Lecture The evolution of management thought (6th edition) - Chapter 22: Management thought in a changing world

THE EVOLUTION OF
MANAGEMENT
THOUGHT, 6TH
EDITION

Electronic Resource by:
Regina Greenwood and Julia Teahen


Chapter Twenty-Two
Management Thought in a
Changing World


Obligations and
Opportunities


Individuals, Organizations, and Evolving
Expectations





Ethics
Business and Society

Management Opportunities in a Global
Arena




The Globalization of Business
Managing Across Cultures


Individuals, Organizations, and
Evolving Expectations


Ethics




“The moral ‘oughts’ that sustain a civilized
society.”
Business ethics is an ancient issue:
 St. Thomas Aquinas – the “just price” as the
market price without collusion, fraud, and
coercion
 Johannes Nider (from Chapter 2) and the
quest for ethical business practices in the
early fifteenth century.
 Joseph Wharton, founder of the first
collegiate school of business, was specific
about including ethics in the business school


Business Ethics







Johnson and Johnson’s credo is illustrative of
both ethical and social responsibility issues
(ex: Tylenol crisis).
Agency Theory – considered new, but an old
issue relative to principal-agent relations. As
the ownership of firms was separated from
its management, there was heightened
interest in this notion of agency.
John Shad – donation of $23 million to the
Harvard Graduate School of Business to
teach business ethics.


Business Schools and Ethics
Can business schools make a difference in
society by teaching about ethics? Do we
expect business schools to do this?

Source: />

Business Ethics




Individual and
corporate wrong
doing is typically
followed by
legislation.
Examples:




Securities
Exchange Act of
1934
Sarbanes-Oxley Act
(2002)


Business & Society





Ethics – individual moral conduct
Social Responsibility – expectations by
others about the conduct of the firm
Business leaders are long-standing
patrons of the arts.


Example: Carnegie gave $480 million
during his lifetime


Business & Society




The Federal Revenue Act of 1935 was a
step toward corporate philanthropy—but
it became law during an economic
depression.
A. P. Smith Manufacturing Company vs.
Barlow established the precedent for
modern corporate philanthropy


Morrell Heald regarding Social
Responsibility
See Morrell Heald’s quote about business
people and philanthropy. Do you agree with
this point of view?


Business & Society




Donna Wood’s findings concerning the
Meat Inspection Act (1906) and the Pure
Food and Drug Act (1906) show the
positive role of business leaders.
Howard Bowen provided one definition
of social responsibility and observed
that business firms alone could not solve
the problems of economic life.


Business & Society






Keith Davis suggests an interesting
maxim: “If you mess it up, you clean it
up.”
“Stakeholder” – a term that has come
into use to describe those others who
are affected by business decisions
(originated by the Stanford Research
Institute)
Ansoff’s distinction between
“objectives” and “responsibilities” –
secondary responsibilities cannot be
met unless economic objectives had

Business & Society – Archie
Carroll


Archie Carroll’s
categories of
responsibilities:





Economic primary
Legal –
regulations &
rules
Ethical –
expectations of
how the firm
should conduct
its business

Archie Carroll
Courtesy of Professor Carroll


Business & Society – Archie
Carroll







Dr. Daniel A. Wren

Archie Carroll was a
student in Dan Wren’s
first doctoral course on
management history
at Florida State
University.
Notes from that first
course became the
foundation of Dr.
Carroll’s own
management history
course at the
University of Georgia.
The notes from that
course would also be
the foundation for Dr.
Wren’s first edition of
this book.


Management Opportunities in a
Global Arena: Globalization of

Business






Trade – political strategy
 Example: policy of
mercantilism
Adam Smith advocated a
market economy to
replace mercantilism and
the wars fostered those
policies.
David Ricardo (an early
19th century economist
and advocate of free
trade with each nation) –
finding its comparative 
advantage.

David Ricardo


Trade Relations
How might the scarcity of resources, such as
water and oil, be a factor in trade relations?

Management Opportunities in
a Global Arena






Advances in transportation and
communication technology enabled a
new era for multinational business.
The U.S. was an importer of capital until
about 1914, i.e., the U.S. was a debtor
nation.
The tire and rubber industry is
presented as one example of the
disappearance of U.S. firms in the global
market. Are there other industries?
Where does the U.S. have comparative


What is the Lexus? What is the Olive
Tree?
What do these metaphors mean for business?

Source: />

Managing Across Cultures




“Culture” is hard to
define but is used
here as a set of
beliefs held in
common by a
group of people
about economic,
social, and political
behavior.
Bernard Bass noted
differences
between cultures in
the leadership
literature in Bass and 


Managing Across Cultures


“Hypernorms” are certain rights that are
respected across cultures:
 freedom of movement,
 freedom from torture
 ownership of property
 physical security
 a fair trial
 freedom of speech and association
 subsistence

 minimal education
 political participation
 nondiscriminatory treatment on the basis of
such rights as gender or sex.


Managing Across Cultures
A variety of international groups agreed
upon:

adequate health and safety
standards;
 the rights of all persons to life, liberty,
personal security, and privacy;
 environmental standards regarding
pollution.
 For managers and employees, this
suggests expectations about certain
behaviors that exist across cultures, but
vary within particular cultures.



Managing Across Cultures




Bill England and his colleagues focused
on differences in the meaning of

working.
The “centrality of work” notion affects
how leaders would motivate in different
countries.


Managing Across Cultures


Geert Hofstede (1928 - )
describes cultural
differences in different
countries.
 Individualism vs.
collectivism (group
orientation);
 Power Distance: The level
of preference for
equality or inequality
within groups:
 Uncertainty avoidance: The
preference for risk vs.
structure.
 Masculinity 

GeertHofstede
Courtesy of Prof. Hofstede


U. S. Management Theories

Hofstede maintained that U.S. management
theories are culturally constrained because
management is different in every country. Do


U.S. Foreign Corrupt Practices Act
of 1977





Amended in 1988
Forbade publicly traded U.S. companies
from making illicit payments to officials
of foreign governments or to foreign
political parties, their officials, or
intermediaries for the purpose of
acquiring or maintaining its business
Controversy arises over distinction
between “grease” and bribery