Chap 4. Environment, Innovation, and Sustainability môn Principle of Management | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

Chap 4. Environment, Innovation, and Sustainability
1. The general or macro economy
- The general or macro environment – all of the background conditions in the external
environment of the organization, including:
Economic: health of the economy
Economic environment: economic growth, unemployment rate, disposable income
Legal-political: philosophy / objectives of political party running the gov
Legal political environment: laws and regulations, business forms, political trends
Socio-cultural: norms, customs, social values
Socio-cultural environment: population demographics, educational system, health/nutrition value
Technological: development and availability of technology
Technological environment: IT systems / infrastructure, broadband internet access
Natural: nature and conditions of environment
Natural environment: “green” values, recycling infrastructure + Economic conditions:
Overal health of economy in terms of financial market, inflation, income levels, and job outlook
Offshoring – outsourcing of jobs to foreign locations
Reshoring – return of job from foreign locations as companies establish new domestic operations + Legal-political conditions:
Laws and regulations, gov policies, and the objecitves of political parties
Vary from 1 country to the next
Internet censorship – deliberate blackage and denial of public access to
information posted on the internet + Sociocultural conditions:
Diversity issues relating to educational opportunity, access to technology, housing / job options
Norms, customs, demographics, and societal values
General cohorts – people born within a few years of another and who experience
somewhat similar life events during their formative years + Technological conditions:
Social media, features and “apps” on smartphones
Brings both opportunities and problems Work-life balance
+ Natural environment conditions:
Nuclear plant failure, oil spill, hurricane
“carbon neural”, “green”, “sustainability”
Sustainable business – meets both the needs of customers and protects the natural environment
2. The specific or task environment
- The specfic (task) environment – actual organizations, groups, and persons with whom
an organization interacts and conducts business: - Competitive advantage:
+ a core competency that clearly sets an organization apart from compertitors and
gives it an advantage over them in the marketplace
+ companies may achieve competitive advantage in many ways, including: costs, quality, delivery, flexibility
4. Environment and Sustainability
- Sustainability – commitment to protect the rights of present and future generations as
co-stakeholers of present-day natural resources
 emphasize how we use resources
today influence longer term or other generations in future
- Environmental capital – natural resources used to sustain life and produce goods and
services for society: land, atmosphere, water, minerals
- Triple bottom line: accesses the economic, social and environmental performance of
organizations – 3 P’s of organizational performance Profit PlanetPeople
Chap 5. Global Management and Cultural Diversity
1. Management and Globalization
- Globalization – the growing interdependence of the world’s economics, cultures, and
populations, brought about by cross-border trade in goods and services, technology and
flows of investment, people, and information
- Global management – managing in oeganizations with business interests in more than 1 country
- Global manager is culturally aware and informed on international affairs (how they
issue opportunities, challenging among countries)
- International business – conducting for-profit transactions of goods and services across national boundaries
- Reasons why business go global: ProfitsSuppliers CustomersCapitalLaborRisk
-Market entry strategies – involve the sale of goods or services to foreign markets but
do not require expensive investment (don’t need to install, to set up a factory / a new
company in a foreign industry)
 it just sell or buy goods and services with foreign coutry
-Types of market entry strategies:
+ Global sourcing: the process of purchasing materials or services around the world for local use/domestic use VD: VinFast
+ Exporting: selling locally made products in foreign markets VD: VN exports rice,
+ Importing: selling foreign-made product and selling them domestically
VD: electronic devices used in Vietnam are imported
+ Licensing agreement: one firm pays fee for rights to make or sell another company’s products VD: Bitis, An Phuoc
+ Franchising: a fee is paid for rights to use another firm’s name and operating methods VD: Lotteria, KFC Frachising Licensing
Chuẩn qui trình thống nhất được áp Chỉ chú trọng đến việc bán được càng
dụng để đảm bảo chất lượng đầu ra đồng nhiều sản phẩm càng tốt đều
Không chú trọng chất lượng
Hướng đến kiểm soát chất lượng
-Insourcing refers to local job creation that results from foreign direct investment (FDI) + Types of insourcing:
Joint ventures (công ty liên doanh): operate in a foreign country through co-
ownership by foreign and local partners
