Professional Documents
Culture Documents
Environmental Forces
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
PPT
Environmental Forces
Business Environment Task Environment Competitive Forces in the Task Environment Technological Forces Political and Legal Forces
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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3.2
Organization
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Sometimes called the macro-environment. Are external factors, such as inflation and demographics, that usually affect indirectly all or most organizations.
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Type of economic system and economic conditions Type of political system Condition of the ecosystem Demographics Cultural Background
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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In the US, the government acts as a watchdog over business Provides direction in areas such as: antitrust, monetary policy, defense, human rights environmental matters
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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The US has an economic system in which there are: privately controlled markets based on supply and demand free market competition private contracts profit incentives technological advancement
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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The Ecosystem
There is a renewed commitment to the environment in the US 1981 - 4% wanted environmental improvements 1997 - 80% want improvements
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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3.3
Cut back on environmentally unsafe operations Compensate for environmentally risky endeavors Avoid confrontation with state and federal pollution control agencies Comply early with government regulations Promote new manufacturing technologies Recycle wastes
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
PPT
Demographics
Characteristics of a population such as age, race, gender, ethnic origin, and social class determine the characteristics of work groups, organizations, specific markets, or nations population. Demographics influence marketing, advertising, and human resources decisions. Such as the number of individuals the ages of 18 to 25 They change all the time.
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
PPT
Cultural Forces
Culture is the shared characteristics, values, and beliefs of a group that distinguishes them from another group Such as religion, language, and heritage
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
PPT
3.5
Hofstedes Framework
Power distance
Degree to which influence/control are unequally distributed among individuals within a particular culture salary differentiation from CEO to front line employees Degree to which members of a society attempt to avoid ambiguity, riskiness, and indefiniteness of future Extent to which society expects people to take care of themselves and their immediate families And/or the degree to which individuals believe they are masters of their own destiny
Uncertainty avoidance
Individualism
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
PPT
3.6
Collectivism
Measures tendency of group members to focus on the common welfare and feel loyalty toward one another Degree to which acquisition of money and things is valued and high quality of life for others is not Stability of society is based on unequal relationships Family is the prototype of all organizations People should treat others as they would like to be treated
Masculinity
Confucian dynamism
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
PPT
3.8
few quite similar to each other basically the same over time
few somewhat similar to each other continually changing Example: Fast-food outlets
numerous not similar to each other basically the same over time
STABLE
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
CHANGING
Adapted from Figure 3.3
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3.6
Environmental Uncertainty
governmental regulations
competition stability of inputs
demand characteristics
e.g.
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Turbulent Environment
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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3.9
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Competitors
competitors are an important day-to-day environmental force facing organizations rivalry among competitors leads to
price cutting advertising promotions enhanced customer service or warranties improvements in product or service quality
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
PPT
New Entrants
product differentiation
uniqueness in quality, price, design, brand image, or customer service that gives a product an edge over the competition
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
PPT
capital requirements
dollars needed to finance equipment supplies, advertising, R&D, and the like necessary to start may bar or severely restrict potential new entrants to an industry
government regulation
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Goods/Services
that can easily replace the firms goods/services I.e. Starbucks introduced a new drink called Frappuccino. It is a cold drink that can substitute for the more traditional hot coffee drink
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Customers
they may drive down prices push for more or higher-quality products increase competition among sellers by playing one against each other
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Integration
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Customers cont...
they purchase a large volume relative to the suppliers total sales the product/service represents a significant expenditure by the customer they pose a realistic threat of backward integration, for example: the purchase of one or more of its suppliers they have readily available alternatives for the same services/products
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Suppliers
raise prices above their costs reduce the quality of goods and services
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Impact of Technology
What is technology?
used to transform material , information, and other inputs into finished goods and services
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999
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Role in Strategy : creates strategic options not feasible with older technologies
Hellriegel, Jackson, and Slocum MANAGEMENT, 8E South-Western College Publishing Copyright 1999