Lecture 2 - 11.10.

2018
Management comes from the latin word “manus”, meaning “hand”. Therefore, it is about
handling situations. Management does not involve just the idea of giving orders to others, but it
encompasses a complex process meant for achieving with maximum efficiency an established goal.
We could say that management is about planning (forecasting), organising, coordinating,
commanding and controlling your own activity, but most importantly the activity of others, in order
to succeed in correctly doing the undertaken actions.
Management entered the economic life as a concept being largely accepted by most of the
people in 1941, when James Burnham published in New York a book entitled “The Managerial
Revolution”, this representing in fact a real revolution in terms of theory and practice related to the
management activity.
Management can be analysed as a practical activity, but it can be also considered to be an
art. Also, management succeeded in turning into a science once people had realised that this is a
highly useful tool in carrying out any important activity.
Management manifested as a practical activity exists since the beginnings of the human
society. People working in groups, in communities or in collectivities needed someone to guide
them, to organise them, to coordinate their activity and so on, and this involved the existence of
some individuals that today we can assimilate to managers. Thus, from this perspective, we can
define management as representing a complex set of actions carried out in order to provide a
normal, proper functioning operation of organised human collectivities (be their education
institutions, political organisations, economic enterprises and so on) and of any structural
component thereof.
The main goals when talking about managing things is:
A. To use any available resources in the most possible efficient way;
B. To carry out undertaken activity under best possible conditions in order to achieve a high level
of efficiency.
There are three main premises having been at the basis of the management activity:
1. The existence of human collectivities, this involving the need for coordination, for guidance, for
order and discipline among many others.
2. The social division of labour and the specialisation of producers that emerged and developed
increasingly due to the technological and scientific progress, this involving the cooperation in
labour, the interconnection of the actions of individuals as well as the evaluation and control of
the activity of the same.
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3. The establishment of large corporations encompassing a large number of employees and
involving a large volume of technical capital which imposed the need for coordination of all
activities carried out by different departments.

Lecture 3 - 18.10.2018
Management should be also perceived as an art, in fact this is deemed to be the oldest of all
arts that men push towards perfection. It is the art of making people work by persuasion.
Convincing people to work is not an easy thing to do, but by adopting an appropriate attitude, one
might succeed in doing so in an appropriate manner. Harold Koontz and Cyril O’Donnell
considered management as the work of an artist able to provide a highly efficient activity with
lowest possible negative consequences.
After having emerged as a practical activity and after having manifested in time as an art,
management became at the beginning of the 20th century a science. The parents of management as a
science were the American engineer Frederick Winslow Taylor and the French geologist Henri
Fayol. The name of the two titans of economic management are related to the management
principles (for both of them) and to management functions (for the latter). Taylor has published in
1911 the book entitled “The Principles of Management”, which is considered even today as one of
the best guidelines for all individuals trying to manage an organisation. Another important book is
represented by the work of Fayol, published in 1916 and entitled “General and Industrial
Administration”.
Management as a science belongs to the category of functional and measurement functions,
which is part of the category of social sciences. In fact, the management science started to manifest
at micro-level, extending thereafter both horizontally and vertically and turning into a micro social
science, a mezzo social science and a macro social science, this meaning that we refer to
management as to an activity carried out at the level of an organisation, at the level of a branch of
activity as well as at the level of a nation, all of them incorporating also the social component.
Considering that management is a science, we should perceive it via its related processes
and relationships. Management as science can be defined from such perspective by virtue of its
object of study as being focused on the management processes and relationships, the main purpose
of it being to identify the laws governing the same as well as to conceive new systems of
management and to outline new management methods and techniques. The management process is
represented by a series of activities via which a part of the employees (the managers) act upon the

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other part (the executants - subordinates) as such process is beside the execution one a component
of the labour process.
The management relationships reflect the interconnections in terms of communication,
activities carried out and so on, among the members of an organisation (both managers and
subordinates) and among the members of one organisation and the members of other organisations,
while accomplishing the forecasting (planning), the organising, the coordinating, the commanding
and the evaluating and controlling specific management functions.
The management process and most importantly the management relationships are highly
influenced by the type of activity of the organisation, the complexity of the same, the level of
specialisation of it, the territorial spread, the quantity and quality of the personnel being their
managers or subordinates, the legislation and so on. Thus we discuss in terms of a triple
determination of such process and relationships, namely:
- The social and economic determination, being related to different management approaches,
given the type of ownership encountered in that organisation.
- Technical and material determination, as management is highly dependent on the type and
characteristics of the production factors, this having led to the specialisation of management
(agricultural management, industrial management, etc…).
- The human determination as management is certainly subject to the personality and potential of
both managers and subordinates.