 a foreign organization and a local
organization combine together, they set up a new business
Strategic alliances (liên minh chiến lược): a partnership in which foreign and
domestic firms share resources and knowledge for mutual gains  a form of combination
Foreign subsidiaries: local operation completely owned by a foreign firm  is an opposite to joint ventures
VD: Unilever is a foreign subsidiary
+ Criteria for choosing a joint venture partner:
Familiarity with your firm’s major business Strong local workforce
Future expansion possibilities Values its customers
Strong local market for partner’s own products Good profit potential Sound financial standing
-Global business environments: + Legal and political systems:
Differing laws and practices regarding: business ownership, foreign currency
exchange, protection of intellectual property rights Counterfeit merchandise
Political risk – potential loss in value of a foreign investment due to instability
and political changes in the host country
Political risk analysis – forecast political disruptions that threaten the value of a foreign investment
+ Trade agreements and trade barriers:
World trade organization: most favored nation status, tariffs, nontariff barriers, protectionism
 because different countries may have agreements that facilitate the business or they
have regulations that oppose or limit the success of a business 2. Global business - Types of global business:
+ Global corporation: MNE (multinational enterprise) or MNC (multinational
corporation) with extensive business operations in more than 1 foreign country
+ Transitional corporation: a global corporation that operates worldwide on a borderless basis
-Ethical challeges for global business:
+ Corruption: limits the performance of organization because a foreign company has
to pay under the table for the government, for the rules in that country to do business + Child labor and sweatshops:
Child labor – full time employment of children for work otherwise done by adults some organizations use  children because of low cost
Sweatshops – employ workers at very low wages for long hours in poor working conditions
 Child labor or sweatshops will emphasize on the profit of the firm but do they
sacrifice the second P – People
Chap 8. Planning Processes and Techniques
1. Why and How managers plan
- Planning – the process of setting objectives and determining how to best accomplish
them  we have to identify and set up the goals
- Objectives and goals – identify the specific results or desired outcomes that one intends to achieve
- Plan – a statement of action stepts to be taken in order to accomplish the objectives
5 basic in the planning process:
1. Define your objectives: what we want to achieve ?
2. Determine where you stand vis-à-vis objectives: determine your position, where you
are to the goal identify the gap 
3. Develop premises regarding future conditions
4. Analyze alternatives and make a plan: how many options to achieve your goal 
There are many alternatives, choose the best alternative
5. Implement the plan and evaluate results - Benefits of planning:
+ Improves focus and flexibility
 we know which we should focus on, at the same time we have multitasking to perform
with planning, we choosing a variety of goals + Improves action orientation
 when we know our goals, we can concentrate our action and activity
+ Improves coordination and control
 team members can coordinate to accomplish the goals + Improves team management
 we know when is the deadline to accomplish the goal
2. Types of Plans used by managers - Types of plans:
+ Long-term plans look 3 or more years into the future
+ Short-term plans typically cover 1 year or less
+ Strategic plans – set board, comprehensive, and long-term action directions for the entire organization
Vision – clarifies the purpose or mission of the organization and what it hopes to be in the future
 Stratigic plans ideally set forth the goals and objectives needed to
accomplish the organization’s vision in terms of mission or purpose and what it hopes to be in the future
VD: Google’s vision statement is “to provide access to the world’s information in 1 click”
+ Tactical plan – helps to implement all or parts of the strategic plan
 Tactical plans in business often take the form of functional plans – indicate
how different operations within the organization will help accomplish the overall strategy, including:
Production plans – focus on production
Financial plans – focus on finance Facilities plans Logistic plans Marketing plans Human resources plans
+ Operational plans – identify short-term activities to implement strategic plans,
including both standing plans like policies and procedures that are used over and
over again, and single-use plans like budgets that apply to 1 specific task or time period
Policies are standing plans that communicate guidelines for decisions
Procedures are rules describing actions that are to be taken in specific situations
Budgets are single-use plans that commit resources for specific time
periods to activities, projects, or programs
A zero-based budget allocates resources as if each budget were brand new.
