19/02/2024

General Management and

Business Environment
Introduction

Virginie Pez
Full Professor – Université Paris-Panthéon-Assas

What to expect from this seminar

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• This course attemps to sensitize you to general management and to the
importance of understanding a business environment before making corporate
decisions.

• You are expected to be able to feel comfortable when investing a new managerial
situation, and to develop an understanding of factors that shape managerial
decisions.

• You will study a few authors and concepts derived from Organization Theory :
Mintzberg, Fayol, Taylor, Etzioni…

• Then, this course provides both concepts and strategic/operational tools and that
will allow you to develop a strategic response for effective corporate management.

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What to expect from this seminar

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Culture
Power and
authority Innovation

Structure
Motivation
and KPI

Decision

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Agenda

Day Date Focus Objectives

Day 1. Monday 17th Chapter 1. The functional Be able to introduce yourself in a business context:
areas within companies - In a new team that you just entered (long-term
perspective)
Be able to know the basics of the roles of each of
your colleagues within the organization according
to their title.

Chapter 2. The company and Understand how the environment shape corporate
its environment decision-making
Day 2. Tuesday 18th Chapter 3. Organizational Mintzberg and the 5 types of organizational
structures structures. How they affect performance.
Day 3. Wednesday 19th Chapter 4. Organizational Edgar Schein’s model to study organizational
culture culture and how it affects performance.
Day 4. Thursday 20th Chapter 5. Authority, Power, The concepts of power (Weber), authority and
and Motivation motivation (Etzioni, Herzberg)
Day 5. Friday 21th Revise, play and do the FINAL EXAM!
TOTAL 25h

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Agenda

Day Date Focus Objectives

Day 1. Monday 17th Chapter 1. The functional Be able to introduce yourself in a business context:
areas within companies - In a new team that you just entered (long-term
perspective)
Be able to know the basics of the roles of each of
your colleagues within the organization according
to their title.

Chapter 2. The company and Understand how the environment shape corporate
its environment decision-making
Day 2. Tuesday 18th Chapter 3. Organizational Mintzberg and the 5 types of organizational
structures structures. How they affect performance.
Day 3. Wednesday 19th Chapter 4. Organizational Edgar Schein’s model to study organizational
culture culture and how it affects performance.
Day 4. Thursday 20th Chapter 5. Authority, Power, The concepts of power (Weber), authority and
and Motivation motivation (Etzioni, Herzberg)
Day 5. Friday 21th Revise, play and do the FINAL EXAM!
TOTAL 25h

The assessment for this seminar

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Exam Group
60% presentations
(during the
sessions)
40%

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A few prerequisites for oral presentations

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To give a good oral presentation, you need to pay attention to several points.

1 Adopt confident body language

 Stand straight, head high,

Adopting confident body language
shoulders back
 Smile and pause before starting to
prepare your audience

A few prerequisites for oral presentations

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To give a good oral presentation, you need to pay attention to several points.

2 Make appropriate pauses

 Make pause to give your audience
time
Adopting confident body to digest the information
language

 Make it easier to follow and help

structure your speech

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A few prerequisites for oral presentations

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To give a good oral presentation, you need to pay attention to several points.

3 Maintain eye contact with the

audience
You'll
body
Adopting confident put
language them at ease and
facilitate communication
 Don’t fixate ; scan the room with
your gaze

A few prerequisites for oral presentations

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To give a good oral presentation, you need to pay attention to several points.

4 Speak loud and articulate

 Ensure that you pronounce each
word
Adopting confident body clearly, take your time
language

 The quality of your diction will

affect the audience's
understanding and engagement

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A few prerequisites for oral presentations

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To give a good oral presentation, you need to pay attention to several points.

5 Practice!
 Experience and practice are the
best
Adopting confident body ways to improve your public
language
speaking skills
 Prepare in advance and repeat

A few prerequisites for oral presentations

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To give a good oral presentation, you need to pay attention to several points.

6 Use paper, not smartphone

 It’s ok to have notes on a piece of
paper
Adopting confident body language

 But please avoid reading on your

smartphone!

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Your turn!

Exercise #1. Imagine that you are entering a new team / new business environment
in a Western context.
Your boss would like you to introduce yourself to the rest of the company. As you
come from a different culture, he suggests that you take the time to talk about :
• your background (studies, past experiences)
• your way of living
• your hobbies
• the things you like
• And anything you think is a good description of you.

The objective is that your colleagues can know you better and adjust the best way to
work with you for more business efficiency.

Please take until 30 minutes to prepare an individual PowerPoint presentation and

get ready to present it in front of your teacher and classmates.
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15 MIN BREAK

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General Management and

Business Environment
Chap 1. The functional areas within companies, the micro and macroenvironment

Virginie Pez
Full Professor – Université Paris-Panthéon-Assas

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The different roles within aexemple
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• Once a business has been properly established and has taken on a reasonable number of employees, the organizational
structure will involve the business being splits into number of different departments, each of which has a specific job or
task to do - these are called 'functions’.