Lecture 4 - 25.10.2018
Three important stages have occurred until reaching the current form of scientific
management:
1. The first one, known as empirical management, was that type of management based on the
intuition and practical experience of an individual who was usually at the same time owner of
that business and manager of the same.
2. The second one, the early scientific management, has emerged based on the papers of
Frederick Taylor and Henri Fayol, and was mainly focused on increasing the production level of
the organisation in terms of both quantity and quality. This has driven to what we know today as
the Classical School of Management, that remained even nowadays a reference point in the
management economic thinking.
3. The third one, the effective scientific management, is based on the research of Elton Mayo
from Harvard University. It relaunches the idea originating in the above mentioned economic
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 thinking, but focuses this time rather on the importance of human resources in achieving a high
level of efficiency at organisational level. In such respect, everything originates in the theory of
motivation, which is very important for achieving a high level of production, both in
quantitative and qualitative terms. This is the moment when we assist to the emergence of the
Post-Classical Management School, the Systemic Management School and the Human
Management School (behavioural, psychological, sociological, etc…)
The main characteristics of the scientific management (contemporary management) are as
follows:
• It is an interdisciplinary science, as it takes over different concepts and ideas from other
economic sciences, like economics and finance, but also integrates methods and techniques
specific to non-economic sciences, such as statistics, psychology, sociology and so on.
• It is an open system, as it is interrelated with other economic or non-economic systems, however
being bordered because, after all, we talk about the existence of a stand-alone management
system.
• It is, as underlined by Koontz and O’Donnell, the most inexact of sciences, as it deals with
highly complex processes and phenomena, the decisions having sometimes to be made based on
the intuition of managers.
• It does not provide managers with an universal pattern, with a best always applicable way to
follow, the decisions being recommended to be made based on the specificities of each and every
particular case, however considering some general guidelines that might orient the activity of
managers.
Basis of analyses of the management processes and relationships, the management science
synthesises and formulates different laws governing the management activity, laws designated by
Taylor as management principles. Such principles are in fact requirements intercorrelated and inter-
conditioned based on the type of organisation, the type of activity carried out, and the specific
problems to be solved. Also, they should be observed by both sides, namely by the managing
system and by the managed one, in order to achieve the desired level of efficiency for the
organisation.
These principles can be split into two categories, considering their level of complexity,
namely:
I. General management principles, concerning the entire management system;
II. Specific management principles, concerning a component of the management system (for
instance the quality management).
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 A first classification of the general management principles, made based on the work of
Taylor, contains six elements:
1. Principle of increased efficiency
2. Principle of economic administration
3. Principle of unity, of authority and responsibility
4. Principle of professional competence and motivation of employees
5. Principle of flexibility
6. Principle of participative management

Lecture 5 - 01.11.2018
I. The principle of increased efficiency is related to the idea of increasing the level of
productivity of an organisation by succeeding in creating a larger gap between the effects and
the efforts. This effect-effort relationship is translated into a revenue and expenses one, a high
level of efficiency being there for construe as an increase or a higher level of profit.
II. The principle of economic administration is directly connected to the previous principle as it is
related to the idea of covering the organisation’s expenses and in adding some extra benefits,
namely in getting profit. This principle involves exceeding at a given moment of time the
break-even point, the company being in the position in continuously increasing from that point
on.
III. The principle of unity of authority and responsibility is related to the fact that individuals,
once appointed in a given managing position, are vested with a certain level of authority, but
also have some clearly established responsibilities that they should accomplish. The same
principle is related to the fact that the organisational structure should be clearly defined, so as to
allow for a manager to give orders only to his/her direct subordinates and to be directly
contacted by the same whenever circumstances impose it. The subordinates will accomplish
only the orders received from their direct managers and will respond only before him/her for
their professional actions.
IV. The principle of professional competence and motivation of employees is related on one hand
to having the right person into the right place and, on the other hand, to the fact that the
performance of each individual should be stimulated either by positive or negative motivation.
Such motivation should be selective and progressive, and should be done via financial or non
financial means. In the first case we talk about increases of the wage level or about different