In zero-based budgeting there is no guarantee that any past funding will be
renewed; all proposals – old and new, must compete for available funds at
the start of each new budget cycle
3. Planning Tools and Techniques
- Forecasting – attempts to predict the future based on qualitative forecasting, which uses
expert opinion or involving quantitative forecasting, which uses mathematical models
and statical analyses of historical data and surveys - Contingency planning:
+ identify alternative courses of action to take when things go wrong
+ contingency plans contain “trigger point” to indicate when to activate preselected alternatives
+ contingency plans anticipate changing conditions
-Scenerio planning – a long-term version of contingency planning:
+ Identifying alternative futre scenarios
+ Plans made for each future scenario
+ Increases organization’s flexibility and preparation for future shocks
-Benchmarking – uses external and internal comparisions to plan for future improvements:
+ adopting best practices: things people and organizations do that help them achieve superior performance
+ staff planners assit in all steps of the planning process
4. Implementing plans to achieve results - Goal setting:
+ Great goals tend to have these 5 characteristics:
1. Specific – clearly targeted key results and outcomes to be accomplished
2. Timely – linked to specific timetable and “due dates”
3. Measurable – described so results can be measured without ambiguity
4. Challenging – include a stretch factor that moves toward real gains
5. Attainable – although challenging, realistic and possible to achieve -Goal allignment
+ Goal allignment between team leader and team member
Jointly plan: set objectives, set standards, choose actions
Individually set: perform tasks (member), provide support (leader)
Jointly control: review results, discuss implications, renew cycle
-Participation and Involvement:
+ Participatory planning includes in all planning steps the people who will be affected
by the plans and asked to help implement them:
Unlocks the motivational potential of goal setting
Management by objectives (MBO) promotes participation
When participation is not possible, workers will respond positively if
supervisory trust and support exist
Chap 9. Control Processes and Systems 1. Managerial control - Controlling:
+ The process of measuring performance and taking corrective action to ensure desired results
+ Ensures that the right things happen in the right way, at the right time
We measure performance and we take action to correct the mistake if sth wrong happens -Types of controls: + Feedforward controls:
Employed before a work activity begins
Ensures that: objective are clear, proper directions are established, right resources are available
Goal is to solve the problems before they occur
We predict, anticipate the consequence that is more likely to happen in the future
and prevent the problems that may happen + Concurrent controls:
Focus on what happens during work process
We exercise or apply concurrent controls during the work process
Monitor ongoing operations to make sure they are being done according to the plan
Goal is to solve problems as they occur + Feedback controls
Take place after work is completed (when we finish our goal, or we accomplish the objectives)
Focus on quality of end results
Goal is to solve problems after they occur and prevent future ones
We can recognise what we did well and what we did not, we have experience and
then can have improvement for the next similar projects
-Internal and External control:
+ Internal control: allows motivated individuals and groups to exercise self-discipline in filling job expectations
+ External control: occurs through personal supervision and the use of formal administrative systems
+ Self – control: internal control that occurs through self-discipline in fulfilling work
and personal goals andresponsibilities
The ability of individuals or a group or an organization to control their work and
their goals without the intervention from outsiders
+ Bureaucratic control: influences behavior through authority, policies, procedures,
job descriptions, budgets, and day-to-day supervision
+ Clan control: influences behavior through norms and expectations set by the organizational culture
Organiztion influences member’s behavior through norms and expectations
+ Market control: influence of market competition on the behavior of organizations and their members 2. The control process
- 4 steps in the control process
+ Step 1: Establish performance objectives and standards
Performance objectives – identify key results that one wants to accomplish
Once these key results are identified, standards can be set to measure their accomplishment:
oOutput standards – measure performance results in terms of quantity, quality, cost or time
oInput standards – measure effort in terms of amount of work expended in task performance
+ Step 2: Measure actual performance
