Chap 2 Environment

8/6/2019 Chap 2 Environment

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Lecture 2

Understanding Competitive

Environment and

Organisational Culture

Prepared by: ANS First Prepared on: 13-12-05 Last Modif ied on: xx-xx-xx

Quality checked by: HKP

Copyright 2004 Asia Pacific Institute of Information Technology

Introduction to ManagementBM007-3-1-IMT


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Module Code and Module Title Title of Slides

At the end of this topic, YOU should be able to:

Explain the concept of mega-environment and outline its

major elements Distinguishing between the concepts of task environment

and mega-environment and describe the major elements

of the task environment.

Explain how environmental uncertainty and munificence

impact organisation Describe the major methods that organisations use to

manage their environments

Learning Outcomes


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Definitions

External Environment

The major forces outside the organisation that have

the potential to significantly influence the likely

success of products and services.

Internal Environment

The general condition that exit within an organisation.


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Environment

MEGA-ENVIRONMENT

Labour

Government

Agencies

Customers & Clients

Supplier

Competitors

TASK ENVIRONMENT

Technological

Element

EconomicElement

Legal-political Element

Sociocultural

Element

International

Element


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Mega-Environment

The general environment which reflects the broad

conditions and trends in the societies within which an

organisation operates.

It consists of FIVE major elements:

Technological

Economic

Legal-political

Sociocultural

International


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Technological Element

The current state of knowledge regarding the production

of products and services.

Most organisations can be greatly effected, either

positively or negatively by technological progress.

In order to remain competitive, organisations must stay

abreast of current technological developments that may

affect their ability to offer desirable products andservices.


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Economic Element

The systems of producing, distributing, and consuming

wealth

Capitalist economy Activity is governed by market

forces and the means of production are privately ownedby individuals, either directly or through corporations

Socialist economy The means of production are owned

by the state ad economic activity is coordinated by plan

Due to these differences, organisations that do businessin a variety of countries typically confront strikingly

diverse sets of economic ground rules within which they

must operate.


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Legal-Political Element

The legal and political systems within which an

organisation must function.

Trends in legislation, court decisions, politics and

government regulation are particularly important.

Variety of laws that specifically address the manner

which they must function e.g. OSHA


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Sociocultural Element

The attitudes, norms, beliefs, behaviours and associated

demographic trends that are characteristic of a given

demographic area.

The elements is subject to change, it is important for

managers to monitor trends that might offer new

opportunities or pose significant threats.

E.g. Mc Donalds modifies menus all over the world.


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International Element

The development of countries outside an organisations

home country than have potential to influence the

organisation.

International development can greatly affect the ability of

an organisation to conduct business abroad.

E.g. NAFTA North American Free Trade Agreement

involving Canada, Mexico and US, offer big opportunities

for market growth, they allow goods, services and funds

to move more easily between the countries involved. This factor is beyond the manipulation of a particular

organisation.


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Task Environment

The specific external elements with which anorganisation interfaces in the course of conducting itsbusiness

It depends largely on the precise products and services

that the organisation decides to offer and on thelocations where it chooses to conduct its business

An organisation can influence the elements in thisenvironment.

The elements comprises of;

Customers and clients Competitors

Suppliers

Labour supply

Government agencies


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Customers and Clients

Individuals or organisations that purchase products and /

or services.

Orgsanisation today build customer relationship and

ensure customer satisfaction so that they stay close to a

customer to build rapport and receive continuous buying.

IKEA provides baby sitting, children playground and

cafeteria to make customers feel at home and want ot

stay and shop.


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Competitors

Other organisations that either offer or have a high

potential of offering rival products or services.

Organisations need to keep abreast of what their

competitors are doing.

Suppliers Are those organisations and individuals that supply the

resources (raw material, products services) theorganisation needs to carry on operations.


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Labour Supply

Consists of those individuals who are potentially

employable by the organisation.

Labour supply varies from unskilled, semi-skilled and to

professional.

Government Agencies Agencies that provide services and monitor compliance

with laws and regulations at local state or regional andnational levels


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Managing Environmental Elements

Adaptation

Buffering

Smoothing

Forecasting

Rationing

Favourable Influence

Advertising and Public Relations

Boundary Spanning

Recruiting

Negotiating contracts

Co-Opting

Strategic alliances

Trade Associations

Political Activity


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The Internal Environment :

Organisational Culture

Organisational Culture A system of shared valuesassumptions, beliefs and norms that unite the membersof an organisation.

The way things are done in an organisation. It is important in an organisation because as individualsact on shared values and other aspects of organisationalculture, their behaviours can have significant impact onorganisational effectiveness.

Cultures that develop reflect the drive and imagination ofthe individuals involved.

E.g. Mc Donalds Quality service, cleanliness andvalue.

Culture can have a positive or negative impact.


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Manifestation of Organisational

Culture

Symbols an object, act, event, or quality that serves

as a vehicle for conveying meaning.

Stories narrative based on true events, whichsometimes may be embellished to highlight the intended

value.

Rites and Ceremonials a relatively elaborate,dramatic, planned set of activities intended to convey

cultural values to participants.


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Q & A

Question and Answer Session


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Review Questions

Outline the major elements that make up the mega-

environment. How would they influence the decisions

which are made in an organisation?

Explain how environmental uncertainties effect theorganisation.

How can an organisations adapt and cope with the ever

so changing environment.

How does a manager help cultivate a positiveorganisation culure?


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Follow up Assignment

Read;

Chapter 3 of Management by Kathryn M.

Bartol and D. Martin. Chapter 2 of Management by Bateman Snell.


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Topic and Structure of next session: -

Chapter 3 Organisational Structure

Next Session

Documents

Chap 2 Environment