Contemporary Management Issues


 


The major challenges that managers must overcome in order to become competitive includes (1) globalizing the firm (2) leading a diverse workforce and (3) encouraging positive business ethics. Other issues include the ageism of the workforce and the growing demand for a corporate social responsibility. This paper will discuss the above issues citing the example of Coca Cola and Johnson and Johnson.


Ageing Population


Employment opportunities for individuals are influenced by age. Factors both from inside and outside the organization contributes greatly in the decisions of employers to hire employees. Ageism is one of the factors that lead to discriminatory practices in terms of job employment. Due to the prejudices to an age group particularly of the older workforce, employers tend to refuse hiring them. Indeed, age can be considered as a powerful form of discrimination in the modern society. Age discrimination in the employment are discriminatory practices in personnel decisions which includes, hiring, firing, promotion and mandatory retirement (2006). Thus the assumed characteristics of older workers affect the employer’s decision of employing them. This results to discriminating them on the basis of their age and disregarding their potential and merit.


The importance of experience offered by older employees is undermined by the preoccupation with the youthfulness. The older workers are thus faced with the problem of career progression especially in the time of technological advancements where they are seen as less trainable. With the age norms among companies, older workers are likely to be disadvantaged as compared to their younger counterparts. This can be attributed with the stereotyping of older workers as less productive, less flexible, lacking in physical strength and harder to train ( 2005).  The perception held by employers about older workers hinder the career progression at a certain


Other evidences of discrimination against older workers include the fact that older workers stay unemployed longer than younger ones. Eventually, they just give up looking for a job after a layoff. On the other hand, those who find a subsequent job suffer great earnings loss. Such discrimination arises from stereotypes that older workers are incapable of producing as much as the younger ones do. Moreover, they are stereotyped as resistant to change and untrainable (1999).


Because of this, age diversity in the workplace is encouraged among employers to combat the discrimination on the grounds of age. A mixed-age workforce at all level will allow a wider range of skills and experience that will benefit companies. The experience of older workers along with those starting out will draw greater skills and will bring out the best from them. Lastly, this will have a great impact in promoting economic growth because of the expansion of the labor supply (2006). Social justice will also be fostered as the regulation attacks ageist attitudes and recognizes the individual’s merit rather than focusing on the age prejudices.


Part of Coca Cola’s corporate responsibility to the workplace is its principle of eliminating discrimination in respect of employment and occupation. The company’s policy and statement expressed its commitment to the principles of the United Nations Global compact. This voluntary agreement challenges the business to advance human rights and labor standards of which diversity in the workplace is acknowledged (2007).


The key to the success of Coca Cola is its commitment to diversity. Its system’s work force is as diverse as the consumer it serves. Diversity is found in terms of talent and strategic thinking of its 26,000 associates worldwide as reflected throughout the global business system of the company. The support of the company of opportunities for individuals of every background be it age or race reflects the ongoing commitment to develop its employees, business partners and communities it serves all over the world (1997).


Multi cultural Workforce


            Valuing the diversity of the workforce is a value expected of today’s managers. This in part springs from the process of globalization. Top companies all over the world are composed of ethnic and racial make up in their workforce. They are realizing the importance of creating a workforce as a broad and diversified as the customers they have. The globalization of diverse populations requires the intercultural dialogue from the top management tot manage diverse workforce in all areas of the business. Diversity management is a business strategy that emphasized the productivity, creativity and commitment of the workforce while satisfying the needs of its diverse consumers. Some of the global companies that recognize the diversity in their workforce include Coca Cola and Johnson and Johnson.


            Johnson & Johnson is one of the companies with trust equity. As with many of its company’s shared values, diversity is included throughout Johnson & Johnson’s culture; not only because of it is fair and ethical but because it adds value to customers and employees. the company recognize that diversity is much more than public relations but it has a big impact in the company’s ability tot innovate and deliver products that meets the needs of the diverse and multicultural public.


            The decentralized organization of Johnson & Johnson is diverse in its own right. With 190 autonomous operating units in 51 countries, the company is maintaining a local culture in every workplace. The result is that the environment feels more like of a small company with big impacts and resources that people expects from Johnson & Johnson. It works hard to reflect the broad cultural mix in its hiring practices. Aside from its extensive community programs that support minority education, Johnson & Johnson also supports numerous minority-based professional organizations such as the National Security of Black Engineers, the National Association of Black Accountants, the National Urban League and Able to Work (for individuals with disabilities). Whenever possible, the company lists its career opportunities on association websites it promote employment application from the members.


            Coca Cola’s business system and brands reach about 200 countries, thousands of communities and billions of people all over the world. Because of the extent of its operation, the company understands the value of diversity and makes it the top priority of its business. The key to the company’s success is to make Coca Cola and other brands relevant and desirable to each community. This means having a worldwide team that will represent the consumers and are rich in their diversity of thinking, perspectives, background and culture.


