MANAGEMENT HISTORY

&
GLOBALIZATION

LEARNING OBJECTIVES
-Learn about the history of principles of management
-Know the context for temporary principles of management
-Understand key global trends
-See how globalization is effecting the management principles and practices

HISTORY

Pre-twentieth century
1.Adam Smith-Economic advantages of
division of labor, breakdown of jobs into
narrower repeated tasks-1700 The Wealth of
Nations
2.The Industrial Revolution?-the advent of
machine power and division of labor-1800World GDP folded by 10 in two centuries.

ANCIENT HISTORY: MANAGEMENT THROUGH THE 1900S

Scientific Management
Frederick Winslow Taylor-1911
(bottom-top) best way
of doing a job
Frank & Lilian Moller Gilberth-1906

ANCIENT HISTORY: MANAGEMENT THROUGH THE 1900S

General Administrative Theorists

Henri Fayol_Fayolism-14 principles of
management (top bottom) Division of
work,authority,dicipline, unity of command..
Max Weber-the form of ideal organization
bureaucracy

World War II-Mathematical solutions to military

problems

Quantative Approach
Statistics
Optimization-Operations research

1945-1960

Organizational Behaviour
Robert Owen
Hugo Munsterberg
Mary Parker Follet
Chester Barnard
Human resource man.

1960
The Systems Approach
Closed Open system(interacts with environment) and
related concepts for systems
Organizations are formed by many interdependent parts,
envision them by systems approach
Organizations are not self-contained but affected by
external environment

1970
The Contingency Approach
Different organizations require different
Ways of management
Organizations recognize and respond to
situational variables as they arise

Current Trends and Issues-1990+

QUALITY MANAGEMENT
E-COMMERCE
WORKFORCE DIVERSITY

ENTREPRENEURSHIP

IS GLOBALIZATION
+ OR -

Definition

A process in which geographic distance becomes

a factor of diminishing importance in the
establishment and maintenance of cross-border
economic,political and socio-cultural relations..

Definition

The growing integration of national economics and

societies,so that no society is isolated or remote
from changes and developments in other
societies.

GLOBALIZATION IS NOT
NEW

For centuries, people and corporations have

invested in enterprises in other countries

WHAT ARE THE DRIVERS

OF GLOBALIZATION

Technology changes

Changes in Investment Regulations 1991- 2001

Advent of capitalism

Since 1950,
volume of world trade has increased by 20 times.

1997 to 1999,
foreign investment nearly doubled, from $468
billion to $827 billion.

Thomas Friedman has said that today

globalization is;
farther, faster, cheaper, and deeper.

PROS OF GLOBALIZATION

With globalization, there is a global market for companies to

trade their products and a wider range of options for people,
to choose from among the products of different nations.

Developing countries benefit a lot from globalization, as

there is a sound flow of money and thus, a decrease in the
currency difference.

To meet the increasing demands that follow globalization,

there is an increase in the production sector. This gives
loads of options to the manufacturers as well.

Competition keeps prices relatively low, and as a result,

inflation is less likely to occur.

PROS OF GLOBALIZATION

The focus is diverted and segregated among all the nations.

No country remains the single power head; instead there are
compartmentalized power sectors. The decisions at higher
levels are meant for the people at large.

Communication among the countries is on the rise, which

allows for better understanding and broader vision.

As communication increases amongst two countries, there is

interchange of cultures as well. We get to know more about
the other's cultural preferences.

As we feed to each other's financial needs, the ecological

imbalance is also meted out. Governments of countries show
concern about each other.

CONS OF GLOBALIZATION

Globalization is causing Europeans to lose their jobs as

work is being outsourced to the Asian countries. The
cost of labor in the Asian countries is low as compared
to other countries.

The high rate of profit for the companies, in Asia, has

resulted in a pressure on the employed Europeans,
who are always under the threat of the business being
outsourced.

Companies are as opening their counterparts in other

countries. This results in transferring the quality of their
product to other countries, thereby increasing the
chances of depreciation in terms of quality.

CONS OF GLOBALIZATION

There are experts who believe that globalization is

the cause for the invasion of communicable
diseases and social degeneration in countries.

The threat that the corporates would rule the world is

on high, as there is a lot of money invested by them.

It is often argued that poor countries are exploited by

the richer countries where the work force is taken
advantage of and low wages are implemented.

GLOBOLIZATION
OR
REGIONALIZATION
Trading Blocs:
European Union
North America Free Trade Agr.
The liberalization of China and India
Trading regions:
Europa
North America
South East Asia

Stages of Globalization for

Organizations

Importing

Exporting

Licence Agreement

Joint Ventures

Acquisition

Developing Own Foreign Operations

Problems of
Globalization

Legal Systems

Infrastructure

Political Instability

Language

National Culture

To overcome the Problems of

Globalization

Correct Form of Presence,

Familarity to Local Beleifs Customs,

Knoweledge of Laws and Regulations,

Open to Changes on Management Style,

Language training and Acclimatisation

REASONS
FOR
GLOBALIZATION

Economies of Scale

Bigger Markets

Cheaper Sources

E-COMMERCE(ebusiness)

Any business transaction whose price or

essential terms were negotiated over on
line system such as internet,extranet
electronic data interchange network or
electronic mail system.