 What functions do you know ?

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Henri Fayol

• Henri Fayol was a French mining engineer, mining executive,

and management theorist.

• He wrote the first book in Management in history :

“Administration industrielle et générale » published in
1916.

• In this book, he describes 6 functions : Operations ; Sales ;

Finance ; Support and safety ; Accounting ; Administration.

• Died in Paris in 1925.

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Key activities at a glance

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Exercise #2. Be clear about the different roles within an organiza on!

Please pick a paper and make some research on each role. Please introduce yourself
as if you were playing the role in a company.

Start with:
- Formal greetings: “hello”, “good morning”, “good afternoon”, “good evening”
- Name: “my name is…”
- Position and company: “I work at Google in the marketing department”
- Brief job description: “My job consists in…”
- Thank you: “I am very glad to meet you and I’m looking forward to working with
you”

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The different roles within aexemple
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1 Human Resources Management

What it does:

• Responsible for all aspects of managing the people who work in a business

• Main activities:
• Organise hiring employees (recruitment)
• Set up and manage employment rules
• Organise employee training & appraisal
• Monitor the working conditions for employees
• Manage communication with staff
• Ensure business complies with employment-related legislation…

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The different roles within aexemple
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2 Marketing

What it does:

• Responsible for understanding the needs and wants of customers

• Main activities:
• Research into the market
• New product development
• Development and delivery of promotional campaigns
• Setting and monitoring prices
• Ensuring suitable distribution
• Obtaining and auctioning customer feedback…

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The different roles within aexemple
company client…

3 Production / Operations

What it does:

• Organises the transformation process that turns inputs (e.g. materials, people) in finished
goods and services

• Main activities:
• Organising suitable method of production
• Controlling the use of inputs to produce efficiently
• Managing the quality of finished output

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The different roles within aexemple
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4 Accounts / Finance

What it does:

• Manages the financial resources of the business and reports on the financial position &
performance

• Main activities:
• Allocating and monitoring the use of financial resources through budget
• Ensuring business has sufficient cash to enable it to pay its liabilities as they fall due
• Reporting on financial performance
• Ensuring business meets legal requirements re financial reporting

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How do Business functions interrelate with other business functions

• The functional areas must communicate effectively with one another if a business is to
operate successfully.

• The consequences of poor relationships between business functions: Poor interrelations

between business functions may affect the company’s performance.

• Ex 1. If the sales function receives a large order from a customer but does not inform
the operations management function that output needs to be increased, there may
not be sufficient products available for delivery on time.

• Ex 2. Finance will also be affected by sales: either increased revenue or a cash flow
problem if there is not enough money to buy all the new additional stock and
materials.

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General Management and

Business Environment
Chap 2. Understand how the environment shape corporate decision-making

Virginie Pez
Full Professor – Université Paris-Panthéon-Assas

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Objectives of Chapter 2Un exemple de relation client…

• In this chapter, you’ll see that general management operates in a complex and changing environment.

• Actors in this environment—suppliers, intermediaries, customers, competitors, publics, and others—may work with or
against the company.

• Major environmental forces—demographic, economic, natural, technological, political, and cultural—shape corporate
opportunities, pose threats, and affect the company’s ability to build customer relationships.

• To make effective corporate strategies, a company must first understand the environment in which you operate.

• Objective of Chapter 2 is to describe the environmental forces that affect the company’s ability to make strategic
decisions.

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1. The Microenvironment

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Overview of the microenvironment

Companies must partner with

other firms in the company’s
value delivery network.

Customers are the most

important actors in the
company’s
microenvironment.
Managers must work The aim of the entire
in harmony with all value delivery system is
Micro- to serve target
company departments environment
customers and create
strong relationships with
them.

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1. The Company

• In designing corporate strategy, management takes other company groups into account

• These groups can be top management, finance, research and development (R&D), marketing, purchasing, operations,
and accounting.

•  All of these interrelated groups form the internal environment.

• Top management sets the company's mission, objectives, broad strategies, and policies.

• It should care about the corporate culture, human resources management, the physical assets, profit and cash flow, etc.

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2. The Suppliers

• Suppliers form an important link in the company's overall value creation network. Ex1:
COVID19
• They provide the resources needed by the company to produce its goods and services.

• Supplier problems can seriously affect the company. Managers must watch supply availability and costs. Supply
shortages or delays, labor strikes, natural disasters, and other events can cost sales in the short run and damage
customer satisfaction in the long run. Rising supply costs may force price increases that can harm the company's sales
volume.

• Most companies today treat their suppliers as partners in creating and delivering customer value. For example, giant
Swedish furniture retailer IKEA doesn't just buy from its suppliers. It involves them deeply in the process of delivering a
stylish and affordable lifestyle to IKEA's customers.