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 bonuses, while in the second one we talk about different forms of appreciation, promotion or
other facilities.
V. The principle of flexibility is related to the capacity of the entire management system to quickly
adapt to the changing circumstances, be they internal or external to the organisation (changes
related to the micro and macro environment). Normally larger an organisation, lower is the level
of flexibility, usually due to the very complex organisational structure. Given the importance of
flexibility, the current trend for large organisations consists in flattening such structure,
therefore decreasing the number of hierarchical levels, thus allowing for a higher adaptation
capacity.
VI. The principle of participative management is related to involving the subordinates not only in
the accomplishment of the established goals, but also in the effective establishment of the same,
the managers being in the position of choosing whether the subordinates will be also effectively
involved in the decision making process or not.

Lecture 7 - 15.11.2018
Another classification of the management principles arising based on the ideas expressed by
Frederick Taylor is as follows:
I. Science, not rule of thumb: this principle says that any managerial decision should be made
based on a serious research and analysis, not just on intuition and experience. By considering
also the scientific issues, the organisation managers will be in the position of making decisions
by realistically considering any possible consequences.
II. Harmony, not discord, this meaning that the manager should do his/her best in order to provide
an environment of trust and understanding for his/her subordinates.
III. Principle of mental revolution, this meaning that any individual working in an organisation
should understand that he/she belongs to the same and that his/her wellbeing will be achieved,
while achieving the wellbeing of the organisation.
IV. Cooperation, not individualism: this means that no matter how tempted we may be in acting
individually and in standing out before our colleagues in terms of efficiency, cooperating with
the same might bring sometimes more advantages both at individual and collective level.
V. Development of the personnel up to the highest level of efficiency: this principle means that
the manager should take care of his/her subordinates in terms of properly identifying the best
job fit for him/her and in terms of properly training the same according to their professional
needs.
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 The 14 principles of Henri Fayol are:
1. Division of work, this meaning that any activity should be split into different sub-activities,
actions, specific tasks, and to assign each of them to those individuals being in the position of
properly accomplishing the same.
2. Principle of authority and responsibility, suggesting that the individual empowered to give
orders and to make decisions in an organisation should be also made responsible for the results
of such orders and decisions. The manager should be also made responsible partly for the
results provided by his/her subordinates based on such orders/decisions, the remainder of such
responsibility being on the side of the subordinates implementing such decisions.
3. Discipline, this meaning that all employees in an organisation, be they managers or
subordinates, should behave properly with one another.
4. Principle of unity of command, suggesting that each individual working in an organisation
(safe for the top manager) has a direct hierarchical chief from whom he/she should receive
orders and before whom he/she should respond as for the activities carried out.
5. Principle of unity of direction, meaning that the effort of the subordinates coordinated by a
manager should be concentrated into the same direction not only in terms of efficiency, but also
in terms of types of activities performed.
6. Principle of subordination of the individual interest to the common interest, meaning that any
worker in an organisation should understand that making the best for the organisation will
normally result sooner or later into the best for themselves.
7. Principle of remuneration, stating that any individual should receive a proper wage level
considering his/her studies and experience, but most important considering the results
effectively obtained for that organisation.
8. Principle of level of centralisation or decentralisation of decisions, meaning that any manager
should find a balance between the decisional poles existing in an organisation so as to render its
activity more efficient. This highly depends on the type of activity carried out in that
organisation, on the size of the same, on the personality of managers, on the potential of
employees and so on. Usually the public companies are rather characterised by centralised
decisions, while the public ones are rather focused on decentralisation. In micro companies (up
to 10 employees) or small companies we usually deal with centralised decisions, while in
medium and large ones with decentralised ones. For organisations with branches and
subsidiaries the level of decentralisation will be always higher than for other companies.

