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BASIC MANAGEMENT - Course

Recommended Text Book:


Management A Functional Approach by Joseph M. Putti, McGraw
Hill Book Company

Chapters:
The Environment of Business
The Nature and Meaning of Management
The Planning Function
The Organizing Function
The Controlling Function
The Staffing Function
Motivating Employees
Participation in Organizations

Marks Distribution
Metric

Assignments/Project
Quizzes
Class Participation & Attendance
Mid-Term Exam
Final Exam

Final Evaluation

Marks

10
10
5
25
50

100

The Environment of
Business

Introduction to Management &


Organization

What is Management?
- Formal Definitions:

The attainment of organizational goals in an effective and


efficient manner through planning, organizing, leading and
controlling organizational resources (Daft & Marcic)
the process of coordinating work activities so that they are
completed efficiently and effectively with and through other
people (Robbins)
A set of activities directed at an organizations resources with
the aim of achieving organizational goals in an efficient and
effective manner (Griffin)

What is an Organization?
- Formal Definitions:

A social entity that is goal directed and deliberately


structured (Daft & Marcic)
A deliberate arrangement of people to accomplish some
specific purpose (Robbins)
A group of people working together in a structured and
coordinated fashion to achieve a set of goals (Griffin)

What is a Business Environment?


Business environment encompasses all those factors that affect a
company's operations; including customers, competitors, suppliers,
distributors, industry trends, substitutes, regulations, government
activities, the economy, demographics, social and cultural factors,
innovations, and technological developments. It may also be referred
to as Operating environment.

What is a System?
A system is one which has interrelated parts and functions as a whole.
There are several departments or units in a business organization which
are all interrelated and the organization functions as one system.

SYSTEMS MODEL OF
ORGANIZATION

Types of System
Open System
An open system is one that interacts with its environment and thus
exchanges information, material, or energy with the environment,
including random and undefined inputs. Open systems are adaptive
in nature as they tend to react with the environment in such a way
organizing', in the sense that they change their continued existence.
Such systems are self organizing, because they change their
organization in response to changing conditions.
Closed System
A closed system is one, which doesnt interact with its environment.
Such systems, in business world, are rare. Thus the systems that are
relatively isolated from the environment but not completely closed
are termed closed systems.

EMERY & TRISTs Classification of


Environments
They offer a model that identifies four kinds of environments that
organizations might confront:
1.
2.
3.
4.

Placid-randomized: resources unchanging, random distribution


Placid-clustered: resources unchanging, but location becomes
important for survival
Disturbed-reactive: org. strategy is to get resources important for
survival)
Turbulent-field: all actors are interconnected, and overall field
becomes an important force

Placid-randomized is least complex, turbulent-field is


the most complex.

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PLACID-RANDOMIZED ENVIRONMENTS
This environment is relatively unchanging. Therefore, environmental
uncertainty is low. Environmental demands are distributed randomly, and
change slowly.

Managerial decision making


environment.

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does not give much attention to the

PLACID-CLUSTERED ENVIRONMENT
Environment changes slowly, but threats are clustered, not random. The
forces in the environment are linked, and pose a higher threat than
randomized changes.

These organizations use long-range planning and forecasting to learn as


much as possible about their environments. Structures will tend to be
centralized.

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DISTURBED-REACTIVE ENVIRONMENTS
A more complex environment than either placid one. Many similar
organizations seeking similar ends. One or more may be large and have
ability to influence the environment. Two or three large companies can
dominate an industry.
Organizations in this type of environment used planned tactical initiatives,
calculate reactions by other, and develop counteractions. This requires
flexibility and a structure with some decentralization.

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TURBULENT-FIELD ENVIRONMENTS
The most dynamic of the environments and has the highest level of
uncertainty associated with it. Environmental elements are increasingly
organized and interrelated.

Major, dynamic shifts can occur in the environment as one, or a small


group of large companies change the rules of competition. Thus,
planning is not as useful here.

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Nature of Environment

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Stable Environment
In-between Environment
Dynamic Environment

UNCERTAINTY IN THE ENVIRONMENT


Simple

DEGREE OF
HOMOGENEITY

Complex

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Small number of
external elements.
Elements remain the
same or change
slowly

Small number of
external elements.
Elements are in
continuous change

Large number of
external elements.
Element remain the
same or change
slowly

Large number of
external elements.
Elements are in
continuous change.