Ex3: Ex2:
NUTELLA TESLA

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2. The Suppliers - The example of IKEA

• IKEA's biggest obstacle to growth isn't opening new stores and attracting
customers.

• Rather, it's finding enough of the right kinds of suppliers to help design
and make all the products that customers will carry out of its stores.

• IKEA currently relies on more than 2,000 suppliers in 50 countries to

stock its shelves.

• It must systematically develop a robust network of supplier-partners

that reliably provide the 12,000 items it stocks.

• Then they find and work closely with key suppliers to bring that
proposition to market. Thus, IKEA does more than just buy from
suppliers. It involves them deeply in questions of quality, design, and
price to create the kinds of products that keep customers coming back
again and again.

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3. Intermediaries

Ex:
• The intermediaries help the company promote, sell, and distribute its products to final AMAZON
buyers.

• They include resellers, physical distribution firms, marketing services agencies, and financial
intermediaries.

• Resellers are distribution channel firms that help the company find customers or make sales to them.

• Selecting and partnering with resellers is not easy. They face large and growing reseller organizations,
such as Walmart, Target, Home Depot, Costco, Best Buy in the US, and digital players such as Amazon.

• These organizations frequently have enough power to dictate terms or even shut smaller
manufacturers out of large markets.

• Like suppliers, intermediaries form an important component of the company's overall value delivery
network. In its quest to create satisfying customer relationships, the company must do more than just
optimize its own performance. It must partner effectively with intermediaries to optimize the
performance of the entire system.

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3. Intermediaries – TheUn exemple
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• Coca-Cola conducts a staggering amount of research on beverage consumers

and shares these insights with its partners.

• It analyzes the demographics of U.S. zip code areas and helps partners
determine which Coke brands are preferred in their areas.

• Coca-Cola has even studied the design of drive-through menu boards to better
understand which layouts, fonts, letter sizes, colors, and visuals induce
consumers to order more food and drink.

• Based on such insights, the Coca-Cola Food Service group develops tools that
help its retail partners improve their beverage sales and profits. Its Web site,
ww.CokeSolutions.com, provides retailers with a wealth of information,
business solutions, merchandising tips, and techniques on how to go green.
"We know that you're passionate about delighting guests and enhancing their
real experiences on every level," says Coca-Cola to its retail partners. "As your
partner, we want to help in any way we can." Such intense partnering has
made Coca-Cola a runaway leader in the U.S. fountain-soft-drink market.

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4. Competitors

• To be successful, a company must provide greater customer value and satisfaction than its competitors
do.

• Thus, managers must do more than simply adapt to the needs of target consumers.

•  They also must gain strategic advantage by positioning their offerings strongly against competitors'
offerings in the minds of consumers.

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5. Publics

• The company's marketing environment also includes various publics. A public is any group that has an actual or
potential interest in or impact on an organization's ability to achieve its objectives. We can identify six types of
publics:

1. Financial publics: influences the company's ability to obtain funds. Banks, investment analysts, and stockholders are
the major financial publics.
2. Media publics: carries news, features, and editorial opinion: newspapers, magazines, television stations, and blogs
and other Internet media.
3. Government publics: Law and public policies: managers must often consult the company's lawyers on issues of
product safety, truth in advertising, and other matters.
4. Citizen-action publics: A company's decisions may be questioned by consumer organizations, environmental groups,
minority groups, and others.
5. General public. A company needs to be concerned about the general public's attitude toward its products and
activities. The public's image of the company affects its buying.
6. Internal publics. includes workers, managers, volunteers, and the board of directors. Large companies use
newsletters and other means to inform and motivate their internal publics. When employees feel good about the
companies they work for, this positive attitude spills over to the external publics.

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6. Customers

• The most important actors in the company's microenvironment !

• The aim of the entire value delivery network is to serve target customers and create strong relationships with them.

• 5 types of customer markets.

1. Consumer markets = individuals and households that buy goods and services for personal consumption.
2. Business markets = buy goods and services for further processing or use in their production processes
3. Reseller markets = buy goods and services to resell at a profit.
4. Government markets = government agencies that buy goods and services to produce public services or transfer the
goods and services to others who need them.
5. International markets = buyers in other countries, including consumers, producers, resellers, and governments.

Each market type has special characteristics that call for careful study by the seller.

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15 MIN BREAK

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2. The Macroenvironment

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Overview of the macroenvironment

The company and all of the other actors operate in a larger macroenvironment of forces that shape opportunities and
pose threats to the company.
Managers also want
to be socially
Concern for the natural
responsible citizens
environment has spawned a so-
in their markets and
called green movement. For
communities. For
example, last year HP recovered
example, shoe brand
and recycled 800 jumbo jets
TOMS was founded
worth of electronics globally
on a cause: "No
complicated
Changing demographics mean formulas. It's ...
changes in markets and simple," says the
strategies. For example, Merrill company's founder.
Lynch targets aging baby ''You buy a pair of
boomers to help them overcome TOMS and I give a
the hurdles to retirement pair to a child on
planning. your behaff."