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9. Principle of scalar chain, states that any organisation should clearly delimit and continuously
improve its organisational structure and to make it visible to each and every individual working
in that organisation.
10. Principle of order, this standing not just for physical order, but also for social order, therefore
creating proper conditions for working in efficient terms.
11. Principle of equity, meaning that all individuals working in an organisation, irrespective of
their gender, race, religion, etc… should be equally treated in all respects.
12. Principle of stability of the personnel, stating that a manager should do his/her best in order to
keep his/her subordinates in that company, as the cost involved by training the same and by
allowing them to accommodate to that business environment are significant for that
organisation.
13. Principle of initiative, meaning that the manager should try to involve as much as possible the
subordinates in the establishment of the organisational goals and should allow them to express
their point of view whenever during the implementation of the decisions made for
accomplishing such goals.
14. Esprit De Corps, saying that the manager should be able to create that feeling of loyalty and
devotion within the group managed by him/her.

Lecture 8 - 22.11.2018
THE MANAGEMENT PROCESS
The management process involves specific instruments, methods and techniques, in fact the
labor process is the unity of two sides:
• on one hand the execution side, via which individuals working for that organisation use all other
available resources in order to produce goods and offer services necessary for satisfying the
customers’ needs and thereby the organisational needs;
• on the other hand the management side, via which individuals specifically empowered by
official documents act upon the rest of the employees orienting the same towards a highly
efficient achievement of the organisational goals.
The management process harmonises all components and sub-components of an
organisation, linking the managing system to the managed one. It is the process by which the
organisational goals are established, the available necessary resources are identified and the specific
activities to be carried out for the achievement of such goals are delimited, so as to lay the premises
for performing at high level in that organisation.
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 The management process is characterised by continuity, consistency, cyclicity, dynamism
and relative stability.
• By continuity we understand a constant set of activities carried out by managers without existing
interruption in the matter. If the manager is unavailable for a while, he/she should delegate some
other individual to take care of any managerial related issue instead of him/her.
• Consistency means well-grounded managerial activities laying the premises for an efficient
output arising from the same.
• Dynamism is related to the changing circumstances to which the manager should adapt in order
to adequately perform.
• Cyclicity involves a lot of steps that should be taken by the manager normally in a certain order
that will be resumed for each and every newly established goal.
• Relative stability means that we have some guidelines as to the steps to be taken. All these
guidelines are to be adapted to both the organisational specificities and the changing
environment.
The management process has a low weight within the whole labor process, but given its
complexity and its importance (it potentiating the execution side) it was highly considered by
various specialists in the matter. One of such specialists, called Henri Fayol, identified different
activities specific to the management process and he grouped them considering homogeneity-based
criteria, determining thereby what he called the “management attributes”, or management
functions. In time miscellaneous individuals tried to classify such functions, resulting in different
typologies from 4 to maximum 20 management functions.
However, the most important typology considered even nowadays remains the one first
established by Henri Fayol, namely the one encompassing five such functions: the forecasting
function, the organising function, the coordinating function, the commanding function and the
evaluating and controlling function.
1. THE FORECASTING FUNCTION
The forecasting function allows us to delimit via a set of activities the future framework of
the actions of the organisation, resulting in the formulation of certain organisational goals and the
identification of any necessary resources, as well as of any specific means needed for achieving
such goals. When talking about the forecasting function we talk, in fact, about the use of several
specific instruments supporting the management in such process, namely the diagnosis, the
prognosis, the planning, respectively the programming (or scheduling).

