principles of management 01 - 02 fall 2007
TRANSCRIPT
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Principles of Management
Chapter 1
Understanding the Managers Job
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Learning Goals Define management, describe the kinds of
managers found in organizations, and identify
and briefly explain the four basic managementfunctions
Justify the importance of history and theory tomanagement and explain the evolution ofmanagement thought
Discuss contemporary management issues andchallenges
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Index card Name name you would like to be
called
#
#
How many courses you have taken Why??????????????????
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Management Management is a set of activities
directed at an organizationsresources with the aim of achieving organizational goals in
an efficient and effective manner
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Management
Activities include the four
functions of management Planning (and decision making)
Organizing
Leading
Controlling
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Management
Resources include:
Human Financial
Physical
Information
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Management in Organizations
Inputs from the environment
Human resources
Financial resources
Physical resources
Information resources
Planning
and decision
making
Leading
Organizing
Controlling
Goals attained
Efficiently
Effectively
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EfficiencyversusEffectiveness
Source: Van Fleet, David D., Contemporary Management , Second
Edition. Copyright © 1991 by Houghton Mifflin Company. Used with
permissions.
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EFFICIENCY
EFFECTIVENESSEFFECTIVENESS
Waste of Waste of ResourcesResources
Allocates Allocates
and and
ConservesConserves
ResourcesResources Doing things Doing thingsright (effort)right (effort)
Doing Doing the right things (accomplishment)
Efficiency vs. Effectiveness
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K inds of Managers by Level
and Area
Middle managers
Areas of Management
Levels of Management
First-line managers
Top managers
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Important Definitions
Top Managers
Middle Managers First-line Managers
Operative Employees
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Managers In Different Areas of
The Organization Marketing Managers
Financial Managers Operations Managers
Human Resource Managers
Administrative Managers
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The Management ProcessOrganizing
Determining howbest to group
activities andresources
ControllingMonitoring
and correctingongoing activitiesto facilitate goal
attainment
Planning andDecision Making
Setting the organiza-tion¶s goals and
deciding how bestto achieve them
Leading
Motivating membersof the organizationto work in the best
interests of theorganization
Figure 1.2
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The Basic Functions of Management
A Circular ProcessPlanning and Decision Making
Organizing
Leading
Controlling
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Skills and
theManager
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Fundamental Management
Skills Management Skill Mixes at Different
Organizational Levels
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Management: Science or Art? Science of Management some
aspects of management are objective
and can be approached with rationalityand logic
Art of Management some aspectsof management are subjective and arebased on intuition and experience
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The Evolution of the Study of
Management The importance of history and theory
Theory History
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The Historical Context of
Management Management Through the Ages
3000 B.C. 2500 B.C.
A Sumerians F Chinese
B Egyptians
C Babylonians
D Greeks
G Venetians
E Romans
2000 B.C. 1500 B.C. 1000 B.C. 500 B.C. A.D.1500A.D.500 A.D.1000
A Used written rules and regulations for governance
B Used management practices to construct pyramids
C Used extensive set of laws and policies for governance
D Used different governing systems for cities and state
E Used organized structure for communication and control
F Used extensive organization structure for government
agencies and the arts
G Used organization design and planning concepts to
control the seas
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An Integrative Framework
of Management PerspectivesSystems Approach
Recognition of internal
interdependencies
Recognition of environmental influences
Contingency Perspective
Recognition of the situational
nature of management
Response to particular characteristics of situation
Classical
ManagementPerspectives
Methods for
enhancing
efficiency andfacilitating planning,
organizing, and
controlling
Behavioral
ManagementPerspectives
Insights for moti-
vating performance
and understandingindividual behavior,
groups and teams,
and leadership
Quantitative
ManagementPerspectives
Techniques for
improving decision
making, resourceallocation, and