Where output standards and input standards are used to carefully document results
Goal is accurate measurement of actual performance results and/or performance efforts
Must identify significant differences between actual results and original plan
Effective control requires measurement
+ Step 3: Compare actual performance with objectives and standards
Control equation: Need for action = Desired performance – Actual performance Comparison methods:
oHistorical comparisons – where past experiences become the baseline for evaluating current performance oEngineering comparisons
oRelative comparisons – benchmark performance against that being
achieved by other people, work units or organizations
+ Step 4: Take necessary action
Taking action when a discrepancy exists between desired and actual performance Management by exception:
oGiving attention to situation showing the greatest need for action
oTypes of exceptions: problem situation – where actual performance is less than the desired level
performance turns out higher than what was desired
3. Control tools and techniques
- Project management – overall planning, super vision and control of projects - Inventory control
+ The goal of inventory control is to ensure that inventory is only big enough to meet immediate needs
+ Economic order quantity method – places new orders when inventory levels fall to predetermined points
+ Just-in-tim scheduling – routes materials to work stations just in time for use 
if we import the goods or the inventory so early or too late, it also incures the cost
VD: Wal-mart controls the inventory so successfully -Financial controls:
+ Some of basic financial ratios:
Liquidity – the ability to generate cash to pay bills
VD: sell stock, sell real estate
Leverage – the ability to earn more in returns than the cost of debt  we use
the margin or we borrow from an organization
Asset management – the ability to use resources efficiently and operate at minimum cost
Profitability – the ability to earn revenues greater than costs
 refers to profit an organization can earn: Profit = Revenue – Cost
Chap 11. Organizational Structures and Designs 1.
Organizing as a management function
- Organizing is the process by which we assign tasks to people in our organization or our
team and allow the resources to them so that they can complete the goal of the
organization (resources are about time, money, equipment, tool, human resources-many
kinds of resources) And as a manager, we need to coordinate the activities. - Organization structure: + Formal structure
An organization chart is a diagram describing the responding relationships and the
formal arrangement of work positions within an organization. It includes: oThe division of work
How they divide the function, the work in the organization. oSuper relationships
Who should report to whom, who is the manager, and who is subordinate?
Ex: the one at the bottom should report to the one who is at the higher level. oCommunicate channels
Supervisory relationships tell us the communication channels, there are too many channels from up and down oMajor subunits
We know how many departments, divisions, or offices are in an organization. oLevels of management
Ex: Chairman, G.M (general manager), and then other kinds of managers + Informal structure
The set of unofficial relationships between organization members
We know who talks and interacts with whom, regardless of their formal titles and relationships.
No organization can be fully understood without gaining insight into the informal
structures as well as the formal ones.
Social network analysis (a tool)-identifies informal structures and social
relationships in the organization.
Potential advantages of informal structures:
oHelping people accomplish their work
oOvercoming limits of formal structure
oGaining access to interpersonal networks oInformal learning.
+ Traditional organization structures Departmentalization
oGroups people with jobs into work units of formal teams.
oThese formal teams are linked to create 3 major types of traditional
organizational structures: functional structure, divisional structure, matrix structure 2. TR
ADITIONAL ORGANIZATION STRUCTURES -Functional Structures
+ People with similar skills and performing similar tasks are grouped into formal work units
This kind of organization organizes the task or groups people by function
Ex: Marketing department human resource department,... is kind of functional structure
+ Members work in their functional areas of expertise
Ex: People who are in the chart of marketing will work in the division that called the marketing department + Are not limited to business
+ Work well for small organizations producing few products or services
+ Potential advantages of functional structures Economics of scale
We can minimize the number of staff because we group people who are experts in
one specific field area in the same department-we can reduce the number of people
and therefore, we can reduce the labor east.