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1. The Demographic environment

• For example, the U.S. population currently stands at more than 313 million and may reach almost 364 million by
2030.

 How is the demographic environment in Vietnam? 

• The single most important demographic trend in Western cultures is the changing age structure of the population.

• Several generational groups, amongst the baby boomers, Generation X, and the Millennials.

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2. The Demographic environment

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3. The Economic environment

• Markets require buying power as well as people.

• The economic environment consists of economic factors that affect consumer purchasing power and spending
patterns.

• Managers must pay close attention to major trends and consumer spending patterns both across and within their
world markets.

• Consumers have now adopted a back-to-basics sensibility in their lifestyles and spending patterns that will likely
persist for years to come. They are buying less and looking for greater value in the things that they do buy.

• Managers in all industries are looking for ways to offer today's more financially frugal buyers greater value-just the
right combination of product quality and good service at a fair price.

• Ex: Target slogan = “Expect More, Pay less”

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4. The Natural environment

• The natural environment involves the physical environment and the natural resources that are needed as inputs by
managers or that are affected by activities.

• At the most basic level, unexpected happenings in the physical environment-anything from weather to natural
disasters-can affect companies and their strategies.

• => Example, a recent unexpectedly warm winter put the chill on sales of products ranging from cold-weather
apparel to facial tissues and Campbell's soups.
• => In contrast, the warmer weather boosted demand for products such as hiking and running shoes, house paint,
and gardening supplies.
• => Similarly, the damage caused by the earthquake and tsunami in Japan had a devastating effect on the ability of
Japanese companies such as Sony and Toyota to meet worldwide demand for their products.

• Although companies can't prevent such natural occurrences, they should prepare contingency plans for dealing with
them.

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4. The Natural environment

• At a broader level = issues of sustainability and global warming

• Growing shortages of raw materials (coal, oil, gas…)

• Air and water pollution

• => increased government intervention in natural resource management. The governments of different countries
vary in their concern and efforts to promote a clean environment. Some, such as the German government,
vigorously pursue environmental quality. Others, especially many poorer nations, do little about pollution, largely
because they lack the needed funds or political will.

• => The general hope is that companies around the world will accept more social responsibility and that less
expensive devices can be found to control and reduce pollution.

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5. The Technological environment

• The technological environment is perhaps the most dramatic force now shaping our destiny.

• A double-sword issue for managers :

Ex : think about having tiny little transmitters implanted in all the products you buy, which would allow tracking of the
products from their point of production through use and disposal

 On the one hand, it would provide many advantages to both buyers and sellers.

 On the other hand, it could be a bit scary. Ex: Uber, Grab:

problems with
data privacy

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6. The Political and Social environment

• The political environment consists of laws, government agencies, and pressure groups that influence or limit various
organizations and individuals in a given society.

• Well-conceived regulation can encourage competition and ensure fair markets for goods and services.

• Many countries have many laws covering issues such as competition, fair trade practices, environmental protection,
product safety, truth in advertising, consumer privacy, packaging and labeling, pricing, and other important areas.

• Several reasons :
1. Protect companies from each other (laws are passed to define and prevent unfair competition)
2. protect consumers from unfair business practices (some firms, if left alone, would make shoddy products,
invade consumer privacy, mislead consumers in their advertising, and deceive consumers through their
practices)
3. protect the interests of society against unrestrained business behavior (Profitable business activity does not
always create a better quality of life. Regulation arises to ensure that firms take responsibility for the social
costs of their production or products.

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7. The Cultural environment

• The cultural environment consists of institutions and other forces that affect a society's basic values, perceptions,
preferences, and behaviors.

• People grow up in a particular society that shapes their basic beliefs and values. They absorb a worldview that
defines their relationships with others.

• Examples of cultural characteristics that can affect business decisions:

 People's Views of Themselves (People vary in their emphasis on serving themselves versus serving others.
Some people seek personal pleasure, wanting fun, change, and escape. Others seek self-realization through
religion, recreation, or the avid pursuit of careers or other life goals. Some people see themselves as sharers
and joiners; others see themselves as individualists.)
 People's Views of Others.
 People's Views of Society. (People vary in their attitudes toward their society-patriots defend it, reformers
want to change it, and malcontents want to leave it. People's orientation to their society influences their
consumption patterns and attitudes toward the marketplace).

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Tool that you can use toUn exemple
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the macroenvironment

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Exercise #2. Describe the macroenvironment in Vietnam using PESTEL

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Bring a pair of scissors tomorrow please if you have one!

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