operations
Effective and efficient management
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Classical Management
Perspective Scientific Management
Frederick Taylor
The Gilbreths
Henry Gantt
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Steps in Scientific
Management
Develop a sciencefor each element of
the job to replace old
rule-of-thumb methods
Scientifically selectemployees and then
train them to do the job
as described in step 1
Supervise employees
to make sure they
follow the prescribed
methods for performing
their jobs
Continue to planthe work, but use
workers to get the
work done
21 43
Figure 1.3
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The Classical Management
Perspective
Administrative Management focuses
on managing the total organization Henry Fayol
Lyndal Urwick
Max Weber
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Fayols Guidelines to Effective
Management Practices Division of labor
Authority
Discipline Unity of command
Unity of direction
Subordination of individuals to thecommon good
Renumeration
Centralization
Scalar chain Order
Equity
Stability Initiative
Esprit de corps
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Webers Theory of
Bureaucracy
Division of labor
Reliance on rules and regulations Hierarchy of authority
Employment based on expertise
Inflexible Rigid
Impersonal
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The Classical Management
Perspective Contributions
Laid the foundation for management theory
Identified key processes, functions, and skills of managers still important today Made management a valid subject of scientific inquiry
Limitations Best used in simple, stable organizations Provided universal procedures that are not
appropriate in all settings Most viewed employees as tools rather than
resources
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The Behavioral Management
Perspective
Placed much more emphasis on individual
attitudes and behaviors and on groupprocesses in organizations.
Recognized the importance of behavioralprocesses in organizations Hugo Munsterberg
Mary Parker Follet
Elton Mayo
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Behavioral Management
Perspective Elton Mayo Hawthorne Studies
Illumination study
Group study
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Human Relations
Movement Grew out of the Hawthorne studies.
Proposed that workers respond primarily
to the social context of work, includingsocial conditioning, group norms,and interpersonal dynamics.
Assumed that the managersconcern for workers would lead toincreased worker satisfaction andimproved worker performance.
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Behavioral Management
Perspective Abraham Maslow
Advanced a theory that employees are
motivated by a hierarchy of needs that theyseek to satisfy.
Douglas McGregor
Proposed Theory X and Theory Y conceptsof managerial beliefs about peopleand work.
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Maslows Hierarchy of Needs Five levels
Physiological hunger, thirst, shelter, sex
Safety security and protection
Social affection, interpersonal relationships
Esteem self-respect, achievement status
Self-actualization achieving full potential
Usually thought in the form of a pyramid
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Maslows Hierarchy of Needs
S A
Esteem Needs
Social Needs
Security Needs
Physiological Needs
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Theory X and Theory Y Theory X Assumptions
People do not like work and try to avoid it.
Managers have to control, direct, coerce,and threaten employees to get them towork toward organizational goals.
People prefer to be directed,to avoid responsibility, andto want security; they havelittle ambition.
S ource: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960
by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
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Theory X and Theory Y Theory Y Assumptions
People do not dislike work; work is a
natural part of their lives.
People are internally motivated to reachobjectives to which they are committed.
People are committed to goals to thedegree that they receive rewards whenthey reach their objectives.
S ource: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960
by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
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Theory X and Theory Y Theory Y Assumptions
People seek both seek responsibility and
accept responsibility under favorableconditions.
People can be innovative in solving
problems. People are bright, but under most
organizational conditions their potentialsare underutilized.
S ource: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960
by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
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Theory X Theory Y
Think of these theories as a continuum
Theory X Theory Y
Employees fall somewhere in between the two ends
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The Behavioral Management
Perspective Contemporary behavioral science in
management emerged because of the
too simplistic descriptions of workbehavior by the human relationstheorists.
