Chapter 12 (Managing Diversity)

Managing Diversity

Diversity: the range of traits a group of people have: gender, age, language. ethnicity, cultural background, disability, sexual orientation or religious belief.

Diversity also includes many differences people have in educational level, skill level, socio-economic background, personality, geographic location and family situation. With diversity managed in a workplace, it allows a business to draw on the largest pool of potential employees and it provides the widest possible range of talents, skills and ideas. Diversity can improve morale and loyalty and can lower the level of staff turnover. A diverse workforce can better understand and cater to the diverse community around it.

Details to be taken note of when working in a diverse and global environment:

  • personal style and how this may be perceived by others
  • the way people from different cultures expect to be managed
  • how one’s style will be viewed and the possibility that international colleagues or clients may feel confused and unsure about your actions.

Ways to use diversity in the workplace for business success:

  • expanding and forming new markets
  • using bilingual staff to provide client service in the first language of customers
  • advertising in community languages
  • employing professional bilingual staff for international business trips
  • developing translated information for service information and instructions to use.

Legal and ethical requirements

Diversity has to be managed in a positive way and this is a legal obligation of an employer. There are legislation that prohibit discrimination and encourage workplaces to be tolerant and to recognise the differences that exist in the workforce and give all people the opportunity to achieve to the best of their ability, below are a few:

  • Age Discrimination Act
  • Racial Discrimination Act
  • Racial Hatred Act
  • Disability Discrimination Act
  • Workplace Gender Equality Act 2012

Managing diversity for business growth

To benefit from diversity, a culture in which all employees feel free to contribute ideas must be established. This will encourage all staff to share their ideas and opinions, give feedback and participate in decision making. Here are a few strategies:

  • Ensure everyone is heard
  • Make it safe to propose ideas
  • Give employees authority to make decisions
  • Share credit for success
  • Give constructive feedback
  • Implement feedback from staff

Managing diversity can create market opportunities. A diverse workforce reflects and better understands the diverse community and consumers in the marketplace. If there is at least one member of a team with traits in common with the target market, the entire team will understand the target market.

Having a diverse workforce and a workplace that is free from discrimination will decrease staff turnover and help build high employee satisfaction and loyalty. This may reduce the disruption and costs of staff turnover. Diversity in the workplace is necessary in order for a business to be competitive in a globalised world.


Chapter 11 (Change for success)

Change management: a process that coordinates business systems to control and manage change within an organisation.

Businesses operate in an environment that is always changing. Change in the business environment is brought about by new government policies and laws, demographic changes, developments in technology and increased competition.

What worked in the past may not work now. Management and directors may decide to respond to change through a strategic process of creating of a new vision and new goals implemented through new business structures and systems.

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There are two important aspects of change management:

  • The business: requires successful implementation of new systems, policies and technologies to respond to the business environment ad new strategic direction.
  • The people: all employees must understand the reason why the business must change and the purpose of the change process. Management must be clear about any repercussions for staff (promotions, demotions, redundancies) and the role of staff in the change process. Change will succeed if employees are supportive and motivated to change.

Examples of changes include:

  • new products and services
  • sacking people to cut costs
  • outsourcing
  • starting business online
  • entry into a strategic alliance
  • significant change in laws and regulations
  • international expansion
  • a move into franchising
  • buying and selling businesses.

To overcome resistance to change, management has to consider the following:

  1. Why the change is occurring
  2. A sound rationale for the change
  3. The most strategic time to make the change

Management must ensure that all stakeholders are included in the planning and discussion change. By consulting employees and involving them in decisions they can feel a sense of ownership and control over the direction of change. In this way, managers can gain support for the change rather than encounter resistance.

Resistance to change: when employees oppose or struggle to accept changes in the workplace.

Resistance to change may be expressed as criticism, nitpicking details, failure to adopt new policies and procedures, sarcasm, missed training and meetings, arguments with management and co-workers and, at the extreme, workplace sabotage.

  • Financial costs
  • Purchasing new materials and equipment
  • Redundancy payouts
  • Retraining
  • Inertia of managers and owners
  • Cultural incompatibility in mergers/takeovers
  • Staff attitude
  • Ripple effects
  • Loss of control
  • Poor timing

Preparing people for change

  1. Lewin’s stages of change
    • Unfreeze: Present the argument for the change and prepare employees for the process of change.
    • Changing: Implement the change plan. Introduce new systems, policies and processes.
    • Refreeze: Formalise the change. Employees get used to the change.

Change management can be unsuccessful. There may be resistance to change because employees fear they will lose their jobs or authority. The main factors of unsuccessful change are:

  • poor planning
  • lack of skills and experience of the change team
  • poor leadership by the change agents
  • lack of communication throughout the process
  • lack of coordination among managers.

