MGT 501 TUTORIAL 2: Understanding Internal & External Environment

1. To what does the term mega-environment refer? Describe its five major elements.
The mega or general environment refers to the broad social conditions and trends
impacting an organisation and over which the organisation has little if no control. The five
major elements of mega environment are:
- The Political/legal element refers to legal and governmental systems which impact the
organisation. Legislative trends e.g. in taxation
- The Economic element relates to how wealth is produced, distributed and consumed. E.g.
factories
- Socio-cultural/demographic element refers to the attitudes, norms, beliefs, behaviours and
typical regional demographic trends e.g. delayed marriage
- The Technological element refers to the current knowledge about product and service
generation
- The International element refers to forces outside the organisation’s home country that
impact the organisation’s operation and performance e.g. the global financial crisis (GFC)
2. What is the name of the environment which depends on the organisation's products,
services and operational localities? Describe the elements of this environment.
Task environment depends on the organisations products, services and operational localities.
- Customers/clients are the people and firms who buy the organisations products
and/or services.
- Competitors are other firms offering, or potentially offering rival products and
services.
- Suppliers are companies and people who provide resources to support the
organisation’s operations
- Labour supply/employees consist of the people employable by the organisation and
how to attract, acquire and motivate them.
- Government agencies refer to those government bodies that provide services and
monitor compliance with laws and regulations within the country where the
organisation is operating.
3. How could you distinguish between the mega- and task-environments in terms of
organisational control and workplace diversity?
The mega and task environment are external influences to an organisations and need to be
recognised ,analysed and managed for the business to experience sustained success and
competitive advantage in market whereas in work place diversity the task environment
consists of all the external factors that affect a company including customers, competitors,
suppliers, government regulations, special interest groups, and the labor force itself.
4. In what ways are the population ecology model and the resource dependency model
similar and different?
It is similar through
It is different from each other in terms of their beliefs they hold population ecology model
believes that managers have little control, success dependent on luck and chance whereas
resource development model believes that managers can influence environmental aspects

5. How do environmental uncertainty and bounty, influence you in deciding whether

managers see the environment as an objective reality or a subjective reality?
Environmental uncertainty and bounty influences in deciding whether the managers see
the environment as an objective or subjective reality through the introduction of lots of
assumption and biases

6. In relation to managing environmental elements, what specific examples show the

differences among the adaptation, favourability influence and domain shift approaches?
Adaptation to the environment using such approaches as:
a) Buffering or stockpiling inputs or outputs from a production or service
process to overcome environmental variations.
b) Smoothing or acting to reduce the environmental influence e.g. using
electricity at the weekend when it is cheaper.
c) Forecasting or attempting to predict conditions and future events that are
likely to impact the business.
d) Rationing or limiting access to a high demand product or service so that the
organisation does not have to expand.
Favourability influence i.e. trying to change the environment to make them match
organisational needs. This is done by:
1. Using mass media (i.e. advertising), to publicise products and services.
2. Boundary spanning i.e creating organisational roles to interface with major
environmental elements.
3. Recruiting those with a close tie to a major influencing environmental element e.g.
recruiting someone who is influential with the government to work in your
organisation.
4. Negotiating contracts or seeking favourable agreements with significant others on
significant issues.
5) Co-opting or absorbing key members of important environmental elements into the
organisation’s leadership or policy-making structure.
6) Strategic alliances where two or more organisations form a cooperative partnership to
gain market access, achieve production or marketing economies of scale to reduce cost,
perform joint research or share technological.
7) Form or join trade associations in order to work with likeminded individuals or firms on
common business concerns.
8) Political activity – joining together with others to influence political issues in ways that
favour the organisation.
Domain shifts or changing the product or service mix so that the environmental elements an
organisation confronts are more favourable
7. Organisational culture is said to determine a company's success or failure. What
would you look for to identify the nature of a company's culture and how the culture is
celebrated?
The nature of a company can be identified through direction, pervasiveness and strength and
the culture is celebrated though rites, rituals and ceremonies
8. What behaviours and processes can a leader adopt to change the culture of an
organisation?
1) Surfacing actual norms i.e. in a workshop getting employees to list the
organisational behavioral norms that they think influence their attitudes and actions.
2) Articulating new directions i.e. getting the employees to discuss the organisation’s
present direction and the behaviors needed for organisational success.
3) Establishing new norms i.e. the employees develop a list of new norms that will
have a positive impact on organisational effectiveness.
4) Identifying culture gaps i.e. identifying next gaps between the actual norms and
those that are needed to enhance organisational effectiveness.
5) Closing the gap i.e. agreeing on new norms and ways to reinforce them e.g.
developing reward systems and encouraging members to follow the new norms.