Organizational behavior takes a holisticview of behavior, including individual,group, and organization processes
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Organizational Behavior Important topics in organizational
behavior research:
Job satisfaction and job stress
Motivation and leadership
Group dynamics and organizational politics
Interpersonal conflict The structure and design of organizations
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The Behavioral Management
Perspective Contributions
Gave insights into interpersonal processes such as motivationand group dynamics in organizations
Focused managerial attention on these processes Challenged the view of employees as tools and not resources
Limitations The complexity of human behavior makes prediction difficult
Managers may be reluctant to adopt some of the behavioral
concepts Contributions are often not communicated to the practicing
managers in an understandable form
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The Quantitative Management
Perspective
Focuses on decision making, economic
effectiveness, mathematical models, andthe use of computers in organizations
Management science
Operations management
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The Quantitative Management
Perspective Contributions
Developed sophisticated quantitative techniques to assist decision making
Models have increased our awareness of complex organizationalprocesses and have aided in the planning and controllingprocesses
Limitations Cannot fully explain or predict behavior
Mathematical sophistication may come at the expense of otherimportant skills
Models may require unrealistic or unfounded assumptions
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Contemporary Management
Theory The Systems Perspective
A system is an interrelated set of elements
functioning as a whole. An organization as asystem is composed of four elements:
Inputs (material and/or human resources)
Transformation processes (technical andmanagerial processes)
Outputs (products and services)
Feedback (reactions from the environment)
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The Integrated Systems Model
F eedback F eedback
InputsInputsFrom theFrom theenvironment:environment:HumanHuman
MaterialMaterial
FinancialFinancial
InformationInformation
ProcessingProcessingTransformationTransformation
process:process:TechnologyTechnology
Operating systemsOperating systems
AdministrativeAdministrative
systemssystemsControl systemsControl systems
OutputsOutputsInto theInto the
environmentenvironmentProductProduct
ServicesServices
Profit/lossProfit/loss
Employee behavior Employee behavior InformationInformation
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Systems Perspective
Open systems interact with one another
and other environments
Closed systems do not interact with their
environment
Su bsystems recognizes the importance of
su bsystems becau se of their
interdependence
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Systems Perspective Synergy
Subsystems are more successful working
together than working alone. The whole,
working together, is greater than the sum
of its parts.
Entropy
A natural process leading to system decline
which can be avoided through
organizational change and renewal.
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The Universal Perspective vs
The Contingency Perspective The Universal Perspective tries to identify the
one best way to manage an organization,
includes classical, behavioral and quantitativeapproaches
The Contingency Perspective suggests that universal theories cannot be applied to
organizations because each organization isunique what works in one situation may not work in another
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Contemporary Management
Issues & Challenges Downsizing
Diversity and the New Workforce
Information Technology
New Ways of Managing
Globalization Ethics and Social Responsibility
Managing for Quality
Service Economy
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Principles of Management
Chapter 2
The Environment of Organizationsand Managers
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Learning Goals Discuss the environment of organizations and
identify the components of the general, task,and internal environments
Describe the ethical and social environment ofmanagement
Describe the international environment ofmanagement
Discuss the importance and determinants of anorganizations culture
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The Organizations
Environment External Environment
General environment
Task environment
Internal Environment
Conditions and forces within an
organization.
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The Organization and Its
Environments
Owners
Employees
Physical environment
Board of directors
Culture
Competitors
International
dimension
Political-
legal
dimension
Technological
dimension
Sociocultural
dimension
Economic
dimension
Regulators Customers
Strategicpartners
Suppliers
Internal environment
Task environment External
environmentGeneral environment
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Five Dimensions of the
General Environment
Five Dimensions of the
General Environment The economic dimension - the overall health and vitality of
the economic system in which the organization operates
The technological dimension - the methods available forconverting resources into products or services The political-legal dimension - government regulation of
business and the relationship between business and thegovernment
The socio-cultural dimension the general societal/culturalnorms that the organization functions under
The international dimension the extent to which anorganization is involved in or affected by business in othercountries.