            Diversity is such a fundamental business imperative and the management compensation is linked to the achievement of diversity objectives. The commitment of the company to diversity is manifested throughout the business system. In fact, it has committed billion over the five years to an Empowerment and Entrepreneurship program that is aimed at increasing the employment opportunities for minority and women-owned businesses to become valuable Coca Cola business partners. Part of the empowerment program is also the establishment of a strong corporate social responsibility with a million commitment to support non profit organizations focusing on scholarships for minority youth, neighborhood revitalization programs and community advocacy which provides educational, social and economic opportunities to all people (2001).


            Another unique example of Coca Cola’s commitment to lead diversity management is its Diversity Leadership Development Academy in Atlanta. The program is established with a .5 million grant to the American Institute to manage diversity. The academy was created to provide leaders with the skills and capabilities to advance diversity within their organizations and in the larger community. Finally, Coca cola has been committed to build an organizational culture where each individual is respected and valued for their contributions and are offered the opportunities to grow, develop and make a difference(2001). The key to the success of the organization is the special something contributed by each and every individual.


Globalization


One of the assumptions held about globalization is that the world is becoming a global economy in which the rapid development of transportation and communication makes the territorial frontiers less important. The growing cultural homogeneity is characterized by the major differences between the ‘international’ economy and the ‘global’ economy (1998). According to (1983), technology is one of the powerful forces that drive the homogenization of the market. It allows people even those in isolated places to become attracted with the features of modernity.


Consider the case of Coca Cola which is a globally standardized product sold and welcomed by people everywhere. It has successfully crossed a multitude of national and regional taste preferences but is able to be sold well. Almost everyone everywhere else wants the things they have seen or heard through new technologies. This resulted to the emergence of global market that offers standardized customer products (Levitt, 1983). Another factor is the increasing market demand which encourages the producers to go international.


            Globalization has led to the emergence of a global village in the economy. As a global macroeconomic village, all firms large and small must become competitive across national boundaries. Coca Cola along with McDonald’s is considered to be primary agents of globalization. Yet only Coca Cola is a truly global MNE. It ranked 129th in the Fortune 500 list and has over 205 of its sales across the three parts of the triad: 38.4% in North America, 22.4% in Europe and 24.95 in Asia. Of its sales in Asia, 745 are in Japan but the company attempts to increase its market in Asia (2004).


 The creation of the multinational market raised the issues of coordination in business activities across national markets as well as the issues of integration and the allocation of authority between the home base and its units in other countries. To deal with these complexities, international businesses made each of their national market a separate competitive target that can be handled by their subsidiaries and domestic companies that are familiar with the specificity of each domestic market (1999).


            A number of companies including Johnson and Johnson and Coca Cola have their own ‘bibles’ that outline how their products will be distributed and promoted in the local markets (1999). The strengths of these firms depend on their ability to transfer technology and management skills cross boundaries. The subsidiaries enjoy a high level of autonomy but their competitive advantage is derived from the transfer of technology, know-how and brand equity from the parent company. Also, the competition for the limited pool of managerial talent grows as more firms pursue their global strategies. Global organizations must compete for the most important asset-talent ( 1995).


            Globalization has widespread social, political, economic and environmental consequences. Critics of globalization assert that it widens the gap between the rich and the poor people. It allows companies to exploit the developing countries while it damages the environment through pollution and global warming. Many global companies are charged with acting outside existing laws using their power and market dominance to the disadvantage of global suppliers, customers and competitors (). In Johnson and Johnson, continuous improvement is the basis of their operations. The company does not settle for maintaining the status quo. Each employee has the responsibility to identify and where possible eliminate hazards to the environment and to the people (2003). In areas where such cannot be eliminated, employees are expected to become aware of hazards and safeguard themselves and the people surrounding them.


            As with the safety programs of other companies, Johnson and Johnson management believed that safety is the responsibility of everyone. Employees are expected to become concerned not only with their own safety but as well as of their fellow employees, families, customers, contractors, visitors and the communities from which the company operates.


Business Ethics


            The issues of company and personal conduct in businesses have seemed to become higher in the public agenda. There are number of reasons for this. First of all businesses are becoming more international. There are strong local pressures to provide instant feedbacks on the actions and decisions of the family. A second reason is the occurrence of disasters. Another is the interest shown by the shareholder groups and by the government in ethical and environmental issues. Fourth are the increasing expectations of the public to the businesses and the growing media interests (2002). All of which pushes the questions of conduct, be it personal or company.


            Inherent with business ethics is the challenge for the managers to continuously balance the needs of the organization and its stockholders with the needs of other stakeholders. Managers must also be able to balance their personal needs and desires against those of the organization. To address ethical problems, managers must have to recognize that conflicts of interests exist. One of the most common sources of pressure that compromises ethics is the need to follow the directives of the boss. Other pressures may include the need to meet aggressive business objectives and helping the organization to survive (2005).  