Stable

DEGREE OF CHANGE

Dynamic

UNCERTAINTY IN THE ENVIRONMENT

Simple

LEAST
UNCERTAINTY

MODERATE
UNCERTAINTY

MODERATE
UNCERTAINTY

MOST
UNCERTAINTY

DEGREE OF
HOMOGENEITY

Complex

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Stable

DEGREE OF CHANGE

Dynamic

UNCERTAINTY IN THE ENVIRONMENT

Simple
DEGREE OF
HOMOGENEITY

Complex

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Soft drink bottlers,


beer distributors,
container manuf.,
local utilities

Personal computers,
fashion clothing,
music industry, toy
manufacturers

Universities,
hospitals,
Insurance companies

American Airlines,
oil companies,
electronic firms,
aerospace firms

Stable

DEGREE OF CHANGE

Dynamic

BURNS & STALKER


Used interviews with managers and their own observations to evaluate
the impact of environment on organizational structure and management
practice.

The type of structure that existed in rapidly changing and dynamic


environments was different from that in organizations with stable
environments.
B & S labeled the two types organic and mechanistic, respectively

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ORGANIC ORGANIZATION
Organic organizations are relatively flexible and adaptable. They rely on
lateral communication rather than vertical communication. Influence is
based upon expertise and knowledge rather than on authority of position.
Responsibilities are defined loosely rather than rigid job definitions.
Emphasis is on exchanging information rather than on giving direction.

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MECHANISTIC ORGANIZATION
Mechanistic structures are characterized by high complexity, formalization
and centralization. They perform routine tasks, rely heavily on
programmed behaviors, and are relatively slow in responding to
the unexpected.

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BURNS & STALKER


CHARACTERISTIC MECHANISTIC ORGANIC

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Task Definition

Rigid

Flexible

Communication

Vertical

Lateral

Formalization

High

Low

Control

Centralized

Diverse

Influence

Authority

Expertise

Environmental Forces

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Supplier supply materials, machine, service and information used to


produce its products and services
Financial institution the capital resources that available for the firm
Customers targets for the firm to market its products and services
Competitor - all of the entities that compete with the firm in
marketplace
Stockholders/owners persons who are invest money in the firm and
represent the high level of management
labor union organization of skilled and unskilled workers
The community people in the area where the firm perform its
operation
Government federal, state and local level government that provides
not only constraints in the form of law, regulation, and taxes taking but
also provides assistance in form of purchases, information and funds.

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Environmental Management
Environmental management how to manage the environmental
elements by executing strategies that alter uncertainly environment to
a certain extent

Environmental Management Strategy:


Independent Strategy carry out its own resources to make better its
environment
Cooperative Strategy involve working with other environmental
element for the same purpose
Strategic Maneuvering try to alter its environment

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Environmental Management
Basic Strategy

Specific Strategy

Example

Independent
Strategy

Competitive
aggression
Legal Action
Political Action

Product differentiation
Aggressive Pricing and
Advertising Suits brought
against competitors
Lobbying

Cooperative
Strategy

Co-optation
Coalition

Consumer representatives
Industry Association

Strategic
Domain Selection
Maneuvering Diversification
Merger and
Acquisition

Entry in specific market


Wide product mix
Merger with competitors

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Social Responsibility
Social Responsibility the awareness that business activities have an
impact on its environment so it should try to balance its commitment in
its environment

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Social Responsibility

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Responsibility to consumers, such as:


the right to safety,
the right to be informed
the right to choose,
the right to be heard
Responsibility to employees, such as:
The right to safety
The right to equality in the workplace,
The right to improve its capability

Social Responsibility

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Responsibility to investors, such as:


The right to be proper management of funds
The right to access information
Responsibility to the environment, such as
Preventing to water and air pollution,
Safe to the land and Forest
natural resources
Social responsibility, such as
Community support
Social audit

Business Challenges/Environmental
Variables

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Challenges in the Economic Environment


Challenges in the Competitive Environment
Challenges in the Social and Culture Environment
Challenges in the Political-Legal Environment
Challenges in the Technological Environment

Challenges in the Economic


Environment

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Macroeconomics
Microeconomics
The Forces of Supply and Demand
The Business Cycle
State Budget
International Trade

Challenges in the Competitive


Environment

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Types of Market Structure


Global Competition
Dealing with Competitors

Challenges in the Social and Culture


Environment

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Changing Population
Cultural Values
Social Responsibility
Consumerism and Ecology
Business Ethics

Challenges in the Political-Legal


Environment

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Government Role
Business and Politics
Law enforcement

Challenges in the Technological


Environment

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Technology Development
Applying Technology
Technology Transfer

Thanks Qs. If any?

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