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5.1 Decision making

Decision making is understood as management's main task. Usually, the model of decision making is described as a perfectly well-organised, rational and logical process. First, the problem is defined. Second, all the relevant information that leads to an optimal solution is collected. Third, reviewing the data, management (perhaps with the help of technocratic ‘experts’) develops several possible solutions. Fourth, evaluating the possible solutions carefully, management makes a decision re
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4.2.2 Rational organisations

The third source of authority, based on rational-legal precepts, is exactly what Weber identified as the heart of bureaucratic organisations. People obey orders rationally because they believe that the person giving the order is acting in accordance with a code of legal rules and regulations (Albrow, 1970, p. 43). Members of the organisation obey its rules as general principles that can be applied to particular cases, and which apply to those exercising authority as much as to those who must
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4.2.1 Three sources of authority

According to Weber, there were three major bases to authority.

  1. Charismatic authority means that deference and obedience will be given because of the extraordinary attractiveness and power of the person. The person is owed homage because of their capacity to project personal magnetism, grace and bearing. For instance, management gurus such as Jack Welch, politicians such as Nelson Mandela, or popular characters such as Princess Diana are charis
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4.2 Bureaucracy

Bureaucracy as a concept has had an interesting career: it begins in France in the eighteenth century. By the nineteenth century, the German state constructed by its first Chancellor, Bismarck, was a model bureaucracy in both its armed forces and civil administration. Weber (1978) realised that the creation of the modern state of Germany had only been possible because of the development of a disciplined state bureaucracy and a bureaucratised standing army – innovations pioneered in Prussia
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3.3.2 China

When the medieval Italian traveller, Marco Polo (1254–1324), returned from China, he shocked Europeans with the news that the Chinese used not metal but paper money; indeed, European resistance to representative money based on paper notes stretched into the nineteenth century (de Soto, 2000, p. 222). While China might have had a few centuries away from the global limelight, it is currently staging the biggest economic boom in the history of the planet. In common with Japan, China runs a sub
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3.3.1 Japan

After the Second World War, the commander of the allied occupation of Japan (1945–52), General Douglas MacArthur, proclaimed in a September 1945 interview with the New York Times that ‘Japan will never again become a world power'; and, five years later, his economic experts advised that ‘the Japanese economy's best course in the postwar era would be to make “knickknacks” – their word – for underdeveloped countries’ (Fingleton, 1997, pp. 1–2). Today, Japan is a technol
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3.2 Institutions in flux

Although the implosion of the Soviet Union, after the dismantling of the Berlin Wall in 1989, has extended the flow of global capitalism, de Soto (2000) argues that the lack of capitalist institutions – and specifically legally enforceable rights to own property – has frustrated Western expectations about achieving increased prosperity through free-market economic development: ‘Ten years ago, few would have compared the former Soviet bloc nations to Latin America. But today they look as
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3.1.1 Global convergence?

The Nobel Laureate, Douglass North (1990, p. 46), has argued that progress, from a less to a more complex society, is characterised by a lengthy and uneven but unidirectional move from informal institutional rules of practice to formal constraints. Thus, informal sanctions, taboos, customs, traditions and codes of conduct are superseded by formal rules embodied in constitutions, laws and legally enforceable property rights, including intellectual property and copyrights. North argues that the
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3.1 Interconnectedness

In making sense of the stretch from the here-and-now to the wider context, social science has often seized on distinct levels: the micro – dealing with things that happen in organisations, for instance – and the macro or national level. Explanations are often generated at either the micro or the macro level and critical connections between the two are ignored (Flyvbjerg, 2001, p. 138). Arguably, increased talk about globalisation provides a convenient label for things that g
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2.5.1 Anglo-zone connections

Much of today's global interconnectedness has been shaped by the legacies of long-standing trading patterns, imperial expansion, colonisation and strategic military interventions. From the late seventeenth century to the mid twentieth century, Britain presided over the largest empire in global history – although expansion was tempered by adjustment as former colonies gained independence. With the benefit of hindsight, the American War of Independence (1775–1783) or the American Revolution
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2.5 Clusters

