Chapter 2 Environment, Diversity and Competitive Advantage

1. Chapter 2Environment, Diversity and Competitive Advantage • Planning Ahead • What is the environment of organization? • What are the challenges of managing diversity? • What is a customer-driven organization? • How is information technology changing the workplace? • Why is organizational learning important? Schermerhorn - Chapter 2

2. External Environments of Organizations • What is Competitive Advantage also called Distinctive Advantage? • Utilization of a core competency that clearly sets an organization apart from its competitors and gives it an advantage over them in the marketplace Schermerhorn - Chapter 2

3. External Environments of Organizations • What is Competitive Advantage/ Distinctive Advantage? An advantage that is not easily copied Or understood by your competitors. • Companies may achieve it in many ways including • products • pricing • customer service • cost efficiency • Quality • Intellectual Capital Schermerhorn - Chapter 2

4. External Environments of Organizations • The General or Societal Environment - all of the background conditions of the organization including: • Economic • Social-cultural • Legal-political • Technological • Natural environment (Weather threats in SE) Schermerhorn - Chapter 2

5. External Environments of Organizations • The Specific Environment. This is called your Industry Environment in strategy - actual organizations, groups, persons with whom an organization must interact in order to survive and prosper • Stakeholders • Customers (Create demand and demand curves) • Suppliers (Part of your SC (Supply Chain) • Competitors (Direct and Indirect Competitors) • Regulators (Each industry has regulations and regulators) • Interest groups should be added. They include community, labor groups, MADD. harmed individuals, society. Schermerhorn - Chapter 2

6. How is diversity managed in a multicultural organization • Characteristics of multicultural organizations: • Pluralism • Structural integration (glass ceiling) • Information network integration • Absence of prejudice and discrimination • Discrimination could be against any group of individuals • Prejudging is pervasive • Minimum inter-group conflict Schermerhorn - Chapter 2

7. How is diversity managed in a multicultural organization? • Organizational subcultures • Cultures based on shared work responsibilities and/or personal characteristics, ways of thinking and artifacts. • Common subcultures include: • Occupational • Functional • Ethnic • Racial • Generational • Gender • Class Schermerhorn - Chapter 2

8. Organizational Culture • A term used to explain an organizations culture. • Cultures include: ways of thinking and acting and all physical manifestations of culture: • Way of thinking: customer comes first, be positive • Way of acting: unfriendly, professional, ethically • Physical manifestations: awards, ceremonies, size of office, etc. (Culture and graduation ceremony) Schermerhorn - Chapter 2

9. How is diversity managed in a multicultural organization? • Diversity can be a source of competitive advantage or disadvantage. Wal-Mart • Diversity leadership approaches: • Affirmative action (Affirmative Action Plan) • Valuing diversity • Managing diversity; • How do you manage diversity in NBA? • How do you manage diversity in a department store? • How do you manage diversity in Big Four Accounting Firm? Schermerhorn - Chapter 2

10. How is diversity managed in a multicultural organization? • Personal challenge of managing diversity: • Accepting the goal of diversity maturity • Organizational challenge of managing diversity: • Changing organizational culture • Changing organizational mission practices Schermerhorn - Chapter 2

11. Customer-Driven Organizations • Customers and Operations Management • Remember organizations have internal as well as external customers. Internal customers coordinate with each other in transformation process • Operations • activities and decisions through which organizations transform resource inputs into product outputs • output of products can be goods or services Schermerhorn - Chapter 2

12. Customer-Driven Organizations • Customer and Quality Operations • International Standards Organizations (ISO), Geneva Switzerland • ISO 9000 certification • provides customers with assurance that a set of solid quality standards and processes are in place • increasingly necessary to compete internationally Schermerhorn - Chapter 2

13. Customer-Driven Organizations • Total Quality Management • Malcolm Baldrige National Quality Award • established in the U.S. in 1987 • benchmark of excellence in quality achievements • criteria include • quality values are incorporated into day-to-day management • workers are trained in quality techniques • products are as good as or better than its competitor • Read article on Malcolm Baldrige http://www.findarticles.com/p/articles/mi_m1038/is_n4_v37/ai_15636464 Schermerhorn - Chapter 2

14. Winners of MBQA (Malcolm Balridge Quality Award) • Given in manufacturing, service and small businesses • Motorola, Ritz Carlton, St. Luke’s of K.C. Note quality in production company, service organization • Motorola went for 10 and then 100 times improvement in quality in two succeeding years Schermerhorn - Chapter 2

15. Eight Guiding Principles of TQM and MBQA • Formulate a vision of Quality • Have Top Management’s Complete Support • Focus on Customer needs (focus groups, internal and external customers) • Use Planning and Implementation for TQM program. (Benchmark) • Train Employees to Use SPC tools (process charts, Six Sigma, simple math) • Empower Employees (Ritz Carlton) • Recognize and Reward Employees (quality culture) • Make Continuous Improvement an Ongoing Process Schermerhorn - Chapter 2

16. Customer-Driven Organizations • Quality and Continuous Improvement • Continuous Improvement • Always looking for new ways to improve upon current performance Schermerhorn - Chapter 2

17. Information Technology Utilization • Information Needs of Organizations • Information • data made useful for decision making • intelligence • public Schermerhorn - Chapter 2

18. Information Technology Utilization • Information Systems and Networks • technology to collect, organize, and distribute data in such a way that they become meaningful as information Schermerhorn - Chapter 2

19. Information Technology Utilization • Information Systems and Networks • Management Information Systems (MIS) • specifically designed to use IT to meet the information needs of managers in daily decision-making Schermerhorn - Chapter 2

20. Information Technology Utilization • Chief Information Officer (CIO) • oversees all aspects of computer, information and telecommunications systems • central role in strategic decision-making Schermerhorn - Chapter 2

21. Information Technology Utilization • Intranets • networks of computers that use special software to allow persons working in various locations of the same organization to share databases and communicate electronically • Enterprise-wide networks • move information quickly and accurately from one point to another within an organization Schermerhorn - Chapter 2

22. Information Technology Utilization • Extranets • Internet networks that use the public Internet to allow communication between the organization and elements in its external environment • Electronic Data Interchange (EDI) allows companies to communicate electronically with one another (hardwired arrangement). Hi speed net has made much of EDI less used. Schermerhorn - Chapter 2

23. Information Technology Utilization • What is a Learning Organization? • a company that is able to continuously change and improve based on the lessons of experience • able to change due to the people, values and systems Schermerhorn - Chapter 2

24. Information Technology Utilization • Organizational Learning • mental models • personal mastery • systems thinking • shared vision • team learning Schermerhorn - Chapter 2

25. Information Technology Utilization • Knowledge Management • processes through which organizations develop, organize and share knowledge to achieve competitive advantage • Chief Knowledge Officer (CKO) • energizes learning processes • manages organizations intellectual assets Schermerhorn - Chapter 2