Management of Environment

What are the functions

Ethics of Managers
of Managers

Environment
Understanding the Function of Management
• Function of Management
a.) Planning
b.) Organizing
c.) Controlling
d.) Leading and Developing Employees
• Types of Managers
a.) Corporate-level Managers
b.) Business-Level Managers
c.) Functional Managers
d.) Frontline Managerr
• Managerial Roles
a.) Interpersonal Roles
b.) Informational Roles
c.) Decision Roles
• Managerial Competencies
a.) Managerial Skills
b.) Managerial Values
c.) Managerial Motivation
a.) Planning

Measures the
Allocate
success the
responsibility
action by
Choosing Goals Identify Action for Revised plan
comparing
implementing
result and
actions
goals
b.) Organizing
• Who will do/perform ?
• What type of task?
• Who reports to whom?
• How to maintain co-ordination?
c.) Controlling

Intervening
Monitoring the Taking Corrective
when Goals are
goals action
not met
d.) Leading and Developing Employee's

Motivating Influencing Directing

Others aspects of Leading; Developing
employees

Hiring Training Mentoring Rewarding

Types of Managers:-
a.) Corporate Level Managers
• Leads the entire enterprise.
• Formulates strategies ;
a.) Enter new businesses through acquisitions or whether to exit a business area.
b.) How the enterprise should be organized into different divisions
c.) Signs off on major strategic initiatives proposed by the heads of divisions.
d.) Exercises control over divisions.
e.) Monitoring their performance.
f.) Deciding what incentives to give divisional heads.
g.) Develop the human capital of the enterprise.
b.)Business Level Managers
a.) Lead their divisions-motivating, influencing, and directing their subordinates.
b.) Responsible for divisional performance.
c.) Translate the overall strategic vision for the corporation into concrete strategies and plans for their units.
d.) Often have considerable latitude to develop and implement
strategies.
e.) Organize operations within their division.
f.) Deciding how best to divide tasks into functions and department.
g.) Maintaining co-ordination among the subunits.
h.) Control activities within their divisions.
i.) Monitoring performance against goals.
j.) Intervening to take corrective action when necessary, and developing human capital
c.) Functional Level Managers
a.) Functional managers motivate, influence, and direct others within their areas.
b.) They are not responsible le for the o overall performance of the organization.
c.) Functional managers nevertheless have a major strategic role:
- to develop functional strategies
- draft plans in their areas that helpful ill the strategic objectives set by business.
d.) Functional managers provide most of the information that makes it possible for business.
e.) Functional managers themselves as may generate important ideas that subsequently may
become major strategies for the company.
f.) Strategy implementation; the execution of corporate- and business-level strategies.
g.) Responsible for developing human capital within their organizations.
h.) Organize their functions into subunits such as departments or teams;
-exercise control over those subunits.
- Set goals
- Monitor performance
- Provide feedback
- Make adjustments if necessary
d.) Frontline Managers
a.) Frontline managers are critical to maintaining the performance of
an organization.
b.) Lead their teams and units.
c.) They strategize about the best way to do things in their units.
d.) They plan how best to perform the tasks of their units.
e.) They organize tasks within their teams,
f.) They monitor the performance of their subordinates.
g.) They try to develop the skills of their subordinates.
Managerial roles
a.) Managerial Skills

Competencies = f {skills, values, and motivational preferences }

 Conceptual • The ability to see the big picture.
Skills
• Mastery of specific equipment or following
Technical Skills
technical procedures.
• Skills that managers need, including the abilities
to
Human Skills communicate, persuade, manage conflict,
motivate, coach, negotiate, and lead
b.) Managerial Values
• Stable, evaluative beliefs that guide our preferences for
Values
outcomes or courses of action in a variety of situations

Enacted Values • Values that actually guide behavior

Espoused Values • What people say is important to them.

Shared Values • Values held in common by several people.

• Values that society expects people to follow because
they distinguish right from wrong in that society.
Ethical Values
c.) Managerial Motivation
Desire to Compete for
Management Jobs personalized power
orientation:- Seeking power
for personal gain

Desire to Desire to Exercise

Take Action Managerial Power
Motivation

socialized power orientation:-

Accumulating power to
Desire to Be Distinct achieve social or
or Different organizational objectives.
The External & Internal Environment
• Task Environment
a.) The Threat of Entry.
b.) Bargaining Power of Buyers.
c.) Bargaining power of Suppliers.
d.) The Threat of Substitutes.
e.) The Intensity of Rivalry.
f.) A sixth force: Complementary synthesis
• The General Environment
a.) Political and Legal Environment
b.) Macroeconomic Forces
c.) Demographic Forces
d.) Socio-cultural Forces
e.) Technological Forces
f. ) International Forces
• Dynamic Changes in the External Environment
a.) Incremental vs Discontinuous Change
b.) Environmental Uncertainty
• The Internal Envrionmental
a.) Internal Organization
b.) Employees
c.) Resources
The Environment of Managers
The Task Environment