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McDonalds General
Environment
McDonald¶s
International Dimension Restaurants in 115
countries About two-thirds of
sales from outside
the United
States
Political-Legal
Dimension Government
food standards
Local zoningclimate
General posture
toward business
regulation
Technological
Dimension
Improved information
technology
More efficient
operating systems
Sociocultural Dimension
Demographic shifts in
number of single adultsand dual-income families
Growing concerns about
health and nutrition
Economic
Dimension
Strong economic
growth Low unemploy-
ment
Low inflation
Internal environment
Task environmentExternal environment
General environment
Fig ur e 3.2
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Five Dimensions of the Task
Environment Specific groups affecting the organization
Competitors seeking the same resources as theorganization.
Customers who acquire an organizations products orresources.
Suppliers that provide resources for the organization.
Regulators (agencies and interest groups) that control,legislate, or influence the organizations policies andpractices.
Strategic partners (allies) who are in a joint venture orpartnership with the organization.
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McDonalds Task Environment
McDonald¶s
Competitors Burger King Wendy¶s Subway
Dairy Queen
Customers Individual
consumers Institutional
customers
Suppliers Coca-Cola Wholesale food
processors Packaging
manufacturers
Strategic Partners Wal-Mart Disney Foreign partners
Regulators Food and Drug Administration
Securities
andExchangeCommission
EnvironmentalProtection Agency
Internal environment
Task environment
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How
OrganizationsandEnvironmentsInteract
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How Business and Government
Influence Each Other
The
Government
Business
The government influences business
through direct and indirect regulation:
Environmental protection legislation
Consumer protection legislation
Employee protection legislation
Securities legislation
The tax codes
Business influences the government
through:
Personal contacts and networks
Lobbying
Political action committees (PACs)
Favors and other influence tactics
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The Internal Environment
Conditions and stakeholder forceswithin an organizationOwnersBoard of Directors
Employees
Physical Work Environment - the actualphysical environment of the organizationand the work that people do.
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Individual Ethics
Ethical Behavior
An individuals personal beliefs regarding
what is right and wrong or good and bad.
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Determinants of Individual
Ethics
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Managerial Ethics
Are the standards of behavior that guideindividual managers in their work
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Managerial
Ethics
Employees Organization
Conflicts of interest
Secrecy and
confidentiality
Honesty
Hiring and firing
Wages and working
conditions
Privacy and respect
Subject to ethical ambiguities
Advertising and promotions
Ordering and purchasing
Bargaining and negotiation
Financial disclosure
Shipping and solicitation
Other business relationships
Economic Agents
Customers
Competitors
Stockholders
Suppliers
Dealers
Unions
Three areas of concern
for managerial ethics
The relationships of
the firm to the
employee.
The employee to the
firm.
The firm to other
economic agents.
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Ethics in OrganizationsEthics in Organizations
Organizational Values
+
Individual Values
=
Managerial Values
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Ethics in Organizations
Managing Ethical BehaviorMust begin with top management
Training on how to handle different ethicaldilemmas.
Code of Ethics
A formal, written statement of the valuesand ethical standards that guides a firmsactions
Individual behavior
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Social Responsibility and
Organizations Social Responsibility
The set of obligations (to behave
responsibly) that an organization has toprotect and enhance the social context inwhich it functions.
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Social Responsibility and
Organizations Areas of Social Responsibility
Stakeholders: customers, employees, and
investors. The natural environment: environmentally
sensitive products, recycling, and publicsafety.
The general social welfare: charitablecontributions, and support for social issuessuch as child labor and human rights.
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Social Responsibility
Ethical Responsibilities
being ethical; doing what is right, just,
and fair; avoiding harm
Voluntary
Responsibilities
being a³good corporate citizen´;
contributing to the
community and quality of life
3-9
Source: Adapted from Archie B. Carroll, ´The Pyramid of Corporate
Social Responsibility: Toward the Moral Management ofOrganizational Stakeholders.µ Business Horizons 34 (July/August 1991): 42.
Legal Responsibilitiesobeying the law (society¶s codification of right
and wrong); playing by the rules of the game
Economic Responsibilities
being profitable
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Arguments For and Against
Social Responsibility
1. Business creates problems and
should therefore help solve them.