Task assignments consistent with expertise and training
They are trained about that subject, they are trained about that business area, they are the expert.
High-quality technical problem-solving
Ex: People who work in marketing, they have trained on that already, so they have high-
quality technical problem solving regarding the issues they face
In-depth training and skill development
Clear career path within functions
Ex: In marketing, if you graduate from IU and you are interested in working in
marketing, the entry job you will be marketing officer, then, a few years later, you
accumulate experience, you understand more about the world, you will be promoted and
become supervisor, then you will be promoted to manager and become supervisor, then
you will be promoted to manager, vice president, and president,...
+ Potential disadvantages of functional structures:
Difficulties in pinpointing responsibilities
Functional chimneys problem
Sense of cooperation and common purpose break down
The narrow view of performance objectives
The most common problem with functional structure is that b/c we work in only
one department, we may misunderstand the job of other people in a different
department, usually, it comes with communication problems because of the misunderstanding.
Ex: If you work in the human resource department, you tend to appreciate, to value your
job more than another job, so you bear thinking, a mindset as you are the most important
one and you ignore the importance of other functions. -Divisional structures
With divisional structure, the organization will assign and decide the work based
on the product line, geography, customer segment, or process. Type Focus Example Product Good or service
General Manager, Grocery products, produced Drugs, and toiletries
Geographical Location of activity
President, Asian division, European division Customer Customer or client
Agency Administrator, Problem youth, serviced Senior citizens Process Activities part of the
Catalog sales manager, product same process purchasing, order fulfillment
Ex: Unilever, they have much product, a brand so they assign people who work for the
product line in the same division.
The division will be in the chart of the whole process of the product from
production from marketing, sales,...
+ Group together people who work on the same product or process, serve similar
customers, and/or are allocated in the same area or geographical region
+ Common in complex organizations
+Avoid problems associated with functional structures -Matix structures:
+ Combines functional and divisional structrures to gain advantages of both and minimize disadvantages of each
+ Used in: manufacturing, service industry, professional fields, non-profit sector, multi-national corporations
+ Potential advantages of matrix structures:
Better cooperation across functions Improved dicision making
Increased flexibility in restructuring Better customer service
Better performance accountability
Improved strategic management
+ Potential disadvantages of matrix structures:
Two-boss system is susceptible to power struggles
Two-boss system can create task confusion and conflict in work priorities
Team meetings are time consuming
Team may develop “groupitis”
Increased costs due to adding team leaders to structure
3. Horizontal organization structures - Team structures:
+ Extensively use permanent and temporary teams to solve problems, complete
special projects, and accomplish day-to-day tasks
+ Often use cross-functional teams composed of members from different functional departments
+ Project teams are convened for a specific task or project and disbanded once completed
 Team structure is usually seen in project, when organization develop a new project,
they acquire individual among different departments or divisions
+ Potential advantages of team structures:
Eliminates difficulties with communication and dicision making
Eliminates barriers between operating departments Improved morale
Greater sense of involvement and identification
Increased enthusiasm for work
Improved quality and speed of decision making
+ Potential disadvantages of team structures:
Conflicting loyalties among members
Excessive time spent in meetings
Effective use of time depends on quality of interpersonal relations, group dynamics, and team management -Network structures:
+ Use information technologies to link with networks of outside suppliers and service contractors
+ Own only core components and use strategic alliances or outsourcing to provide other components
Network structure is a kind of structures that use information technology to
connect everyone together. It bases on the application of network, of technology
+ Potential advantages of network structures:
Firms can operate with fewer full-time employees and less complex internal systems
Reduced overhead costs and increased operating efficiency
Permits operations across great distances
+ Potential disadvantages of network structures:
Control and coordination problems may arise from network complexity
Potential loss of control over oursourced activities
Potential lack of loyalty among infrequently used contractors
Excessively aggressive outsourcing can be dangerous -Boundaryless structures
+ Eliminate internal boundaries among subsystems and external boundaries with the external environment
+ A combination of team and network structures, with the addition of “temporariness”