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Objectives 1. Highlight major changes shaping the twenty-first-century workplace. 2. Understand demographics of the new work force. 3. Explain “managing diversity” and why it is important today. 4. Discuss effects on management from the political-legal environment 5. Discuss effects on management from business cycles and globalization 1 Major Changes in the Workplace • • • • • • • Virtual Organizations Just-in-Time Workforce Knowledge Workers e-Coaching and e-Monitoring Increased Diversity Aging Workforce Dynamic Workforce 2 Virtual teams • More communication-intensive – but lose contextual cues/voice • Asynchronous (24/7) • Dispersed • Implications for management: characteristics of virtual team members self discipline, social needs ... 3 JIT Workforce • Contingent, temporary, freelance workers • Essentially outsourcing • Creates a hiring pool - for “permanent” positions • Trust & loyalty an issue? • Implications: which functions should managers outsource - or not outsource? 4 The Social Environment • “The organization is an arena where interests are mobilized” • Dimensions of the social environment – Demographics • Changes in the statistical profiles of population characteristics. – The new social contract • Changes in the employer-employee relationship. – Inequalities • Persistent barriers – Managing diversity • Creating organization cultures that enable all employees to realize their potential. 5 Demographics of the New Workforce • Needed Remedial Education – The shrinking U.S. workforce is increasingly deficient in reading, writing, science, and basic math skills. 6 Skill Level of Three Workforce Categories Adequate Skills Percent of U.S. College Graduates 38% Percent of U.S. Workers 34% Percent of U.S. H.S. Graduates 35% 0% 25% Source: International Adult Literacy Survey Inadequate Skills Excellent Skills 16% 46% 41% 25% 52% 50% 14% 75% 100% 7 Demographics • The workforce will have more Hispanics and older persons in the future. • Labor force growth rate is declining 8 Percent of Baby-Boom and BabyBust Generations by Race/Ethnicity Asian American 4% Hispanic 14% Hispanic 9% Asian American 5% Black 15% Black 11% White 76% Baby Boom b.1946-64 Source: U.S. Bureau of the Census, HRI White 66% Baby Bust b. 1965-83 9 Annual Growth Rate of U.S. Labor Force 3 2.5 2 1.5 1 0.5 0 -0.5 1955 1965 1975 1985 1995 2005 2015 2025 2035 10 Demographics of the New Workforce • Myths About Older Workers (Dispelled) – – – – – – Are not less productive. Do not incur higher benefits costs. Do not have higher absenteeism. Do not have more accidents at work. Are not less willing to learn. Are not inflexible about the hours they are willing to work. 11 A New Social Contract Between Employer and Employee • New Social Contract – Employer-employee relationship will be shorter-term, market-based. • Employees are expected to manage their own careers to increase their long-term value. • Employers are expected to provide the means necessary for continual workforce development . 12 Nagging Inequalities in the Workplace • Under the Glass Ceiling – Women continue to experience a significant gender-wage gap and strong barriers to advancement. – Women are demanding more equitable compensation and workplace opportunities. 13 Women in Top Management 46% of the U.S. Labor Force 48% of Managerial/Professional Specialty Positions 10% of Corporate Officers 9.5% of Board Directors 2.4% of Highest Titles 1.9% of Top Earners Two Fortune 500 CEO Source: Catalyst’s Census of Women Corporate Officers and Top Performers; HRI 14 Minorities in Top Management Minorities 22% Minorities 2% White 78% While minorities make up almost 22 percent of the U.S. workforce... Source: Federal Glass Ceiling Initiative; HRI White 98% ... they represent only 2 percent at Fortune 2000 firms. 15 Nagging Inequalities in the Workplace (cont’d) • Part-Timer Promises and Problems – Contingent workers will comprise a increasing percentage of the workforce. – The advantages of lower wage and benefits costs and the flexibility of a contingent workforce are offset by their negative work attitudes and increased likelihood of quitting. • Continuing Pressure for Equal Opportunity – Women, minorities, and the physically challenged are all expected to press harder for more employment opportunities 16 Managing Diversity • Managing Diversity – The process of creating an organizational culture that provides all employees with opportunities to realize their potential – Requires testing of personal biases, learning • More than EEO – The moral necessity to go beyond EEO and affirmative action – Multiple perspectives improve information and decision making - creating economic value 17 The Political-Legal Environment • Specific Political Strategies – – – – Campaign financing Lobbying Coalition building Indirect lobbying 18 Increased Personal Legal Accountability • Increases in Demands for Accountability – “Cooking the books,” price fixing, and bid rigging are serious white-collar crimes likely to draw stiff penalties and a jail sentence. E.g. Sarbanes-Oxley act 2002 • Political and Legal Implications for Management – Increased use of legal audits • A review of all operations to pinpoint possible legal liabilities or problems. – Use of alternative dispute resolution (ADR) • Settling disputes with less costly methods, including arbitration and mediation. 19 The Economic Environment • The Job Outlook in Today’s Service Economy, Where Education Counts – Service sector job growth in high paying occupations that require at least a bachelor’s degree is twice as fast as that of all other occupations. 20 Some Industries in the Service Sector • Banking, stockbrokerage • Health care • Lodging • Education • IT • Wholesaling and retailing • Insurance • Law • News and entertainment • Education • Transportation (freight and • Architecture passenger) • Consulting 21 The Economic Environment • Coping with Business Cycles – Business cycles • The up and down movement of an economy’s ability to generate wealth. • Business cycles are converging worldwide (global interdependence). 22 REAL GDP (units per time period) The Business Cycle Peak Growth trend Peak Peak Trough Trough TIME 23 GROWTH RATE (percent per year) The Business Cycle in U.S. History 20 Annual growth 15 Recession 10 5 3 0 -5 Zero growth -10 1930 1940 1950 Long-term average growth (3%) 1960 1970 YEAR 1980 1990 2000 24 The Economic Environment • Cycle-sensitive decisions – Timing decisions about appropriate responses to changes in the business cycle is necessary to • reduce the chances that a firm’s assets and resources will be underutilized or wasted in economic downturns. • take advantage of opportunities that will arise during periods of rapid expansion of the economy. 25 The Challenge of a Global Economy • A Single Global Marketplace – Global trade is causing a shift to a single economy (e.g., WTO, EU, NAFTA) – The commercial world is no longer East-West, North-South. • Globalization Is Personal – Working for a foreign-owned company is a growing trend (brand ownership, FDI). – Now a world standard for competitive quality and costs 26 The Technological Environment • Technological innovation – is concerned with tools and ideas that provide practical solutions – generates “Creative Destruction” (Schumpeter) – creates new products and businesses • e.g., e-Business models, disintermediation, biotech 27 The Technological Environment (cont’d) • The Innovation Process – Concept – Product innovation – Process innovation 28 The Technological Environment • Innovation Lag (cont’d) – The time it takes for a new product to be translated into satisfied demand. • Shortening Innovation Lag – Goal setting: creating a sense of urgency and purpose. – Empowerment: pushing decision-making authority down to the level of the decision. – Concurrent engineering: using a team approach to product design involving specialists from all functional areas including research, production, 29 and marketing. Promoting Innovation Through Intrapreneurship • Intrapreneur – An employee who personally shepherds an innovative idea through a large organization. • Fostering Intrapreneurship – Focus on collaboration, innovation and risk taking – Tolerate/learn from mistakes – Requires managerial approaches to creativity individual and group dynamics, organization culture (more on this later!), 30