurants in over 115 countries and its international expansion is still on the go. McDonald’s organizational capability is also global. For selling Big Macs in Saudi Arabia the organization procures beef patties from Spain, the special sauce from the United States, lettuce from Holland, cheese from New Zealand, pickles from the United States, onions and sesame seeds from Mexico, the bun from Saudi wheat, sugar and oil from Brazil, and the packaging from Germany. Coca-Cola is another example of global business. Coke has operations in more than 200 countries and 70 % of its operating income comes from overseas corporation. It is estimated that 80 % of Coke employees are non-US personnel.

10. Globalization Honda with its Japanese origin manufactures cars in the US and those cars are driven by the Americans. Similarly most Mercedes and BMW cars driven in the United States are now assembled in the United States. Nokia, the cell phone giant from Finland, employees over 1,000 foreign workers in Finland and over 60 per cent of its 53,000 employees are non-Finns working all over the world. Philips, the electronic multinational, employs 83 percent of its workforce outside of its headquarters in Netherlands. The Roche Group, the Swiss pharmaceutical giant, has 88 percent of its workforce outside of Switzerland. IBM, Exxon, and Microsoft are examples of few other multi-national companies which derive more than half of their revenues from overseas business.

11. Information Technology Great impact Industrial Revolution (1780s – 1840s) Railroads that connected places (1840s – 1890s) Electric power that energized the world (1890s – 1930s) And then planes and automobiles that reduced travel time (1930s – 1980s). The latest break through which has a faster and much more pervasive impact is that of Information Technology. “Get wired or get whacked’ IT tools for efficiency and effectiveness (optimal combination of people, software, and equipment, increasing productivity) Banks automation FedEx etc

12. Information Technology Tools (E-business, knowledge management and human capital and intelligence have the biggest impact on the world of business) E-business can be defined as business via internet. B2B, Cisco, Microsoft, Dell, Yahoo, Google, Wal-Mart are few examples of successful organizations involved in intensive use of technology. Wal-Mart has an automated inventory control system. In case inventory level of a particular product goes below a certain point, an e-mail is automatically sent to the supplier. The suppliers are also networked with the client organizations and can make preparations in advance to meet the orders. Via Internet, business to consumer (B2C) sales are on the increase. Amazon books is an example. Customers can visit the company’s website and select a new or an old book with different price options and book the order online. A customer can order a grocery item or even an automobile online and have it delivered at his doorstep.

13. Information Technology Intranets Knowledge Management Tangible Assets Intangible Assets In the coming years, organizations which would respond to their external environments and improve their internal tasks and work procedures have better chances of survival and growth. And their survival and growth would be largely dependent on the adoption of latest information technology tools.

14. Mergers & Acquistions Strategies Increase in market share and profitability Tremendous impact on employees in newly merged organizations Conflicted cultures Chances of failure high

15. Workplace Diversity Differences among people in a group Source of competitive advantage Age, gender, ethnicity and education Age: benefit from young and experienced employees Gender: employment of women on the rise. 50 %. 4 %. Policies and practices to eliminate gender bias and discrimination Ethnicity refers to race or culture. Education: In large organizations highly educated work force is increasing in the same proportion as unqualified. A major challenge for management is to deal with highly educated workforce in a shrinking promotion and de-layered environment vis-à-vis bringing low qualification employees up to speed in knowledge based organizations. All companies will have to educated and train their employees.

16. Organizational Structure Competition Efficiency and effectiveness Intense focus on customer and value addition Leaner and meaner Flatter Learning organization Team culture Empowered employees Network organizations

17. Work-Life Balance Different times Turning down promotions Personal time and family a priority IBM: telecommuters, home offices Flexi timings Day care facilities Old parents care center Vacations & sabbaticals Employee loyalty

18. Rate of change The bear story Pace of change: No 1 challenge Stability a thing of the past Little time for planning change Flexibility and immediate response to the environment Globalization and IT revolution Successful organizations

19. Increased Competition Ray Kroc “if they were drowning, I would put a hose pipe in their mouth” Competition intense due to globalization and IT advancement Price wars Quality wars Maintaining uniqueness Sustained competitive advantage

20. Ethical and Social Responsbility Consumers have more awareness What organizations are doing Need to behave ethically Demonstrate appropriate behavior Responsibility towards employees Responsibility towards share holders Responsibility towards society at large Giving back to the community

21. Organizational Behavior Understanding, predicting and managing human behavior How behavior of individuals affects the performance of the organization Individual perception Sources of motivation Job satisfaction Group behavior Diversity in workplace Conflict management Leadership Politics and power Organizational change Negotiations