Week 8 MANAGING THE ENVIRONMENT

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Week 8 MANAGING THE ENVIRONMENT

• Özge Can 14.11.2011

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Social Responsibility

• Social Responsibility
• The way a companys managers and employees view
  their duty or obligation to make decisions that
  protect, enhance, and promote the welfare and
  well-being of the society as a whole
• Corporate Social Responsibility (CSR) The idea
  that businesses have obligations to society
  beyond the pursuit of profits

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I. The Classical View

• Managements only social responsibility is to
  maximize profits (create a financial return) by
  operating the business in the best interests of
  the stockholders (owners of the corporation).
• Expending the firms resources on doing social
  good is not preferable

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II. Socioeconomic View

• Managements social responsibility goes beyond
  making profits to include protecting and
  improving societys welfare.
• Corporations are not independent entities
  responsible only to stockholders. Firms have a
  moral responsibility to larger society to become
  involved in social, legal, and political issues.

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Why Be Socially Responsible?

• Building good image and reputation
• Responsibility for bearing the costs of
  protecting stakeholders, providing health care
  and income, paying taxes and etc
• Promoting a climate of caring in general
• Better environment and better society
• Superiority of prevention over cures

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Open Systems

• Open systems
• Organizations are affected by, and affect, their
  environment.
• They are systems open to external world.

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What is External Environment?

• Set of forces and conditions that operate beyond
  an organizations boundaries but affect a
  managers ability to acquire and utilize
  resources
• Components of external environment
• Task Environment
• General Environment

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Forces in the External Environment
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What Should Managers Do to Deal with External
Environment?

• Environmental analysis
• Environmental scanning gt searching for and
  sorting through information about the environment
• Forecasting and benchmarking
• Adapting to environment changing yourself
• or
• Try to influence/ change the environment

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Task (Competitive) Environment

• Set of forces and conditions that originate with
  suppliers, distributors, customers, and
  competitors and affect an organizations ability
  to obtain inputs and dispose of its outputs
  because they influence managers on a daily basis
• Direct and immediate impact on organization
• Suppliers
• Distributors
• Customers
• Competitors Potential Competitors

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General (Macro) Environment

• The wide-ranging global, economic, technological,
  socio-cultural, demographic, political, and legal
  forces that affect an organization and its task
  environment
• Economic forces
• Technological forces
• Socio-cultural forces
• Demographic forces
• Political/ legal forces
• Global forces

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Task Environment Suppliers

• Suppliers Individuals and organizations that
  provide an organization with the input resources
  that it needs to produce goods and services
• Raw materials, component parts, labor (employees)
• Material shortages and lack of substitutes
• Managers can have stronger bargaining power by
  increasing the number of suppliers of an input

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Task Environment Suppliers

• Outsourcing
• Purchase of inputs from foreign suppliers or the
  production of inputs abroad to lower production
  costs and improve product quality or design
• Global outsourcing gt outsourcing across countries

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Task Environment Distributors

• Distributors
• Organizations that help other organizations sell
  their goods or services to customers
• Examples package delivery companies, super
  market retailers

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Task Environment Customers

• Customers
• Individuals and groups that buy the goods and
  services that an organization produces
• Consumers or businesses
• Identifying an organizations main customers and
  producing the goods and services they want is
  crucial to organizational and managerial success.

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Task Environment Competitors

• Competitors
• Organizations that produce goods and services
  that are similar to a particular organizations
  goods and services
• Potential Competitors
• Organizations that presently are not in the task
  environment but could enter if they choose so

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Potential Competitors Barriers to Entry

• Barriers to Entry gt Factors that make it
  difficult and costly for new companies to enter a
  particular task environment or industry
• Economies of scale
• Cost advantages associated with large operations
• Brand loyalty
• Customers preference for the products of
  organizations currently existing in the task
  environment.
• Government regulations

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Barriers to Entry
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General (Macro) Environment

• The wide-ranging global, economic, technological,
  socio-cultural, demographic, political, and legal
  forces that affect an organization and its task
  environment
• Economic forces
• Technological forces
• Socio-cultural forces
• Demographic forces
• Political/ legal forces
• Global forces

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General Environment Economic Forces

• Interest rates, inflation, unemployment, economic
  growth, and other factors that affect the general
  health and well-being of a nation or the regional
  economy of an organization

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General Envrionment Technological Forces

• Technology The combination of skills and
  equipment that managers use in the design,
  production, and distribution of goods and
  services
• Technological Forces Outcomes of changes in the
  technology that managers use to design, produce,
  or distribute goods and services

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General Environment Socio-cultural Forces

• Pressures emanating from the social structure of
  a country (or society) or from the national
  culture
• Social Structure
• The system of relationships established between
  individuals and groups in a society
• National Culture
• The set of values, attitudes, beliefs, and norms
  shared by a majority of the inhabitants of a
  country

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General Environment Demographic Forces

• Outcomes of change in, or changing attitudes
  toward, the characteristics of a population, such
  as age, gender, ethnic origin, race, sexual
  orientation, and social class

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General Environment Political Legal Forces

• Outcomes of changes in laws and regulations
• Such as regulation of industries, the
  privatization of organizations, and increased
  emphasis on environmental protection

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Globalization

• Globalization
• The set of specific and general forces that work
  together to integrate and connect economic,
  political, and social systems across countries,
  cultures, or geographical regions so that nations
  become increasingly interdependent and similar
• Need of new thinking and new managerial skills

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Globalization

• A shift toward a more open global environment in
  which capital flows more freely
• Four principal forms of capital
• Human capital gt flow of people
• Financial capital gt flow of money
• Resources capital gt flow of natural resources,
  parts, components
• Political capital gt flow of power and infleunce

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Globalization

• Companies search for new opportunities to create
  profit and wealth.
• Declining barriers to international trade and
  investment
• Free trade, new trade aggreements
• Declining barriers of distance and culture

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Management Skills for The Global Marketplace

• Effective global managers need
• Global strategic skills
• Communication skills
• Cultural intelligence and global mind set
• Transfer of knowledge skills
• Team building skills
• Organization skills

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Next Week Mid-Term Exam

• November 20, 2012 Tuesday
• Hours 1300-1430
• Classes O 001 - O 002 O 003
• Good luck! ?

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Exam Content

• Textbook Chapters 1-3-4-5-6
• Chapter-2 is not included
• Powerpoint slides

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Exam Content

• You are responsible for all topics that we have
  covered so far BUT please pay special attention
  to
• Four tasks of management (Chapter 1)
• Levels and skills of management (Chapter 1)
• Big five personality traits and others (Chapter
  3)
• Emotions, values, job attitudes and
  organizational culture (Chapter 3)

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Exam Content

• Diversity of the workforce sources of diversity
  management of diversity (Chapter 5)
• Stakeholders and managers responsibilities and
  ethical behavior to them (Chapter 4)
• Rules and sources of ethical decision-making
  social responsibility (Chapter 4)
• External environment Components of task and
  general environments how each one can effect the
  company and managers (Chapter 6)

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Exam Format

• Multiple choice questions ( 60-70)
• Short-essay questions (1-2 Qs 30-40)
• No definition will be asked do not memorize
  anything
• I will be seeking to receive your take opinions
  comments on a managerial issue based on the
  concepts and ideas discussed in this course.