Threat of
Entry

Bargaining Intensity Bargaining

Power of of Power of
Suppliers Rivalry Buyers

Threat of
Substitutes
a.) Threats of Entry

Barrier
s of
Entry

Threat
s
Brand
Economies
Loyalt of Scale
y
b.) Bargaining Power of Buyers
• the ability of buyers to bargain down prices charged by firms in the
industry or to raise the firms’ costs by demanding better product
quality and service.

Buyers • They are few in number and purchase large quantities

• They can choose between equivalent products from many
different firms.

Powerful • they can switch easily between the offerings of different firms
(their switching costs are low)

Buyers • They are plentiful and purchase in small quantities.

• They have little choice.
• They cannot switch easily between the offerings of different
Weak firms.
c.) Bargaining Power of Suppliers
• The bargaining power of an enterprise over its suppliers is greater if:
a.) The firm purchases in large quantities.
b.) It can choose between multiple suppliers.
c.) The costs of switching between suppliers is low.
d.) The firm is not dependent on any single supplier for important
inputs
d.) The Threats of Substitutes
• Substitutes Products:- : The goods or services of different businesses
or industries that can satisfy similar customer needs.
•
e.) The Intensity of Rivalry
a.) The Nature of the products.
b.) Demand and Supply Condition.
c.) The Cost Structure of the firms.
d.) Competitive structure of the industry.
a.) The Nature of The products
• Some products can be thought of as commodities or as being
commodity like. A commodity product is one that is difficult to
differentiate from those produced by rivals. It depends on demand
conditions.
b.) Demand and Supply Condition
• Excess demand - prices will be bid up by consumers and rivalry will be
reduced.
• Excess Supply (excess capacity) - Firms will compete vigorously for
enough sales volume to efficiently utilize their capacity, rivalry will be
intense, and prices and profits will trend lower.

• Excess demand thus represents an opportunity and excess capacity

a threat.
• A critical thing for managers to understand is how long the excess is
likely to persist because that helps define the scale and longevity of
the associated opportunity or threat.

• It has been defined by;

Balance between D & S = f { Barriers to entry , Barriers to Exit}

• Barriers to exit ; are factors that stop firms from reducing capacity
even when demand is weak and excess capacity exists.
(1) The fixed costs of closing down capacity, such as the financial
charges that must be taken to shut down a plant and lay off
employees.
(2) An unwillingness to reduce capacity due to a belief, which may be
misplaced, that demand will soon rebound.
(3) Government regulations.
c.) The cost Structure of Firms
sales
IF Fixed Cost is high volume is low

No
profits
What
need to
be creates an incentive for firms to cut their
done ? prices and increase promotion spending to raise sales
volume, thereby covering fixed costs.
d.) Competitive Structure of Firms
• The competitive structure of an industry is the number and size
distribution of incumbent firms
• consists of many small or medium-sized
Fragmented companies, none of which is in a position to
Industry determine industry price.

• Dominated by a few large companies (an

oligopoly) or in extreme cases by just one
Consolidated company (a monopoly); here companies often
Industry are in a position to determine industry prices.
e.) Sixth Force : Complementors
• Complementors are firms that provide goods or services that
are complementary to the product produced b y enterprises in the
industry.
The General Environment
• Political & Legal Forces :- The result of changes in laws and regulations.
• Macroeconomic Forces:- That affect the general health and well-being of a national or
the regional economy, which in turn affect the profitability of firms within that economy.
Four important factors in the macroeconomic environment are;
i.) The growth rate of the economy,
ii.) Interest rates,
iii.) Currency exchange rates,
iv.) Inflation (or deflation) rates.
• Demographic Forces :- outcomes of changes in the characteristics of
a population, such as age, gender, ethnic origin, race, sexual
orientation, and social class.
• Sociocultural Forces :- It refer to the way in which changing social
mores and values affect an industry.
• Technological Forces:-
• International Forces :-
Dynamic Changes in the External
Environment
• Incremental change refers to changes that do not alter the basic
nature of competition in the task environment.
• Discontinuous change is one that fundamentally transforms the
nature of competition in the task environment.
Growth Strategy
• Why we need growth Strategy ?