MNG2602-Study-notes.

Study unit 1: Features of Contemporary Organisations and New Management Challenges Variables influencing contemporary organisations to change Variables that have emerged during the last decade: 1. Globalization and the global economy operating without constraints of national boundaries and seeking to compete in any high-potential market on Earth Countries work together to thereby creating a global village:  International transportation and communication has become cheaper  Businesses apply new processes because they possess a highly educated workforce, technological and managerial capabilities and advanced telecomms and transport infrastructure  Markets are becoming more homogeneous  Cost structures vary from country to country – businesses can take advantage of low-cost places  Cross-border learning increases  Financial markets are trading 24hrs a day  Global standards and regulations for trade & commerce, finance, p/s have emerged 2. Technological advances The Information Revolution and other technological advances have had a powerful influence on businesses 3. Radical transformation of the world of work Moved from TQM to an emphasis on a workplace that is re-organized & redesigned to improve performance 4. Increased power and demands of the customer Now choose p/s according to: cost, quality, time, service, innovation & customization Needs of customers determine how organizations carry out operations? 5. The growing importance of intellectual capital and learning The sum and synergy of knowledge, relationships, experience, discoveries, processes, innovations, market presence and influence of an organization on the community 3 categories Structural capital: accumulated knowledge and expertise of the business (copyrights-trademarkspatents) Customer capital: value of relationships with suppliers and customers Human capital: skills and knowledge of the employees New roles and expectations of workers Changed from the Industrial Era → Knowledge Era Industrial Era Knowledge Era Repetitive skills Knowledge to deal with the unexpected Depend on memory and facts Being spontaneous and creative Risk avoidance Risk taking Focus on politics and procedures Collaborating with people The new organization model Global business environment is more complex than the domestic environment and managers must deal with broader sets of environmental forces The key features of the new organisational model are: flatter and leaner, flexile, networked, global and diverse Management challenges Managers of global organizations should have the ability to:  Develop and use global strategic skills  Manage change and transitions  Manage cultural diversity  Communicate effectively  Work with others and in teams 1. Networked Boundaries of the networked organization are permeable or semi-permeable which allows frequent movement of info and people across the boundaries of the organization Businesses form close relationships with suppliers, shares info with them and develops higher levels of independence with them Functional areas that develop p/s are in direct contact with customers Organizations build coalitions to work together with certain stakeholders Organizations also build alliances and cooperative networks with other businesses Management challenges Managers must develop their skills as team members and leaders (understanding team dynamics, developing observation skills and learning how to diagnose problems) 2. Flatter and leaner Organizations will be more flexible to respond quickly Employees are replaced with IS which can be monitored Increased global competition and pressure forces businesses to cut costs by retrenchment Management challenges Managers cannot rely on authority relationships, they must work with individuals, teams and groups who report to different managers, have different priorities and motivated by different incentives 3. Flexibility Organizations need to respond to changes in the environment, changing customer needs, intense competition and needs of a diverse workforce Must be innovative and creative to respond to these changes Management challenges Developing skills in multi-tasking is key if they want to work productively at several tasks Flexible labour practices means employees need to: adapt to change, be innovative, maintain responsibility, balance work and social life 4. Work force diversity Organizations are becoming more heterogeneous in terms of race, gender and ethnicity