Chapter 3 - management PDF

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Organizational Environments & Cultures 10/01/2015 Changing Environments  External environments: the forces outside a company that have the potential to influence or affect it  Environmental Change 

Environmental Change: The rate at which a company’s general and specific environments change

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Stable Environments: The rate of environmental change is slow Dynamic Environments: The rate of environmental change is fast Punctuated Equilibrium Theory: Companies go through long periods of stability

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Environmental Complexity

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Environmental Complexity: Refers to the number and the intensity of external factors in the environment that affect organizations

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Simple Environments: Have few environmental factors Complex Environments: Have many environmental factors Resource Scarcity

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Resource Scarcity: The abundance or shortage of critical organizational resources in an organization’s external environment

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Uncertainty How well managers can understand or predict the external changes and trends affecting their businesses

General Environment  Two kinds of external environments influence organizations: general environment and specific environment  General Environment: Consists of the economy and the technological, sociocultural, and political/legal trends that indirectly affect ALL organizations 

Specific Environments: Unique to firm’s industry and directly affects the way it conducts day-to-day business

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Economy Business Confidence Indices: Show how confident actual managers are about future business growth

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Technological Component

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Knowledge, tools and techniques used to transform inputs (raw materials, information, and so on) into outputs (products and services)

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Changes in tech can help companies provide better products and be more efficient

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Sociocultural Component

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Sociocultural Component: The demographic characteristics, general behavior, attitudes, and beliefs of people in a particular society

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Political/Legal Component New laws can be imposed and managers may not be aware of them This can result in risky practices if businesses do not stay on top of new laws

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Specific Environment Customer Component  Monitoring customer feedback is essential to maintaining a business’s client base  Reactive customer monitoring- identifies and addresses customers’ needs after the problem occurs 

Proactive customer monitoring; “…” before the problem occurs Competitor Component  Competitors motivate the company to constantly update their products/services 

Competitive Analysis: Involves deciding who your competitors are, anticipating competitors’ moves, and determining competitors’ strengths

and weaknesses Supplier Component  Suppliers provide material, human, financial, and informational resources to other companies  Supplier Dependence: The degree to which a company relies on that supplier bc of the importance of the supplier’s product to the company and the difficulty of finding sources for that product elsewhere 

Buyer Dependence: The degree to which a supplier relies on a buyer bc of the importance of that buyer to the supplier’s sales and the difficulty of finding other buyers of its products

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Opportunistic Behavior: One party benefits at the expense of the other

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Relationship Behavior: Focuses on establishing a mutually beneficial, long-term relationship between buyers and suppliers

Industry Regulation Component  Industry Regulation: Consists of regulations and rules that govern the practices and procedures of specific industries  Examples: CSPC, DoL, EPA, EEOC, FCC, FRS, FTC, FDA, NLRB, OSHA, SEC Advocacy Groups  Advocacy Groups: Groups of concerned citizems who band together to try to influence the business practices of specific industries, businesses, and professions  These groups are important because public boycotts can affect an organization’s PR 

Public Communications Approach: Relies on voluntary participation by the news media and the advertising industry to send out an advocacy group’s message

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Media Advocacy: Typically involves framing the group’s concerns as public issues

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Product Boycott: Tactic in which an advocacy group actively tries to persuade consumers not to purchase a company’s product or service

Making Sense of Changing Environments Environmental Scanning  Involves searching the environment for important events or issues that might affect an organization  Managers can scan the environment to stay up to date on important factors in their industry and to reduce uncertainty Interpreting Environmental Factors  After scanning, managers determine what environmental events and issues mean to the organization  Usually these are viewed as either threats or opportunities  

Managers take steps to prevent further harm from threats Managers take opportunities as means to further improve the company Acting on Threats and Opportunities  Cognitive Maps: Summarize the perceived relationships between environmental factors and possible organizational actions

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These help managers comprehend all the factors and changes

Organizational Cultures: Creation, Success, and Change  Internal Environment: Consists of the trends and events within an organization that affect the management Creation Maintenance of Organizational Cultures  Organizational Stories: Make sense of organizational events and changes, empathize culturally consistent assumptions, decisions, and actions  Organizational Heroes: Organizational people admired for their qualities and achievements within the organization Successful Organizational Cultures  Organizational culture is related to organizational success  Involvement, a clear mission, and consistency can help companies achieve higher sales growth, return on assets, profits, quality, and employee satisfaction Changing Organizational Cultures  3 main organizational cultures: surface, values & beliefs, unconscious assumptions  Surface- reflections of an organization’s culture that can be seen or observed  Ex- dress codes, office layouts  Values & Beliefs- beliefs of the company’s employees begin to reflect the company overall 

Unconscious- Managers should change observable behavior in order to change unconscious assumptions others may have...