Part1: Defining the Manager’s Terrain:
Chapter 2: Environmental Constraint on Managers:
The Manager: How Much Control?
Omnipotent view of management:
The views of mangers are directly responsible for an organization’s
success or failure.Symbolic view of management:
The loss of sales was not the manager’s fault. The symbolic view saysthat a manager’s ability to affect outcomes is influenced and
constraint by external factors.
Internal and external constraints that restrict a manager’s d
ecision-making options exist within every organization. Internal constraintsarise from the
organization’s culture
and external constraints come fromthe
organization’s environment
.
The External Environment:
Outside forces and institutions that potential
ly can affect the organization’s
performance.
The specific environment:
The part of the external environment that is directly relevant to the
achievement of an organization’s goals.
Customers:
An organization exists to meet the needs of customerswho use its output. Customers represent potential uncertainty to anorganization.
Suppliers:
Managers seek to ensure a steady flow of needed input
(supplies) at the lowest price possible. An organization’s supplies
being limited or delayed in delivery can const
rain managers’
decisions and actions.
Competitors:
All organizations
–
profit and nonprofit
–
have one ormore competitors.
Public Pressure Groups: Managers must recognize the special-interest groups that attempt to influence the actions of organizations.
The general environment:
Broad external conditions that may affect the organization.
Economic conditions:
Interest rates inflation, changes in disposableincome, stock market fluctuations, and the stage of the generalbusiness cycle are some of the economic factors that can affect management practices.
Legal-Political Conditions:
Federal, provincial, and localgovernments influence what organizations can and cannot do. Somefederal legislation has significant implications.
Socio-Cultural Conditions:
Manager must adapt their practices tothe changing expectations of the societies in which they operate. Associetal values, customs, and tastes change, mangers also must change.
Demographic Conditions:
Encompass trends in the physicalcharacteristics of a population such as gender, age, level of education,geographic location, income, family composition, and so forth.Changes in these characteristics may constrain how mangers plan,organize, lead and control.
Technological Conditions:
In terms of the general environment, themost rapid changes have occurred in technology. The whole area of technology is radically changing the fundamental ways that organizations are structured and the way that managers manage.
Global Environment:
The global environment present both opportunities and challenges formanager. With the entire world as a market ad national borders becomingincreasingly irrelevant, the potential for organizations to grow is expandingdramatically. However, even large successful organizations with talentedmangers face challenges in managing in the global environment.
Global trade:
When trade is allowed to flow freely, countries benefit from economic growth and productivity gains because they specializein producing the goods that are best at and importing goods that aremore efficiently produced elsewhere. Global trade is being shaped bytwo forces:
The European Union (EU):
A union of 27 European countriesthat forms an economic and political entity.
The North American Free Trade Agreement (NAFTA):
Anagreement among the Canadian, American, and Mexican governmentsin which barriers to free trade were reduced.
The association of Southeast Asian Nations (ASEAN):
Atrading alliance of 10 Southeast Asian countries.
The World Trade Organization (WTO):
A global organizationof 153 member countries that deals with the rules of trade amongnations.
The Legal-Political Environment:
The stability of laws governingthe actions of individuals and institutions allows for accuratepredictions. The same cannot be said for all countries. The legal-political environment does not have to be unstable or revolutionary
to be a concern to mangers. Just the fact that a country’s laws and
political system differ from those of the other countries is important.
The economic environment:
It is important to have anunderstanding off the type of economic system under which thecountry operates.
Market economy
:
An economic system in which resources areprimarily owned and controlled by the private sector.
Planned economy
:
An economic system in which all economicdecisions are planned by a central government.In actuality no economy is purely market or planned.
The cultural environment: The values and attitudes shared byindividuals from a specific country that shape their behavior andbeliefs about what is important. (There is the national culture and theorganizational culture.)
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