2. Lewin’s Force Field Analysis

For change management to be successful employees must be convinced that the forces for change are stronger than the forces against change. Force field analysis is a method to analyse and compare the forces of change. It is a tool that can be used as part of the unfreezing stage to help employees understand the need for change.

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3. Kotter’s 8 Steps

  • Step 1: Create urgency
    • Identify threats and opportunities in the business environment.
    • Discuss the reasons for change to get people talking and thinking.
    • Ask for input and support from staff.
  • Step 2: Form a powerful coalition
    • Identify leaders in the workplace.
    • Create a change team that will work together to make it happen.
    • Have a good mix of people from different departments and different levels.
  • Step 3: Create a vision for change
    • Use the change team to develop a goal.
    • Write a clear plan for the change process to achieve the goal.
    • Ensure the vision is easy to understand and communicate to others.
  • Step 4: Communicate the vision
    • Talk often about the change vision.
    • Seek feedback and address concerns.
    • Lead by example.
  • Step 5: Remove obstacles
    • Use meetings and communication to identify barriers and find solutions.
    • Reward people for making change happen.
    • Identify people who are resisting change and try to convince them of its importance.
  • Step 6: Create short-term wins
    • Take care when choosing early targets, failure to achieve them will jeopardise future success and commitment.
    • Communicate successes to all staff.
  • Step 7: Build on the change
    • Keep reviewing and improving to make sure the change is working.
    • Ensure all policies, procedures, manuals and instructions are updated.
    • Seek feedback from staff.
    • Identify where the new methods are not being followed.
  • Step 8: Anchor the changes in corporate culture
    • Keep celebrating successes.
    • Show how success has come from change.
    • Keep workplace leaders informed so they can answer questions from their work teams.

Chapter 9 (Business Innovation)

Innovation: is about creating something new, and improving existing systems, products and processes. It can be a radical change or change built from incremental improvements.

An outcome of innovation is the continuous improvement of products, processes and systems. This involves building on good practice and identifying ways to keep getting better. Innovation can be based around process and/or product.

Innovation can lead to:

  • improved economic outcomes
  • survival and growth
  • increased employment
  • increased exports
  • improved skills in the workforce
  • new ways of working such as virtual work groups
  • better management of environmental impact

Sources of ideas for innovation:

  • competitor analysis
  • sales and cost data
  • feedback and ideas from staff
  • feedback from suppliers
  • market research
  • production and quality data
  • customer motivations and preferences
  • feedback from customers

Process innovation: changing and improving how a business operates and/or manufactures, distributes and markets its products and services. An emerging process innovation is cloud computing. Companies are using it to increase efficiency and reduce costs.

Product innovation: changing and improving the features, materials or functions of a product or service.

Benefits of innovation:

  • Financial gain
  • Expansion of global market presence
  • Increased market share


An innovation has to work, can be commercialisedintegrated into a product or service and generate income.

Factors that affect innovation success:

  • Timing
  • Cost
  • Marketing strategy
  • Technology
    • Managers of technology must be able to:
      • manage and analyse information
      • generate ideas
      • realise ideas
      • protect the technology

Intellectual property protection

A company is more likely to benefit from an innovation if they can prevent competitors from using it too. An innovative product design, manufacturing technology or improvements made to features or packaging may result in increased sales, a new market or increased profit through lower costs.

Protecting the design through a patent, copyright or a registered design will stop competitors from making and launching their own versions and benefiting from the time and money another company invested in the innovation.

Chapter 8 (Export risk)

Risks involved in international transactions

  • Delays in payment or non-payment
  • Loss or damage in transit
  • Loss due to exchange rate variations
  • Increased transportation costs

The best way to reduce financial risk when exporting is to arrange prepayment of invoices. A customer signs a sales contract and makes payment upfront. The Australian business receives the money so there is no risk of non-payment later on. The exporter could require customers to pay the full price or a large deposit. Australian banks offer international money transfers. Electronic payments are sent from a branch via Internet banking from Australia to banks in other countries.

Non-payment of monies

A financial risk is not receiving payment from the customer after incurring costs and possibly providing the goods or service. Unlike a domestic transaction, it may be very difficult to track down a customer that hasn’t paid in another country and difficult to find legal recourse to recover the debt.


  • Documentation to manage risk
    • Documentary letter of credit
    • Documents against payment


  • Export Credit Insurance
  • Political Risks Insurance
  • Transit or Shipping Insurance


  • Forward
  • Backward

Chapter 7 (Global alliances)

Strategic alliance: two or more businesses form a partnership for a project, business venture or for the long term to create a new business, is a strategy of collaboration between businesses for mutual benefit, should bring income to alliance partners that would not otherwise occur.

