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Synopsis
Globalization is playing a major role in the environment of many firms today. The volume of international trade
has grown significantly, and continues to grow at a very rapid pace. There are four basic reasons for this growth:
(1) communication and transportation have advanced dramatically over the past several decades, (2) businesses
have expanded internationally to increase their markets, (3) firms are moving into international markets to
control costs, especially to reduce labor costs, and (4) many organizations have become international in response
to competition. There are numerous cross-cultural differences and similarities that affect behavior within
organizations.
A second major environmental shift in recent years has been the increased attention devoted to the
concept of diversity. Workforce diversity refers to the important similarities and differences among the
employees of organizations. Unfortunately, many people tend to stereotype others in organizations. Stereotypes
can lead to the even more dangerous process of prejudice toward others. Managers should be cognizant of both
primary and secondary dimensions of diversity, as well as the wide array of benefits to be derived from having a
diverse workforce.
Technology refers to the methods used to create products, including both physical goods and intangible
services. Technological change has become a major driver for other forms of organization change. Moreover, it
also has widespread effects on the behaviors of people inside an organization. Three specific areas of technology
relevant to the study of organizational behavior are the shift toward a servicebased economy, the growing use of
technology for competitive advantage, and mushrooming change in information technology.
While ethics have long been of relevance to businesses, what seems like an epidemic of ethical
breaches in recent years has placed ethics in the mainstream of managerial thought today. One special aspect of
business ethics, corporate governance, has also taken on increased importance. Ethics also increasingly relate to
information technology. A central issue today revolves around the fact that rapid changes in business
relationships, organizational structures, and financial systems pose unsurpassed difficulties in keeping accurate
track of a company’s financial position.
Another significant area of environmental change that is particularly relevant for businesses today
involves new employment relationships. Knowledge workers are those who add value to an organization because
of what they know. How well these employees are managed is seen as a major factor in determining which firms
will be successful in the future. Outsourcing is the practice of hiring other firms to do work previously performed
by the organization itself. It is an increasingly popular strategy because it helps firms focus on their core
activities and avoid getting sidetracked onto secondary activities. However, it grows controversial when the jobs
being outsourced are really being exported to foreign countries in ways that reduce domestic job opportunities.