Lecture 2

Understanding Competitive
Environment and
Organisational Culture
Prepared by: ANS First Prepared on: 13-12-05 Last Modified on: xx-xx-xx
Quality checked by: HKP
Copyright 2004 Asia Pacific Institute of Information Technology
Introduction to Management
BM007-3-1-IMT
Module Code and Module Title Title of Slides
At the end of this topic, YOU should be able to:

Explain the concept of mega-environment and outline its
major elements
Distinguishing between the concepts of task environment
and mega-environment and describe the major elements
of the task environment.
Explain how environmental uncertainty and munificence
impact organisation
Describe the major methods that organisations use to
manage their environments



Learning Outcomes
Module Code and Module Title Title of Slides
Definitions
External Environment
The major forces outside the organisation that have
the potential to significantly influence the likely
success of products and services.

Internal Environment
The general condition that exit within an organisation.

Module Code and Module Title Title of Slides
Environment

MEGA-ENVIRONMENT
Labour
Government
Agencies
Customers & Clients
Supplier
Competitors
TASK ENVIRONMENT
Technological
Element
Economic
Element
Legal-political Element
Sociocultural
Element
International
Element
Module Code and Module Title Title of Slides
Mega-Environment
The general environment which reflects the broad
conditions and trends in the societies within which an
organisation operates.

It consists of FIVE major elements:
Technological
Economic
Legal-political
Sociocultural
International
Module Code and Module Title Title of Slides
Technological Element
The current state of knowledge regarding the production
of products and services.

Most organisations can be greatly effected, either
positively or negatively by technological progress.

In order to remain competitive, organisations must stay
abreast of current technological developments that may
affect their ability to offer desirable products and
services.
Module Code and Module Title Title of Slides
Economic Element
The systems of producing, distributing, and consuming
wealth
Capitalist economy Activity is governed by market
forces and the means of production are privately owned
by individuals, either directly or through corporations
Socialist economy The means of production are owned
by the state ad economic activity is coordinated by plan
Due to these differences, organisations that do business
in a variety of countries typically confront strikingly
diverse sets of economic ground rules within which they
must operate.
Module Code and Module Title Title of Slides
Legal-Political Element
The legal and political systems within which an
organisation must function.

Trends in legislation, court decisions, politics and
government regulation are particularly important.

Variety of laws that specifically address the manner
which they must function e.g. OSHA
Module Code and Module Title Title of Slides
Sociocultural Element
The attitudes, norms, beliefs, behaviours and associated
demographic trends that are characteristic of a given
demographic area.

The elements is subject to change, it is important for
managers to monitor trends that might offer new
opportunities or pose significant threats.

E.g. Mc Donalds modifies menus all over the world.
Module Code and Module Title Title of Slides
International Element
The development of countries outside an organisations
home country than have potential to influence the
organisation.
International development can greatly affect the ability of
an organisation to conduct business abroad.
E.g. NAFTA North American Free Trade Agreement
involving Canada, Mexico and US, offer big opportunities
for market growth, they allow goods, services and funds
to move more easily between the countries involved.
This factor is beyond the manipulation of a particular
organisation.
Module Code and Module Title Title of Slides
Task Environment
The specific external elements with which an
organisation interfaces in the course of conducting its
business
It depends largely on the precise products and services
that the organisation decides to offer and on the
locations where it chooses to conduct its business
An organisation can influence the elements in this
environment.
The elements comprises of;
Customers and clients
Competitors
Suppliers
Labour supply
Government agencies

Module Code and Module Title Title of Slides
Customers and Clients
Individuals or organisations that purchase products and /
or services.
Orgsanisation today build customer relationship and
ensure customer satisfaction so that they stay close to a
customer to build rapport and receive continuous buying.
IKEA provides baby sitting, children playground and
cafeteria to make customers feel at home and want ot
stay and shop.
Module Code and Module Title Title of Slides
Competitors
Other organisations that either offer or have a high
potential of offering rival products or services.
Organisations need to keep abreast of what their
competitors are doing.

Suppliers
Are those organisations and individuals that supply the
resources (raw material, products services) the
organisation needs to carry on operations.


Module Code and Module Title Title of Slides
Labour Supply
Consists of those individuals who are potentially
employable by the organisation.
Labour supply varies from unskilled, semi-skilled and to
professional.

Government Agencies
Agencies that provide services and monitor compliance
with laws and regulations at local state or regional and
national levels
Module Code and Module Title Title of Slides
Managing Environmental Elements
Adaptation
Buffering
Smoothing
Forecasting
Rationing

Favourable Influence
Advertising and Public Relations
Boundary Spanning
Recruiting
Negotiating contracts
Co-Opting
Strategic alliances
Trade Associations
Political Activity


Module Code and Module Title Title of Slides
The Internal Environment :
Organisational Culture
Organisational Culture A system of shared values
assumptions, beliefs and norms that unite the members
of an organisation.
The way things are done in an organisation.
It is important in an organisation because as individuals
act on shared values and other aspects of organisational
culture, their behaviours can have significant impact on
organisational effectiveness.
Cultures that develop reflect the drive and imagination of
the individuals involved.
E.g. Mc Donalds Quality service, cleanliness and
value.
Culture can have a positive or negative impact.
Module Code and Module Title Title of Slides
Manifestation of Organisational
Culture
Symbols an object, act, event, or quality that serves
as a vehicle for conveying meaning.

Stories narrative based on true events, which
sometimes may be embellished to highlight the intended
value.

Rites and Ceremonials a relatively elaborate,
dramatic, planned set of activities intended to convey
cultural values to participants.
Module Code and Module Title Title of Slides
Q & A
Question and Answer Session
Module Code and Module Title Title of Slides
Review Questions
Outline the major elements that make up the mega-
environment. How would they influence the decisions
which are made in an organisation?
Explain how environmental uncertainties effect the
organisation.
How can an organisations adapt and cope with the ever
so changing environment.
How does a manager help cultivate a positive
organisation culure?
Module Code and Module Title Title of Slides
Follow up Assignment
Read;
Chapter 3 of Management by Kathryn M.
Bartol and D. Martin.
Chapter 2 of Management by Bateman Snell.

Module Code and Module Title Title of Slides
Topic and Structure of next session: -

Chapter 3 Organisational Structure
Next Session