Businesses in a strategic alliance share customers, resources, staff and operations. The aim for alliance partners is to create synergy in the alliance, to create a competitive advantage greater than they could have on their own.

Small or new businesses form strategic alliances to benefit from access to the established channels of distribution, marketing and brand reputation of a larger established business. Established businesses enter alliances to increase their capability for geographic expansion, cost reduction and manufacturing. Strategic alliances are often formed between businesses that are based in different regions of the world.


  • quick access to a new market
  • reduction of competition by forming an alliance with competitors
  • larger market share
  • increased sales and income
  • gaining new expertise and technology
  • access to research and development for business development
  • increase in the range of products and services
  • the opportunity to share operating costs and working capital
  • access to established distribution channels
  • gaining greater knowledge of customs and culture in other countries and regions
  • the opportunity to build greater global brand awareness


  • may take on the weaknesses of the partner (e.g.: a lack of management expertise, unmotivated staff or high costs)
  • less efficient communication in a larger multinational business
  • increased conflict over decisions and allocation of business resources
  • making the alliance work takes time and energy away from the core business activity
  • loss of control over product quality, operating costs, employees and so on
  • opportunistic behavior by any participant

Types of strategic alliances

  1. Outsourcing
  2. Acquisition
    • Hostile acquisition
    • Friendly acquisition
  3. Mergers
    • Horizontal merger
    • Vertical merger
    • Conglomerate merger
  4. Joint venture
  5. Franchising


Chapter 6 (Global growth)

A Global Brand

When entering an overseas market businesses have the options of:

  • standardising their marketing mix or
  • adapting the marketing mix to the local preferences and market characteristics.

Global branding requires large budgets but the use of technology such as websites and social media can make global campaigns affordable for businesses all sizes.

Benefits of a global brand

  • Consistency
  • Low risk
  • Lower cost
  • Easier to manage
  • Better differentiation

When to go global

Feasibility: the potential of a market

  • the market size
  • competitors in the target market
  • capital requirements to launch and sustain the business
  • considering the experience and expertise of staff and partners

Other factors to consider:

  • Level of consumer demand
  • Consumption patterns
  • Competitor activity

Information can be:

  1. Primary data: research and observation, involve extensive time spent in the target country conducting market research and includes exploiting competitor websites, outlets, patents and pricing
  2. Secondary data: published form and includes government publications, trade shows, media reports, advertising, competitor annual reports and product brochures
  3. Anecdotal data: comes from discussions with suppliers, customers and past employees of competitors

Competitor activity that supports market entry includes:

  • few competitors
  • customers unsatisfied with products on offer
  • products that are easily copied or substituted
  • competitors not offering choice or value for money
  • competitors missing a market need or niche market

Competitor activity that makes it difficult for market entry includes:

  • size, market dominance and wealth of competitors
  • that they’re an established brand that is part of the country’s culture
  • established distribution channels with strong working relationships with suppliers and retailers

Adapting strategies for international markets

A business conducts international market research and is aware of the differences between international markets to devise better marketing strategies. The differences between markets has an impact on the design and implementation of strategies and form the basis of the identification of target markets.

Adapting market strategies increases the costs involved in strategy implementation. It is less expensive to standardise strategies across foreign markets, but treating markets as homogeneous may result in marketing failure.

Approaches to strategy adaption are:

  • Use domestic strategies internationally with no change.
  • Adapt strategies based on generalizations about a region
  • Adapt strategies to countries based on national market research
  • Adapt strategies to regions or target markets in countries based on market research

Elements of the marketing mix

  • Positioning
  • Product features
  • Process
  • People
  • Product name and slogans

Chapter 4 (E-commerce)

Global business grew because of the development of transport and communication systems over the world. Technologies today have created a business environment with secure payment systems, around the clock access to online shopping and the digital distribution of products. Currency conversions are automated, language can be translated and payments and communications are protected by encryption.

Technology has created new industries and business opportunities for global expansion; specialised technologies such as nanotechnology and biotechnology. Technology enables people and companies to provide their goods and services around the world.

Online and Digital Technologies

  • A website gives customers access to the business all the time from anywhere in the world.
  • Orders on a website can be linked to delivery and payment systems.
  • Difficult to keep up with emails and online orders but automated processes can help staff cope with the demand.
  • There is free or low-cost online design, word processing and spreadsheet software that businesses can use that is much cheaper than buying software licenses.
  • Internet is used to research businesses and markets to gather business intelligence.
  • Software and designs can be distributed quickly and securely and web conferencing can occur with broadband large files such as contracts.
  • Mobile devices such as phones, laptops and digital assistants can facilitate better communication with staff, customers and suppliers.