2. Corporations are citizens in our
society.
3. Business often has the resources
necessary to solve problems.
4. Business is a partner in our
society, along with the govern-
ment and the general population.
Social
Responsibility
4. The purpose of business in U.S.
society is to generate profit
for owners.
2. Involvement in social programs
gives business too much power .
3. There is potential for conflicts
of interest.
1. Business lacks the expertise to
manage social programs.
Arguments For Social Responsibility Arguments Against Social Responsibility
Figure 2.2
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Approachesto SocialResponsibility
Source: Barney, Jay B. and Ricky W. Griffin, The
Management of Organizations. Copyright © 1992 by
Houghton Mifflin Company. Used with permissions.
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Managing Social Responsibility
Formal Organizational Dimensions Legal Compliance
Extent to which the organization conforms to local,
state, federal, and international laws Ethical Compliance
Extent to which members of the organization followbasic ethical/legal standards of behavior
Philanthropic Giving Awarding of funds or gifts to charities and other
social programs
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Trends in International
BusinessTechnological advances
make this a very small
world
Decreasing Isolation
from ForeignCompetition
U.S. consumer goodsmarkets are open to
overseas competitors.
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Levels of International
Business Activity Exporting
Importing
Licensing
Strategic Alliance and Joint Ventures
Direct Investment
Advantages and Disadvantages of
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Advantages and Disadvantages of Various Approaches to
InternationalizationAppr tI t r ti liz ti Advantages isadvantages
I porting or
porting
1. all ash outlay
2. ittle risk
3. o adaptation necessar y
1. ariff s and taxes
2. igh tr ansportation costs
3. over nment r estrictions
icensing 1. Incr eased pr ofitability
2. xtended pr ofitability
1. Inflexibility
2. elps competitor s
tr ategic Alliance /
Joint entur e
1. uick mar ket entr y
2. Access to materials and technology
1. har ed owner ship (limits
contr ol and pr ofits)
ir ect Investment 1. nhances contr ol
2. xisting infr astr uctur e
1. omplexity
2. r eater economic and
political risk
3. r eater uncertainty
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Environmental Challenges
of International Management
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Controls on International
Trade K ey Concepts
Tariffs are collected on goods shipped across
national boundaries. Quotas are limits placed on the number or value
of goods that can be traded as exports orimports.
Export restraint agreementsare voluntary limits on the volume
or value of goods exported to,
or imported from, another country.
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The Structure of the Global
Economy Economic Communities
Sets of countries that engage in high levels
of trade with each other through theeliminationof trade barriers such as quotas and tariffs.
European Union (EU)
North American Free Trade Agreement (NAFTA)
Latin American Integration Association
Caribbean Common Market
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EuropeanUnion
(EU)MemberNations
Figure 2.3
Source: Lucas,
George H.,Robert P. Bush,
and Larry R.
Gresham,
Retailing .
Copyright ©
1994 by
Houghton
Mifflin
Company. Used
with
permissions.
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The Cultural Environment of
International Buisness Language
The Meaning of Colors
Nonverbal cues
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The Organizations Culture Organization Culture collection of values,
beliefs, behaviors, customs, and attitudes
that characterize a community of people. Determinants of Organization Culture
Organizations founder
Articulate the culture through symbols, stories,heroes, slogans, and ceremonies that embodyand personify the spirit of the organization.
Corporate success strengthens the culture.
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Organization Culture Managing Organization Culture
Understand the current culture to understand
whether to maintain or change it. Reward and promote people
whose behaviors areconsistent with desiredcultural values.
Promote shared experiencesthat bond organizational members
together.
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Organization Culture Changing Organization Culture
Develop a clear idea of what kind of culture you want to create.
Bring in outsiders to important managerial positions.
Adopt new slogans, stories,ceremonies, and purposelybreak with tradition.