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• The diagnosis helps us in analysing the current standing of an organisation, showing the
position of the same in the overall context at that moment and allowing for identifying some
feasible organisational goals.
• The prognosis is an instrument allowing for the investigation in time of the market trends and of
the company’s potential future evolution, the arising piece of information being at the basis of
the establishment of the organisational development strategies in the medium to long run. At
micro level we usually resort to first degree prognosis, namely the one made for 10 to 15 years.
The results provided by prognosis are just orientative-exploratory, spreading data with
indicative value that should be used with certain reserves, just for orienting the overall activity
of that organisation into certain directions.
• The planning represents a set of activities via which the results provided by diagnosis are
transposed into the ones provided by prognosis, therefore framing the activity of that
organisation as a whole. Usually at micro level we use maximum 5-year planning, it being
subsequently detailed at least for each and every year and for each and every month, considering
the obligation that the organisation has towards the State budget (the tax on profit, paid yearly,
respectively different contributions related to its employees for the health system, social
securities and pensions paid each month), respectively towards its employees (the monthly
wages).
• The programming/scheduling represents a set of actions via which things are delimited with
much more certitude in that organisation in terms of goals, deadlines, specific tasks, specific
jobs and so on, the period for such detailed planning ranging from one month up to sometimes
each and every hour.

Lecture 9 - 29.11.2018
2. THE ORGANISING FUNCTION
The organising function reflects a set of actions meant for the delimitation of the physical
and intellectual labor processes, as well as of the components thereof, and for their grouping by
compartments, work groups, respectively specific jobs. In order to have an efficient organising
function, any organisation should consider the following:
• The implementation of an optimum communication system;
• The identification of a clear and well-balanced organisational structure and its continuous
improvement;

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• The delimitation of the charges, competences and responsibilities of each and every manager and
their inclusion in the organising and functioning set of rules;
• The establishment of the connection between the managing system and the managed one. Here
we have also some so-called instruments, namely the authority, that allows individuals having a
certain position in that organisation to act in one way or another upon the rest of them (the
subordinates). Such authority can be:
- official (or hierarchical), obtained based on an official document;
- professional (or personal, or by merits), got via the leadership-related characteristics of an
individual (knowledge, experience, power of communication, power of persuasion, etc…);
- functional, this one revealing the power held by a certain manager over other managers being
positioned at the same hierarchical line level, or over the subordinates of such manager (for
example the manager of the production control department has some power over the manager
or subordinates of the production department).
Of course that any authority is also accompanied by a related responsibility, the one making
decisions having to respond for everything decided by himself/herself that might affect in one
way or another the well-being of the organisation.