A striking contradiction of the internet revolution is that, although cyberspace allows firms to be located anywhere, they still seem to cluster together in global cities such as New York, London and Sydney (Castells, 2001). Four years after publishing a book proclaiming The Death of Distance, Frances Cairncross noted in the book's second edition that, ‘Economists, most of whom have long ignored or despised economic geography, are now taking a fresh interest in it’ and, after revie
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2.4 Glocalisation

‘Glocalisation’ combines the words ‘globalisation’ and ‘localisation’ to emphasise the idea that a global product or service is more likely to succeed if it is adapted to the specific requirements of local practices and cultural expectations. The term started to appear in academic circles in the late 1980s, when Japanese economists used it in articles published by the Harvard Business Review. For the sociologist Roland Robertson, who is often credited with popularising the
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2.3 McDonaldisation

George Ritzer (1993; 2004) has coined the term ‘McDonaldisation’ to describe the way in which, increasingly, things are produced in similar, standardised ways, updating, amplifying and extending Weber's theory of rationalisation. Ritzer points out that he does not bear any particular animosity towards McDonald's: ‘It is no better or worse than most other fast-food restaurants and other manifestations of the rationalization process. I have labeled the process of concern here "McDonaldiza
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2.2 Standardised products

While Theodore Levitt's (1983) classic article about the globalisation of markets accepted that there are fundamental disparities across different local contexts that have to be accommodated (for example, Japan's auto exporters had to adjust to the fact that the USA and continental Europe, unlike Japan, drive on the right), he argued that there was an underlying uniformity in human tastes. Levitt's vision of the globalisation of markets was that it created opportunities for firms to offer glo
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2.1 Introduction

Globalisation is used in different contexts to mean quite different things. According to the prestigious Economist magazine's Pocket Strategy: The Essentials of Business Strategy from A to Z, globalisation is: ‘The marketing of uniform products around the globe, based on an idea put forward by Harvard's Theodore Levitt in an article published in the Harvard Business Review in 1983’ (The Economist Books, 1998, p. 88). In his article ‘The globalization of markets’,
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1.2 Aims

The aims of this unit are:

  • to explore the processes that link local practices to global contexts;

  • to identify key dimensions of globalisation and explore its implications for knowing how to ‘do things’ in a variety of contexts;

  • to compare approaches to managing and organising, based on universally applicable principles, with context-specific rationalities;

  • to illustrate how viable interpretations
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1.1 The wider context

This unit explores the management of local knowledge-generating practices with regard to their wider contexts. Although these local practices might be considered in terms of individuals acting and thinking as if they were autonomous, independent agents interacting with other agents, such practices are simultaneously shaped by shared skills and understandings. As Karl Marx pointed out, when the hero of Daniel Defoe's (1660–1731) novel Robinson Crusoe (Defoe, 1994, first published in 1
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Learning outcomes

After studying this unit you should be capable of thinking critically about and be able to comment on:

  • processes by which local practices are situated within their wider contexts;

  • dimensions of globalisation;

  • the nature and significance of institutional rules of practice;

  • some differences between managing knowledge-generating practices in Anglo-American, Japanese and Chinese contexts;

  • implications of managing through mu
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Introduction

This unit looks at the management of local knowledge-generating practices. You will explore the processes that link practices to global contexts and learn to identify the key dimensions of globalisation and explore the implications for knowing how to ‘do things’ in a variety of contexts. You will go on to compare the approaches to managing and organising, based on universally applicable principles, with context-specific rationalities and look at how viable interpretations of reality might
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4 How do organisations become market leaders?

Drucker (1992) wrote:

The five most important questions you will ever ask about your organization [are]:

  • What is our business?

  • Who is our customer?

  • What does our customer consider value?

  • What have been our results?

  • What is our plan?

Can you answer these questions for your own organisation? I don't expect you to know all the answers now. Try to think about them
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