            Given the ethical problems such as those above, the challenge for the manger is knowing how to resolve them. Developing a business ethics is essential for any manager. For some time now, the ethical behaviors have become the forefront of public consciousness. Creating a company culture that rewards ethical behavior is essential for today’s businesses. Equally important is for managers to exercise good judgments whenever ethical conflicts arise (2003). There are several ways to develop global ethical perspectives among managers. First, managers must help the employees to become ethical in difficult conditions by providing a good corporate ethics program. In addition to this, the employee training programs must be devoted to ethics. At a minimum, this should include the study of the code, review of the company’s procedures in dealing with ethical problems and discussion of the employer and employees responsibilities (2004). For example, Johnson and Johnson values good character, ethical behavior and personal integrity. The company’s credo guides all the employees to do the appropriate things in tough situations ().


            The company credits its sixty year old one page statement of values, known as the Credo, in enabling to create the employees’ trust necessary to maintain the corporate value system of the company. The Credo acknowledges the need of the company to make a sound profit while taking into consideration its obligations of providing quality products, treating its employees fairly and with respect, being good corporate citizens and supporting the community where it belongs. The company regards the Credo as the most important thing they have. However, the creation and maintenance of a morally sound corporate culture is an ongoing task at  (2004).


The corporate culture plays a major role in allowing conflicts of interest to paralyze ethical decision making. An environment with ethical cynicism convinces the employees that the resistance to bad behavior is at best useless and at worst dangerous. Formal codes of conduct may have little impact if the business practices contradict them. Creating an ethical corporate environment requires more than the creation of new standards and mission statements. It means busting the cynicism that pervades the corporate culture (Vickers, 2005, p. 26). This is an opportunity of the HR in the organization but the environment is mostly influenced by the actions and the attitudes of the business leaders.


Also, managers must exercise moral imagination. This means resolving tensions in a responsible and creative way. Coca cola, for example, has consistently turned down requests for bribes from Egyptian officials but has managed to acquire political support and public trust through sponsoring a project for planting fruit trees (2003).


Corporate Social Responsibility


Corporate social responsibility (CSR) can be defined as the instances where the company goes beyond compliance and engages in actions that appear to promote social cause. These activities may include adding social features to a product, modifying production processes or working closely to the community to ameliorate homelessness and indigence (2006). It has emerged due to numerous demands for corporations to play an active role in the overall welfare of the society.  In recent years, many businesses have given considerable attention to the social impacts of their economic activities. This has led organizations to introduce code of ethics and accommodate the interest of different groups in the society by engaging in social endeavors (1993). CSR includes four kinds of responsibilities or dimensions: economic, legal, ethical and philanthropic. In this model, each dimension of CSR can be examined in relation to the various stakeholders of the organization including owners, customers, employees and the larger community (2001).


Generally, managers can undertake environmental initiatives beyond the requirement of regulations. They have the discretion to use the resources of the corporation in means they deem necessary. The practice of environmental responsibility may lead to a good sense of business by reducing the effects of the industry before the restrictive legislations are introduced. Additionally, they may be used to add value to the products and services or improve the image of the corporation in the public. Most companies have their corporate social responsibility (CSR) in which they voluntarily adopt environmental initiatives intended to enhance their image (2005). At best, these initiatives provide a starting point for businesses towards sustainable development.


Among the challenges for companies operating under the concept of CSR is the ability to balance environmental responsibilities to its economic responsibility to gain profit. It is therefore important for companies to recognize that the cost of being environmentally responsible often outweigh the benefits. With this, firms will be less willing to implement initiatives. Fortunately, companies are starting to perceive the strategic value of CSR more than a public relations effort (2005). Waste reduction and the improvement of environmental performance are examples of CSR which may cost the company in the short term but will also make it competitive in the long term.


Johnson and Johnson Family of Companies is committed to environment excellence through their policies. The company instills high environmental values to all of its employees, utilizes the best environmental practices in all of its products and contributes to global sustainable development. As one of the largest health care companies in the world, the company recognizes the critical interdependence between the human health and the health of the planet. Johnson and Johnson understand the short and long term threats of environmental degradation to human health. Thus, it holds special responsibility for environment protection (2007).


Another example of a corporation working towards the environmental sustainability is Coca Cola. Its business depends on the health and sustainability of the natural resources. As a beverage company, Coca Cola focus its environmental efforts in three areas which it has great impacts and thus can do the most good: water use, packaging and energy use and climate protection. In addition to this, the company works towards maximizing recycling and reducing solid wastes throughout its processes. A number of specific initiatives and programs have been developed by the company to align its actions to its aspirations (2007).


Coca Cola Company’s corporate commitment involves the responsibility to market their products responsibly, treat people fairly, make a difference in communities where it does its business and protect the environment.  The company invests in local economies through substantive and locally relevant community programs. Wherever it operates, the company works with leaders, businesses and governments to identify the needs of the community. Their partnerships and programs is an important part in contributing to the well being of the communities where Coca Cola operates (2007).



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