2

Chapte
r

The
Managem
ent
Environm
ent
Copyright 2015 Pearson Education, Inc.

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Learning Outcomes
Explain what the external
environment is and why its
important.
Discuss how the external
environment affects managers.
Define what organizational culture is
and why its important.
Describe how organizational culture
affects managers.
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2.1 Explain what the

external
environment is and
why its important.

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External Environment
Factors, forces, situations, and events
outside the organization that affect
its performance.

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Components of the
External Environment

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How Has the Economy

Changed?

Turmoil in mortgage markets

Spread to businesses
Great Recession
Foreclosures, unemployment, public
debt, and social problems

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Economic Inequality
Harris Interactive Poll:
Only 10 percent of adults think
economic inequality is not a problem
at all.

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How Much Difference

Does a Manager Make?
Managers:
All powerful OR helpless?

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Demographics
Demography is destiny.
Age Cohorts

Baby Boomers
Gen X
Gen Y
Post-Millenials

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2.2 Discuss how the

external
environment affects
managers.

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How Does External

Environment Affect
Managers?
Jobs and employment
Assessing environmental uncertainty
Managing stakeholder relationships

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Assessing Environmental
Uncertainty

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Managing Stakeholder
Relationships
Stakeholders:
any constituencies in an organizations
environment that are affected by that
organizations decisions and actions.

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Organizational
Stakeholders

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2.3 Define what

organizational
culture is and
explain why its
important.

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What is Organizational
Culture?

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Organizational Culture
Shared values, principles, traditions,
and ways of doing things that influence
the
way an organizations members act.

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Culture is:
1. Perceived
2. Descriptive
3. Shared

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Dimensions of Culture

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2.4 Describe how

organizational
culture affects
managers.

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How Does Organizational

Culture Affect Managers
Effect on what employees do and how
they behave
Effect on what managers do

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How Does Culture Affect

What Employees Do?
Strong cultures:
cultures in which the key values are
deeply held and widely shared.

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Strong Cultures Can:

Substitute for formal rules and
regulations
Create predictability, orderliness, and
consistency

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Acclimating to Corporate
Culture

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How Does Culture Affect

What Managers Do?

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Company Values Affect

Managers Behavior
Ready-aim-fire versus Ready-fire-aim

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Managerial Decisions
Influenced by Culture

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