3 Important Managerial Issues

A photo shows a person holding up a board with the words, Globalization is a trend that’s come and gone!

Daniel Kaesler/Alamy Stock Photo

Learning Outcomes

  1. 3-1 Explain globalization and its impact on organizations.

  2. 3-2 Describe what managers need to know about managing in a global organization.

  3. 3-3 Discuss how society’s expectations are influencing managers and organizations.

  4. 3-4 Discuss the factors that lead to ethical and unethical behavior in organizations.

Management Myth

The reality is that in 2017, more than 85 percent of the 176 countries in the International Monetary Fund increased their global exports.1 While anti-globalization sentiment also has increased, globalization is not disappearing any time soon! It remains an important issue that organizational leaders must recognize and manage.

The current anti-globalization sentiment started over a decade ago during the global financial crisis, a crisis that illustrated and underscored how interconnected the world’s economies actually were. The belief that “when the ship starts sinking, we’re all going down” was a typical reaction felt around the world. However, current data on trade, financial flows, and other global economic measures show that globalization has stayed steady, with some measures showing slight increases.2 Despite the intensifying political rhetoric, free trade—through free trade agreements such as the European Union, the North American Free Trade Agreement (NAFTA), Trans-Pacific Partnership (TPP), and others—has had the positive effect of improving the quality of life for people around the world. In developing countries, millions of people have been lifted out of desperate poverty. In developed countries, consumers have enjoyed cheaper goods and profitable investments. Even the oft-cited drawback of job losses as companies moved production overseas has been offset by lower consumer prices and an increase in the number of new, more efficient businesses. The implications for managers: Globalization is still an important issue that must be recognized and addressed. And political debate over issues such as immigration and nationalism will continue to be important parts of that conversation. Organizational leaders must make wise decisions about the type and extent of globalization pursued. That’s what we’ll be looking at in the first part of this chapter. In the remainder of the chapter, we’ll thoroughly explore the issue of organizations behaving in a socially responsible manner and employees behaving ethically. Just listen to or read news reports from around the world every day and you’ll see why we these are important to discuss! One other thing we need to point out. Not only are these “important” managerial issues, they’re “integrative” managerial issues. Why? Because these issues are woven throughout everything a manager does, and are integrated throughout an organization—no matter the size, type, or location. So let’s dig in!

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