• The delegation of charges reflects the temporary assignment of a certain level of authority
doubled by a related responsibility to an individual working in an organisation, this involving or
not the making of decisions by that designated individual.
• The level of centralisation-decentralisation of decisions, which may be represented by the level of
delegation of charges in an organisation (if the delegated individuals are also empowered to
effectively make decisions) or by the number or volume of power polls reflected either by the
number of management levels or by the number of managers being positioned at the same
hierarchical line level.
3. THE COORDINATING FUNCTION
The coordinating function is represented by a set of activities via which the decisions and
actions of managers and the actions of subordinates are harmonised so as to increase the
performance efficiency being in the position of avoiding the possible threats of the market,
respectively of taking advantage of the opportunities provided by the same as the case may be. In
terms of coordination, the following should be observed:
• The proper communication in all directions (horizontally, vertically, diagonally, etc…);
• An adequate delegation of charges whenever necessary;
• A rational distribution of organisational charges at each hierarchical level;
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• A clear delimitation of the relationships between managers and subordinates.
Cooperation may be unidirectional or multidirectional (also encountered as unilateral,
respectively multilateral). The first one reflects the separate coordination of each and every
subordinate, therefore allows for receiving feedback from the same. The second one, on the other
hand, involves the coordination of the entire group of people.
4. THE COMMANDING FUNCTION
The commanding function represents a set of actions via which the manager makes sure that
the decision made is received as such by his/her subordinates and it is implemented by them. In
order to be efficient, any order should comply with certain requirements, as follows:
• The order should be clearly and simply formulated, so as to be easily understandable by all
subordinates to whom they are given;
• They should not exceed the competences or the execution possibilities of the ones to whom they
are addressed;
• They should be provided in a climate of real discipline in labor and they should be doubled as the
case may be by adequate incentives in accordance with the responsibilities associated with the
accomplishment of such orders. This is about motivation that should be complex (moral and/or
material), should be differentiated, meaning in accordance with the characteristics of each and
every individual, respectively progressive, namely correlated with the contribution of each and
every individual.
5. EVALUATION AND CONTROLLING FUNCTION
This function involves a set of activities meant for comparing the results got as against the
expected ones. The controlling function has two sides: an ascertaining side and a prospective one.
The first one allows us to identify how things have been done, whereas the second one is related to
what we might expect, given the current ascertained standing.
The controlling function has several specific functions by itself, namely the informative one,
the evaluating one, the preventive one and the educative and stimulative one. Overall the controlling
function allows the managers to see if there is need for more employees, for any dismissal or
promotion, for the organisation or not of specific training courses and so on. The control may be:
1. Participative control, involving the participation of the manager together with the controlling
team in checking the status of various aspects in that organisation;
2. Hierarchical specialised control, which is split into several types of control, for instance the
effective hierarchical control (made by the manager over his/her subordinates), the budgetary
control, the financial control, the quality and technical control, and so on.
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 Lecture 10 - 06.12.2018
ORGANISATION AND ORGANISATIONAL ENVIRONMENT
An organisation is represented by a group of individuals, among whom different
interpersonal and pluripersonal structural relationships are established, who are differentiated from
one another based on their authority, status or role and who work all together in order to achieve
some commonly established organisational goals. Any organisation operates based on the labour-
division process and has a rational structure grounded on the hierarchical authority, the latter clearly
delimiting the relationship between the managing system and the managed one, and allowing for a
proper operation of the whole.
Any organisation is characterised by complexity, openness and dynamism:
1. It is complex because it uses miscellaneous resources it turns in the production process into
production factors which it combines into specific manners so as to get goods and/or services
necessary for satisfying the customers’ needs.
2. It is an open system because it enters into contact with the market (external environment) from
a double prospective: on one hand, when taking inputs from the same, and on the other hand
when providing goods and services to the same. We can also say that it is an open system
because the organisation, part of the larger economic and social system, encompassing at its
turn various subsistences, enters into contact with different other systems.
3. Any organisation should be characterised, in order to be efficient, by synergy.
Organisations’ primary goal is to produce goods and/or services. However, considering their
secondary goals, organisations might be split into two categories, namely economic (or pro-profit,
or lucrative) organisations, respectively non-profit organisations, the latter being split into non-
profit non-governmental organisations (meant for serving different people or for defending different
causes) and non-profit governmental organisations (also called public institutions, or public
agencies), meant for providing services to the large public.
I. ECONOMIC ORGANISATIONS (also called companies or firms) unify different individuals
and operate based on various economic, technical, technological, legal and social requirements,
aiming to be as efficient as possible, this being ultimately reflected for them by high levels of
profit. An economic organisation is:
• a social organism, because it puts all together individuals with different psychosocial
structures that try during the work process to align with one another, therefore giving the
image of the whole;

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 • a technical and productive organism, because it has a specific field of activity and it uses
specific inputs which it combines in a specific way, in order to create specific goods/
services to be provided to a specific target market;
• an economic organism, because it manages its own patrimony, trying to get as result as the
selling of its products financial means high enough to cover the related expenses with the
creation of that production and to remain with some extra money, namely profit.
We might say that any company is characterised by a certain level of autonomy and
independence, in all such respects: social, technical and productive, respectively economic.
II. NON-PROFIT ORGANISATIONS are split into governmental and non-governmental ones. In
the first category we include health public institutions, educational public institutions, religious
and cultural institutions and so on, while in the second category we might encounter
foundations, professional associations, sport clubs, etc…
Usually when we talk about non-profit organisations, under either of their forms, we talk about
service-provision institutions. All non-profit organisations getting some benefits as result of the
activity carried out by the same fully distributed not to the ones having set up the said
institutions, but to the ones needing the same in a direct or indirect way.
Non-profit organisations, irrespective of their form, are exempted from the payment of taxes
and fees to the State budget.