  • Refers to a business built on the use of information and communication technologies (ICT).
  • Selling products and services online may help you save on costs, reach more customers and be able to complete orders and projects in a shorter time.

eBusiness methods

  • Communication via email and SMS
  • Send emails to other businesses to order products and services
  • Sell via a website
  • Use the Web to find information such as prices, phone numbers and reviews of products
  • Staff work at home and keep in touch with the business online
  • Use the Web for research such as the latest industry trends
  • Use the Internet for online banking and to pay bills


  • An emerging technology based on the use of wireless mobile devices to conduct business over a high-speed Internet connection
  • Combination of a mobile phone, a WAP Internet connection and a payment system
  • A mobile phone will become an electronic wallet
  • Predicted to grow because of the increased capability of the mobile network

Issues of concern with m-commerce

  • Spams and scams
  • Privacy
  • Informed customers
  • Consumer debt

For success retailers must:

  • Optimise tablet and smartphone experience
  • Use social media and mobile marketing to drive store traffic
  • Provide exceptional service

E-commerce strategies

  • An e-commerce strategy should support the business as a whole
  • Can be a costly venture and it should be considered carefully because e-commerce failure may have an impact on overall profitability and survival


  1. International shipping
  2. Branded website
  3. Wholesale online
  4. Local market URL

Chapter 3 ( Free Trade Agreements)

Free Trade Agreements

Goal: To increase the profit and efficiency of the private sector by reducing the time and money spent on complying with different laws in the different states and territories they operate in.

Trade negotiations result in governments committing to free trade agreements > Free trade agreements are made between countries and to form trading regions


  • involving tariffs and customs duties on agricultural products like wheat and apples
  • two or more countries agree to standardise customs duties and tariffs, to reduce them or remove them
  • each country can export their produce to the other countries and sell it at a similar price as local produce

Examples of Free Trade Agreements involving Australia

  • China-Australia Free Trade Agreement
  • ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA)
  • Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA)
  • Pacific Agreement on Closer Economic Relations-Plus (PACER-Plus)

Chapter 2 (Home-grown business)

3 major points to know about this chapter are:

  1. The incentives for international business
  2. Global business ethics
  3. Other ethical dilemma

The incentives for international business


  • administers government’s Export Market Development Grants (EMDG) scheme for new and existing international businesses
  • financial assistance in the form of a reimbursement of up to 50% of expenses incurred on eligible export promotion activities
  • businesses that have less than $50 million per year and incur at least $15000 of eligible export expenses are eligible
  • providing information about international markets and trends
  • arranging meetings with potential clients and partners
  • providing ongoing support and information

Export Finance and Insurance Corporation (EFIC) Export Finance Guarantee:

  • a facility between EFIC, a bank or other financial institution and a foreign business partner
  • provides a guarantee to the bank for the buyer’s payment obligations
  • secures finance and minimises the risk of payments not being made between businesses in different countries

Home-grown benefits

For a businesses to have international success they must have a strong base. A business can use a strong domestic foundation to expand overseas. Marketing strategies can be tested, products developed and distribution  channels established. Domestic success also establishes business systems in communication, administration and continuous improvement.

Global business ethics

  • Offshore labour
  • Environmental responsibility
  • Reduced costs
  • Staff loyalty
  • Public relations and public image
  • Carbon trading
  • Outsourcing
  • Dumping
  • Fair trade

Other ethical dilemmas

  • Bribery

Chapter 1 (Global Business)

Globalisation refers to the integration of markets in the global economy, leading to the increased interconnectedness of national economies.  Markets where globalisation is particularly common include financial markets, such as capital markets, money and credit markets, and insurance markets, commodity markets, including markets for oil, coffee, tin, and gold, and product markets, such as markets for motor vehicles and consumer electronics. The globalisation of sport and entertainment is also a feature of the late 20th and early 21st centuries.

For globalisation:

  • creates employment and investment in developing countries and increased revenues for government
  • creates a platform and international relationships that can be used to  build global standards for fair trade, environmental protection and human rights
  • promotes competition which leads to better choices and prices for consumers and businesses
  • improves the quality and growth of education and training as well as
  • improves the standard of living.

Against globalisation:

  • free trade creates vulnerable countries that do not have protections for local businesses and workers
  • globalisation widens the gap between the rich and the poor where wealthy countries and corporations exploit low pay and conditions
  • international companies exploit the lack of environmental protection in some countries
  • globalisation promotes a single culture as the basis for marketing a way of life; encouraging values of materalism and individualism and having an impact on cultural diversity.


Factors that drive global business:
  1. Financial opportunities and deregulation
  2. Patterns of consumption
  3. Technology and globalisation
  4. World Trade Organisation (WTO)

Impact of globalisation:

  1. Employment levels
  2. Spread of skills and technology
  3. International cooperation
  4. Domestic market (Competition)
  5. Tax minimisation (Tax havens and transfer pricing)