Post on 21-Dec-2015
2Chapter
The Management Environment
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-1
Learning Objectives
• Explain what the external environment is and why it’s important.
• Discuss how the external environment affects managers.
• Define what organizational culture is and explain why it’s important.
• Describe how organizational culture affects managers.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-2
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-3
What Is External Environment?
External environment is the factors, forces, situations, and events outside the organization that affect its performance.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-4
Components of External Environment
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-5
How Has the Economy Changed?
• Began with turmoil in mortgage markets • Spread to businesses when broader credit
markets collapsed• Called the “Great Recession” • Characterized by foreclosures, high rates of
unemployment, huge public debt, and widespread social problems
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-6
How Will Business Change?
• Role of government in financial markets and in consumer protection
• Government spending comparable to World War II levels
• Additional regulations and increased enforcement and oversight of current regulations
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-7
What Role Do Demographics Play?
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-8
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-9
How Does External Environment Affect Managers?• Jobs and employment• Assessing
environmental uncertainty
• Managing stakeholder relationships
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-10
Assessing Environmental Uncertainty
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-11
Managing Stakeholder Relationships
Stakeholders are any constituencies in an organization’s environment that are affected by the decisions and actions of that organization.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-12
Why Manage Stakeholder Relationships?• Good stakeholder relationships can:– Positively affect organizational performance– Be recognized as “doing the right thing” and show
corporate social responsibility– Create and reinforce a positive image of the
organization among its stakeholders and community
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-13
Organizational Stakeholders
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-14
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-15
What Is Organizational Culture?
Organizational culture is the shared values, principles, traditions, and ways of doing things that influence the way organizational members act.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-16
Defining Culture and Its Impact
• Culture is a perception.• Organizational culture
isn’t concerned with whether members like it.
• Employees describe the culture in similar terms despite their diversity.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-17
Strong Corporate Culture = Success
“Deliver WOW through Service.”
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-18
How Can Culture Be Assessed?
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-19
How Do Employees Learn the Culture?
• Stories• Rituals• Material symbols• Language
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-20
Where Does an Organization’s Culture Come From?
• Organizational culture derives from:– The founder’s biases and assumptions about what
the organization and its values should be– What the first employees learned from their own
experiences
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-21
How Does Organizational Culture Affect Managers?
• Through its effect on what employees do and how they behave
• Through its effect on what managers do as they plan, organize, lead, and control
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-22
Acclimating to Corporate Culture
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-23
How Does Culture Affect What Employees Do?• A strong culture reflects employee acceptance
of, and commitment to, the organization’s key values.
• The stronger the culture, the more it affects employee and manager actions.
• A strong culture preempts the need for formal rules and regulations.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-24
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-25
How Does Culture Affect What Managers Do?
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-26
Managerial Decisions Affected by Culture
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-27
Case Study: Honest Tea Company
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-28
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 2-29