Lecture 11 - 13.12.2018
ORGANISATION ENVIRONMENT
Any organisation operates in an internal environment, which is highly influenced by the
stakeholders of the same, namely managers, subordinates, owners, shareholders and so on. This
type of environment can be controlled to a large extent, given that even if we discuss about
uncertainties at this level as well, by the flexibility of the organisation managers, such issues may
easily be directed into the desired way. On the other hand, any organisation operates in a larger
context, reflected by the external environment, which incorporates the micro-environment, the
macro-environment, and the mega-environment.
1. The MICRO-ENVIRONMENT is the type of environment next to the organisation, surrounding
the same and directly impacting on it. Being external, it exerts influences considerably less
controllable by the organisation, this meaning that any such organisation should search for the most
adequate means to adapt to the same.

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 The microenvironment consists mainly in: suppliers, intermediaries, customers, competitors
and public organisms:
- Suppliers are the ones providing an organisation with the necessary production factors, that is
with natural factors, land factors, capital and labor factors.
- Intermediaries are the ones providing different services to the organisation, like transportation,
product selling, publicity and so on. Here we talk, in fact, about the externalisation of certain
activities of the organisation.
- Customers, which may be simple individuals, legal entities or even the State (namely
governmental customers).
- Competitors are the ones trying to provide identical, similar or different types of products to the
same customers, for covering the same types of needs of the latter. If we deal with identical
products or with exchangeable ones (substitutes), we talk about direct competitors. If we discuss
in terms of different products addressed to the same customers, we deal with indirect competitors
(this is mainly encountered when providing services).
- Public organisms are the ones with which any organisation enters in one way or another into
contact when registering, changing some identification items, paying taxes and fees and so on.

2. The MACRO-ENVIRONMENT reflects the high impact forces acting indirectly upon an
organisation and being the least controllable by the latter. When talking about macro-environment
in terms of risks and uncertainties, we delimit three forms of it, namely the stable environment, the
changing environment and the turbulent one.
- The stable environment is characterised by seldom changes easy to anticipate, allowing
organisations to take steps in order to correctly deal with most of such arising circumstances.
This is the most certain and the riskless type of environment, however, unfortunately, less
encountered in real life.
- The changing environment is in exchange the most frequently encountered one, it involving a
high level of uncertainty and a moderate level of risks. This environment is characterised by
frequent changes, often identified as permanent ones, however reasonable in terms of
anticipation, with which flexible companies with an adequate management should normally be
able to face.
- The turbulent environment, on the other hand, is the most uncertain and risky one, being very
difficult, if not impossible, to deal with, even for flexible, well-managed organisations. This type
of environment is characterised by sudden, abrupt, highly unpredictable changes. Fortunately,
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 this environment is less encountered in real life, being specific usually to the high-tech field of
activity.
The elements of the macro-environment impacting indirectly, via the micro-environment,
over the organisation, include several basic components, namely the economic environment, the
technical and technological environment, the demographic environment, the educational, cultural
and social environment, the political environment, the natural and ecological environment and the
legal environment.
I. The economic environment is the one impacting on the organisation by different economic
and financial mechanisms, such as the inflation rate, the unemployment rate, the gross
domestic product, the import level and so on and so forth.
II. The technical and technological environment is highly important, as the access to existing
techniques and technologies, not just domestically but all over the world, is the basis for
innovations, inventions and so on, otherwise said, for progress.
III. The demographic environment, making the distinctions between differently aged people,
between biological genders, geographical locations and so on, affects an organisation from a
double perspective, as individuals affect the same from both their position of consumers and of
employees.
IV. The same double impact is encountered also as concerns the educational, cultural and social
environment, individuals being differentiated from one another and manifesting different types
of buying and consumption behaviours, as well as different forms of behaviours in terms of
employees.
V. The political environment affects normally indirectly any organisation, not just based on the
micro-environment, but also via its influence exerted on other macro-environment factors. For
instance, a political instability might make investors run away from that country, but, on the
other hand, it might fully change some economic indicators (like the inflation rate, for
instance), therefore, strongly impacting on any organisation in miscellaneous ways.
VI. When talking about the natural and ecological environment, we think of the influence exerted
by the organisation in terms of rational use of resources characterised by scarcity on one hand,
and of avoiding pollution, on the other hand.
VII. The legal environment reflects the set of regulations and rules despite of some basic governing
laws affecting an organisation, which might be split into three categories, namely the ones
meant for protecting competition, the ones meant for protecting consumers and the ones meant
for protecting the national interests.
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