Management and the Economy
Chapter 3 Lesson 1
Overview
Management and the changing economy The global marketplace Management and technology
Chapter 3 Lesson 1
Quick Write
What evidence do you see of the global economy around you in your local community?
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Management and the Changing Economy
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Toffler’s Three Waves ofModern Civilization
First Wave ~ Agriculture
As late as the 1890s, about 90 percent of the workforce was involved in farming and related work
Second Wave ~ Industry
Workers left the fields and went to work in places of mass production, job specialization, and lines of authority producing steel, autos, rubber, and industrial equipment
Third Wave ~ Information
Workers moved from the production floor to clerical, technical, and professional jobs
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New Jobs in Knowledge Work
Knowledge workers are workers whose jobs involve getting and using information
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Knowledge Workers
One third of the US workforce Professionals such as nurses, accountants, teachers, lawyers, engineers
Include technologists Professionals who work with their hands and information ~ computer programmers, software designers, systems analysts
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The Rise of Dot-Com Business
The most important technological innovation in business over the past decade has been the rise of the dot-com business
The ability of ordinary customers to do business over the Internet has revolutionized many sectors
Think of people at home in front of their computers, renting movies, booking airline tickets, or scoping out houses for sale hundreds of miles away
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Dot-Com Challenge
Write down as many dot-com businesses as you can in two minutes
The group that identifies the most actual dot-com businesses wins
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The Global Marketplace
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The Global Village
The global village is the world seen as without borders, with goods and services marketed and sold freely between countries
To be effective in this world without borders, managers need to be able to adapt to other people’s cultures, systems, and techniques
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Multinational Corporation
A multinational corporation (MNC) is a corporation with a home base in one country but significant operations in one or more other countries as well
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Transnational Corporation
A transnational corporation (TNC) maintains operations in more than one country at a time and decentralizes decision making in each operation to the local country
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Borderless Organization
A management structure that breaks down artificial geographic barriers
Organize by product line rather than the map
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Three Stages of Globalization
I Respond to orders from international customers
II Decide to sell abroad sending its own sales staff to the target country
hiring foreign agents to represent them
III Launch foreign operations building a factory
designing new products to meet local needs and desires in the target market
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Strategic Alliances
Companies that reach the third stage of launching foreign operations are likely to form a strategic alliance – a partnership in which firms based in two different countries share the cost of developing new products or building new plants
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How Globalization Affects Managers
Cope with suppliers, employees, and customers in different countries and different cultures
See where there are differences and figure out how to communicate or otherwise interact in spite of those differences
Avoid parochialism – the narrow frame of mind typical of people who see the world from only their own perspective
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How Globalization Affects Managers
Learn to appreciate that people in other places have other ways of doing things
Understand the cultural contexts of different countries’ management practices
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Management and Technology
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What is Technology
Technology is equipment, tools, or operating methods that are designed to make work more efficient
Tools that help businesses create and maintain an edge against their competitors
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Examples of Technology
Automated offices
Manufacturing robots
Computer-aided design software
Electronic meetings
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Benefits from Information Technology
Notebook computers, cell phones, fax machines, high-speed modems, organizational intranets, and other forms of IT allow millions of people to work anywhere, anytime
Levels the playing field in many sectors
Small business with a clear focus and a well-designed website can compete against a much bigger company
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Technologies Challenge
Write down as many technologies found in the school as you can in two minutes
The group that identifies the most school-based technologies wins
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E-Organizations
E-commerce is any computer transaction that occurs when data are processed and transmitted over the Internet
About 90 percent of e-commerce sales are actually business-to-business sales: Goodyear tires selling to Ford, for example
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E-Organizations
E-business is a term that encompasses the full breadth of activities included in a successful Internet-based enterprise
Business strategy, communication between and among employees, customers, and suppliers, and collaboration with partners on design and production
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E-OrganizationsThree Underlying Concepts
Internet ~ a network of interconnected computers
Intranet ~ an organization’s private Internet
Extranet ~ an extended intranet
Network the organization uses to connect its remote employees, contractors, and other collaborators
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How Technology Alters a Manager’s Job
Use e-mail, cell phones, fax machines, and other technology to perform the same four basic functions of a manager’s job – planning, organizing, leading, and controlling
Use telecommuting ~ a system that allows employees to work at home on a computer linked to the office
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Technology Challenges for Managers
Communicating with employees in remote locations
Ensuring employees are meeting their work goals when located externally
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Review
Alvin Toffler outlined three waves of modern civilization – agriculture wave (farming), the industrial wave (manufacturing and production), and the information age (technology and service)
Knowledge workers are workers whose jobs involve getting and using information
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Review
The most important technological innovation in business over the past decade has been the rise of the dot-com business – the ability of ordinary customers to do business over the Internet
The global village is the world seen as without borders, with goods and services marketed and sold freely between countries
Chapter 3 Lesson 1
Review
A multinational corporation (MNC) is a corporation with a home base in one country but significant operations in one or more other countries as well
A transnational corporation (TNC) maintains operations in more than one country at a time and decentralizes decision making in each operation to the local country
Chapter 3 Lesson 1
Review
The first stage of globalization for a company is responding to orders from international customers
The second stage of globalization for a company is deciding to sell abroad
The third stage of globalization comes when the company actually launches foreign operations
Chapter 3 Lesson 1
Review
Managers in a global environment have to avoid parochialism – the narrow frame of mind typical of people who see the world from only their own perspective – and learn to appreciate that people in other cultures have other ways of doing things
Technology is equipment, tools, or operating methods that are designed to make work more efficient
Chapter 3 Lesson 1
Review
E-commerce is any computer transaction that occurs when data are processed and transmitted over the Internet
E-business is a term that encompasses the full breadth of activities included in a successful Internet-based enterprise
Chapter 3 Lesson 1
Review
Telecommuting is a system that allows employees to work at home on a computer linked to the office
Communicating with employees in remote locations and ensuring they are meeting their work goals are the two big challenges facing a manager of telecommuters
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Summary
Management and the changing economy The global marketplace Management and technology
Chapter 3 Lesson 1
What’s Next…
Management
and
Society
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