MGMT Chapter 3 - Prof. Morgan PDF

Preview

Summary

Prof. Morgan...

Description

Chapter 3 

09/18/2017

Systems  Open systems o Organizations that are affected by, and that affect, their external environment 

Inputs o Goods and services that organizations take in and use to create products or services



Outputs o The products and services organizations create



External environment  All relevant forces outside a firm’s boundaries



Microenvironment  The general environment; includes governments, economic conditions, and other fundamental factors that generally affect all organizations

            Competitive environment  The immediate environment surrounding a firm; includes suppliers, customers, rivals, and the like

Porters 5 forces  Each organization functions in a close, immediate competitive environment consisting of: o The rivalry among existing competitors o The threat of new entrants o The threat of substitute and complementary products o The bargaining power of suppliers o The bargaining power of buyers 

Environmental Factor



Attractive



Unattractive



Competitors



Few; high industry



Many; low industry

growth; unequal size

growth; equal size; commodity.

differentiated. 

Threat of entry



Low threat; many



High threat; few entry

barriers.

barriers.



Substitutes



Few.



Many.



Suppliers



Many; low bargaining



Few; high bargaining

power. 

Customers

 power.

power. Many; low bargaining

 power.

Few; high bargaining

 

Keeping up with changes in the environment  Environmental uncertainty o When management lacks information to understand or predict the future 

Environmental complexity o The number of issues to which a manager must attend and the degree to which they are interconnected



Environmental dynamism o The degree of discontinuous change that occurs within an industry



Environmental Scanning  Searching for and sorting through information about the environment



Competitive Intelligence  Information that helps managers determine how to compete better



Benchmarking  The process of comparing an organization’s practices and technologies with those of other companies



Scenario  A narrative that describes a particular set of future conditions  Best-case, worst-case



Forecasting  Method for predicting how variables will change the future



Buffering  Creating supplies of excess resources in case of unpredictable needs

 

Smoothing  Leveling normal fluctuations at the boundaries of the environment Independent Strategies  Strategies that an organization acting on its own uses to change some aspect of its current environment



Ways that Managers can influence their environment

Cooperative Action  Cooperative Strategies o Strategies used by two or more organizations working together to manage external environment  

Contracts Cooptation





Coalition Change the boundaries of the Environment  Strategic maneuvering o An organization’s conscious efforts to change the boundaries of its task environment 

Domain selection o Entrance to a new market or industry with an existing expertise



Diversification o A firm’s investment in a different product, business, or geographic area



Mergers o One or more companies combine with another



Acquisitions o One firm buys another



Divestiture o A firm selling one or more businesses



Prospectors o Continuously change the boundaries of their task environment by seeking new products and markets, diversifying and merging, or acquiring new enterprises

 

Defenders o Stay within a stable product domain as a strategic maneuver

Three Criteria Help you Choose the Best Approach 1. Managers need to change what can be changed. 2. Managers should use the appropriate response. 3. Managers should choose responses that offer the most benefit at the lowest cost.



Organizational culture  The set of important assumptions about the organization and its goals and practices that members of the company share o A strong culture is one in which everyone understands and believes in the firm’s goals, priorities, and practices. o In a weak culture, different people hold different values, there is confusion about corporate goals, and it is not clear from one day to the next what principles should guide decisions.

09/18/2017 

09/18/2017 ...