E-commerce can be divided into;

E-commerce can be divided into:

E-tailing or "virtual storefronts" on Web sites with
online catalogs, sometimes gathered into a "virtual
mall"
The gathering and use of demographic data through
Web contacts
Electronic Data Interchange (EDI), the business-tobusiness exchange of data
e-mail and fax and their use as media for reaching
prospects and established customers (for example,
with newsletters)
Business-to-business buying and selling (B2B)

TYPES OF E-COMMERCE

Transactional Site
People who shop online are most familiar with this type of
website. A transactional site may be an electronic storefront
for a brick-and-mortar retailer or a catalog business, (e.g.,
Lands End ), or a manufacturer showroom for those
wishing to sell directly to the public (e.g., Dell Computer ).
Transactional sites conduct full end-to-end transactions
via the website, allowing customers to search for, order, and
pay for products online as well as allowing them to contact
the company for after-sales service. The most sophisticated
sites create efficiencies by integrating the transaction
process with back-office systems such as accounting,
inventory, sales and others (e.g., Amazon ).

E-Commerce

Copyright
2006
Thomson
Business and
Economics.
All rights
reserved.

Exhibit
135

TYPES OF E-COMMERCE

Information Delivery Site

This site generates sales by promoting corporate
awareness rather than facilitating online transactions. Its
function is similar to a brochure, providing information
about the product or service and contact information on
how to proceed with a purchase. Because this site is
often static and doesnt require the software systems
necessary for online transactions, it is less expensive to
design and maintain than the transactional site. An
information delivery site is ideal for companies that
market products and services that cannot be provided
online or goods that cannot be sold online (e.g. Ford ,
Coudert , Caterpillar ).

TYPES OF E-COMMERCE

E-marketplaces
These sites are market-makers: they bring buyers
and sellers together to facilitate transactions.
Participation in a brokerage often provides an
efficient way of finding a customer without the
expense of building a proprietary transactional
website. Types of brokerages include auctions (e.g.
eBay ), virtual malls (http://www.virtualmall.com/ )
and matching services (
http://www.buyusa.gov/matchmaking/us_companie
s_home.html
).

Use these steps as a guide to creating your

website

5execute
orders

3choose
web
host

1-select
domain
name
2register
search
engine

4-web
site
content

Tim Berners-Lee created the

first web browser and World
Wide Web. (Wikipedia)

Use these steps as a guide to creating your

website

1. Select A Domain Name

Selecting a domain name for your company's international website(s) is the first
important decision you'll make and can potentially have significant marketing
implications.
2. Register at Search Engines
Help potential customers find your website by registering with the major search
engines in the countries you wish to target.
3. Choose a Web Host
Find a dependable web hosting service to house your localized website(s). Many
hosting providers offer additional value-added services such as site maintenance,
search registration, site development, etc.
4. Website Content Localize and Internationalize
Target international customers by tailoring your website to local language and cultural
tastes.
5. Execute Orders
Enable your customers a variety of payment options that meet local business
practices and be aware of other considerations when doing international business
such as taxes, shipping, customs duties, and after sales service.

Market Development on the Web

As with brick and mortar enterprises, market development is an essential

ingredient for all of the above models and must be an integral part of a
firm's e-business presence on the Internet. Companies should consider
and evaluate the advantages of advertising online as an extension and
component of their corporate growth strategies and as part of their
international marketing efforts. Advertising messages often appear on
portals or other websites that draw viewers with content (news,
information) and services (such as email, chat, forums, etc.). Companies
may seek to advertise on search engines that attract high traffic volume
(e.g., Yahoo!) or target a specialized demographic (e.g., ivillage ). Some
portals sell favorable link positioning or advertising keyed to particular
search terms in a user query (e.g., Overture). Companies may also
consider using an advertising network that feeds ads to a network of sites,
thereby enabling large marketing campaigns (e.g, Doubleclick). (Note that
all the websites listed above have been internationalized or have local
mirror sites.)

Market Development on the

Web

Direct E-mail
Direct E-mail may be a good way to promote web presence, depending on the market, product, or
service. Direct e-mail is an inexpensive way to reach thousands of potential customers. However,
several countries have legislation prohibiting or restricting unsolicited commercial email
(see the Direct Marketing Association homepage at http://www.the-dma.org/ for more information
on international spam legislation), and certainly any email must not constitute fraud. The Direct
Marketing Association suggests that any email marketing should have:
an honest subject line;
no forged headers or technological deceptions;
the identity of the sender, which includes a "physical" address, and
an opt-out that works and is easy to find and easy to use (although note that some countries may
specify an opt-in approach. Research spam legislation for the country you are targeting.)
Whether you're targeting domestic or international customers, companies should be aware before
choosing direct e-mail as a way to promote web presence of the potential for backlash against
unsolicited e-mails by consumers who feel overwhelmed by the number of such e-mails received.

Use of e-commerce
2000; 20% of internet users in Europe
2003; 40% of internet users in Europe
More and more people,
Wider range of products
Business-to-consumer e-commerce sales in
2011 increased to 690 billion euros ($961 billion),
an increase of close to 20% from a year earlier.

Influence of E-Commerce on
Consumer Behaviour
Better informed
More able to ask for keen price
Less loyal

Problems of ECommerce

E-fraud
Phishing;from 1000 sites in 2004 to
2,6billion in 2005.
Avoid verification of info that has already being
supplied,avoid clicking on links embedded in
email messages,avoid clicking attractive offers
from unknown organisations.
Overpayment Scam;Refuse payments for more
than the selling price.
Chain emails;Do not reply to chain emails,or do
not enter to unknown foreign lotteries