Managing in the Global

Environment
Facilitator: Naya Hapsari, M.Sc.

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 Global Organizations

• Global organization
– An organization that operates and competes in
more than one country
– Uncertain and
unpredictable

Copyright Polka Dot Images/Jupiterimages

 What Is the Global Environment?

• Global environment
– The set of global forces and conditions that
operates beyond an organization’s boundaries but
affects a manager’s ability to acquire and utilize
resources
Figure 6.1 Forces in the Global
Environment

Jump to Appendix 1 for

description
What Is the Global Environment? (1 of 2)

• Task environment
– The set of forces and conditions that originates
with suppliers, distributors, customers, and
competitors and affects an organization’s ability to
obtain inputs and dispose of its outputs
– Influence managers daily
What Is the Global Environment? (2 of 2)

• General environment
– The wide-ranging global, economic, technological,
sociocultural, demographic, political, and legal
forces that affect an organization and its task
environment
 The Task Environment (1 of 6)

• Suppliers
– Individuals and organizations that provide an
organization with the input resources that it needs
to produce goods and services

• Raw materials, component parts, employees

 The Task Environment (2 of 6)

• Global outsourcing
– The purchase or production of inputs or final
products from overseas suppliers to lower costs
and improve product quality or design
 The Task Environment (3 of 6)

• Distributors
– Organizations that help other organizations sell
their goods or services to customers

• Powerful distributors can limit access to markets

through its control of customers in those markets.
 The Task Environment (4 of 6)

• Customers
– Individuals and groups that buy goods and
services that an organization produces

• A manager’s ability to identify an organization’s main

customer groups, and make the products that best
satisfy their particular needs, is a crucial factor
affecting organizational and managerial success.
 The Task Environment (5 of 6)

• Competitors
– Organizations that produce goods and services
that are similar to a particular organization’s
goods and services

• Rivalry between competitors is potentially the

most threatening force that managers deal with.
 The Task Environment (6 of 6)

• Barriers to entry
– Factors that make it difficult and costly for the
organization to enter a particular task
environment or industry
 Barriers to Entry

• Economies of scale
– Cost advantages associated with large operations
• Brand loyalty
– Customers’ preference for the products of
organizations currently existing in the task
environment
• Government regulations that impede entry
Figure 6.2 Barriers to Entry and
Competition
 The General Environment (1 of 6)

• Economic Forces
– Interest rates, inflation, unemployment, economic
growth, and other factors that affect the general
health and well-being of a nation or the regional
economy of an organization
 The General Environment (2 of 6)

• Technology
– The combination of skills and equipment that
managers use in designing, producing, and
distributing goods and services

© Comstock/Stockbyte/Getty Images RF
 The General Environment (3 of 6)

• Technological Forces
– Outcomes of changes in the technology that
managers use to design, produce, or distribute
goods and services
 The General Environment (4 of 6)

• Sociocultural Forces
– Pressures emanating from the social structure of a
country or society or from the national culture
 Sociocultural Forces

• Social structure
– The traditional system of relationships established
between people and groups in a society
• National culture
– The set of values that a society considers
important and the norms of behavior that are
approved or sanctioned in that society
 The General Environment (5 of 6)

• Demographic forces
– Outcomes of change in, or changing attitudes
toward, the characteristics of a population, such
as age, gender, ethnic origin, race, sexual
orientation, and social class
 The General Environment (6 of 6)

• Political and legal forces

– Outcomes of changes in laws and regulations,
such as deregulation of industries, privatization of
organizations, and increased emphasis on
environmental protection
 Process of Globalization

• Globalization
– The set of specific and general forces that work
together to integrate and connect economic,
political, and social systems across countries,
cultures, or geographical regions so that nations
become increasingly interdependent and similar
 Four Principal Forms of Capital (1 of 3)

• Human capital
– The flow of people around the world through
immigration, migration, and emigration
• Financial capital
– The flow of money capital across world markets
through overseas investment, credit, lending, and
aid
 Four Principal Forms of Capital (2 of 3)

• Resource capital
– The flow of natural resources, parts, and
components between companies and countries,
such as metals, minerals, lumber, energy, food
products, microprocessors, and auto parts
 Four Principal Forms of Capital (3 of 3)

• Political capital
– The flow of power and influence around the world
using diplomacy, persuasion, aggression, and force
of arms to protect the right or access of a country,
world region, or political bloc to the other forms
of capital
 The Role of National Culture (1 of 2)

• Values
– Ideas about what a society believes to be good,
right, desirable and beautiful
– Provide the basic underpinnings for notions of
individual freedom, democracy, truth, justice,
honesty, loyalty, love, sex, marriage, etc.
 The Role of National Culture (2 of 2)

• Norms
– Unwritten, informal codes of conduct that
prescribe how people should act in particular
situations and are considered important by most
members of a group or organization
– Folkways, mores
 Norms

• Mores
– Norms that are considered to be central to the
functioning of society and to social life
• Folkways
– The routine social conventions of everyday life
Hofstede’s Model of National Culture (1 of 5)

• Individualism
– A worldview that values individual freedom and self-
expression and adherence to the principle that people
should be judged by their individual achievements
rather their social background
• Collectivism
– A worldview that values subordination of the
individual to the goals of the group and adherence to
the principle that people should be judged by their
contribution to the group
Hofstede’s Model of National Culture (2 of 5)

• Power distance
– Degree to which societies accept the idea that
inequalities in the power and well-being of their
citizens are due to differences in individuals’
physical and intellectual capabilities and heritage
Hofstede’s Model of National Culture (3 of 5)

• Achievement orientation
– A worldview that values assertiveness,
performance, success, and competition
• Nurturing orientation
– A worldview that values the quality of life, warm
personal friendships, and services and care for the
weak
Hofstede’s Model of National Culture (4 of 5)

• Uncertainty avoidance
– The degree to which societies are willing to
tolerate uncertainty and risk
• Low uncertainty avoidance cultures are easygoing,
value diversity, and tolerate differences in personal
beliefs and actions.
• High uncertainty avoidance societies are more rigid
and expect high conformity in their citizens’ beliefs
and norms of behavior.
Hofstede’s Model of National Culture (5 of 5)

• Long-term orientation
– A worldview that values thrift and persistence in
achieving goals
• Short-term orientation
– A worldview that values personal stability or
happiness and living for the present
 Reference

Jones, G.R., dan George, J.M. 2019.

Contemporary Management, 11th Edition. NY:
McGraw-Hill.
 Terima Kasih

Constant and frequent questioning is the first key to wisdom …

[Ibnu Sina]

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