ch. 3 - the environmental context of management

7/24/2019 Ch. 3 - The Environmental Context of Management

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PART II THE ENVIRONMENTAL

CONTEXT OF MANAGEMENT

1. The Environment of Organizations

2. The Ethical and Social Environment

3. The Global Environment

4. The Multicultural Environment

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1. THE ENVIRONMENT OF

ORGANIZATIONS

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THE ORGANIZATION AND ITS ENVIRONMENTS

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External EnvironmentGeneral environment:everything

outside an organizations

boundarieseconomic, legal, political, socio-

cultural, international,

technical and natural forces.

Task environment:specific groups

and organizations that affect the firm.

customers, competitors,

suppliers, labour market

Internal EnvironmentConditions and forces present at work

and within an organization


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MCDONALDS GENERAL ENVIRONMENT

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MCDONALDS TASK ENVIRONMENT

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HOW ENVIRONMENTS AFFECT ORGANIZATIONS

Change and Complexity

Environmental change occurs in two ways: Degree to which change in environment is occurring

Degree of homogeneity or complexity of the environment

Uncertainty A driving force that influences organizational decisions.

Competitive Forces Porters Five Competitive Forces

Threat of new entrants into the market

Competitive rivalry among present competitors

Threat of substitute products

Power of buyers

Power of suppliers

Environmental Turbulence Unexpected changes and upheavals in the environment of an organization.

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WHY DO ORGANIZATIONS CARE SO MUCH

ABOUT FACTORS IN THE EXTERNAL

ENVIRONMENT?

Environment creates uncertainty formanagers, and they must respond bydesigning the organization to adapt to theenvironment

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HOW ORGANIZATIONS ADAPT TO THEIR ENVIRONMENTS

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2. THE ETHICAL AND SOCIAL

ENVIRONMENT

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INDIVIDUAL ETHICS IN ORGANIZATIONS

Ethics An individuals personal beliefs regarding what is rightand wrong or good and bad.

Ethical Behavior Eye of the beholder or behavior that conforms togenerally accepted social norms.

Unethical Behavior???Borrowing office supplies for personal useSurfing the Net on company time

Filing falsified or inflated business expense reports


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AGUIDE FORETHICAL DECISION

MAKING

Ethical Norms Affecting Actions

Utility

Rights

Justice

Caring


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STEPS IN THE ETHICAL DECISION MAKING

PROCESS

1. Stop and think

2. Clarify what are short and long term goals

3. Setup options while making decisions. Talk to someone aboutthe decision

4. Consider the consequences

5. Chose to make the decision. Talk to people whose judgment you

respect.

Do unto to others as you would have them do unto you.


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SOCIAL RESPONSIBILITY AND ORGANIZATIONS

Organizational Stakeholders People and organizations directly affected by the

behaviors of an organization and that have a stake in itsperformance.

Social Responsibility The set of obligations to behave responsibly.

Areas of Social Responsibility Stakeholders

The natural environment

The general social welfare


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ORGANIZATIONAL STAKEHOLDERS


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ARGUMENTS FOR AND AGAINST SOCIAL

RESPONSIBILITY

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Arguments for:

Public expectations Long-run profits Ethical obligation Public image Better environment Discouragement of further

government regulation

Balance of responsibility andpower Stockholder interests Possession of resources Superiority of prevention over

cures

Arguments against:

Purpose of the business to earnprofit

Costs

Business will get too much power

Lack of expertise to manage

Lack of accountability

Lack of broad public support


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APPROACHES TO SOCIAL RESPONSIBILITY

Obstructionist Stance Do as little as possible

Defensive Stance

Do only what is legally required and nothing more.Accommodative Stance Meet legal and ethical obligations and go beyond that in selectedcases.

Proactive Stance Organization views itself as a citizen and proactively seeksopportunities to contribute to society.


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MANAGING SOCIAL RESPONSIBILITY:

FORMAL ORGANIZATIONAL DIMENSIONS

Legal Compliance Extent to which the organization conforms to local, state,

govt., and international laws.

Ethical Compliance Extent to which members of the organization follow basicethical/legal standards of behavior.

Philanthropic Giving Awarding of funds or gifts to charities and other socialprograms.


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MANAGING SOCIAL RESPONSIBILITY:

INFORMAL ORGANIZATIONAL DIMENSIONS

Organization Leadership and Culture Leadership practices and the culture of the organization

can help define the social responsibility stance anorganization and its members will adopt.

Whistle Blowing The organizational response to the disclosure by an

employee of illegal or unethical conduct on the part ofothers within the organization is indicative of theorganizations stance on social responsibility.


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3. THE GLOBAL ENVIRONMENT

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LEVELS OF INTERNATIONAL BUSINESS

ACTIVITYDomestic Business acquires all of its resources and sells all of its products or serviceswithin a single country.

International Business is primarily based in a single country yet acquires a meaningfulshare of its resources and/or revenues from other countries.

Multinational Business transcends national boundaries and buys raw materials, borrowsmoney, and manufactures and sells its products in a world-widemarketplace.

Global Business transcends national boundaries and is not committed to a singlehome country.


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ADVANTAGES AND DISADVANTAGES OF DIFFERENT

APPROACHES TO INTERNATIONALIZATION


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ENVIRONMENTAL CHALLENGES OF

INTERNATIONAL MANAGEMENT


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MANAGEMENT CHALLENGES

IN A GLOBAL ECONOMY

Planning in a Global Economy

Understanding of both environmental issues and competitive issues.

Organizing in a Global Economy Addressing issues of creating and managing operations on aworld-wide scale.

Leading in a Global Economy

Learning how to interact with and motivate persons of different

cultural, social, and economics backgrounds.

Controlling in a Global Economy

Integrating global operations that encompass time-zonedifferences, cultural factors, and varying communication methods.


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MANAGING IN A GLOBAL ENVIRONMENT

Developing Cultural Intelligence Cultural flexibility and ability to adapt

Cognitive, emotional and physical

Cultural sensitivity training

Cross-cultural task forces/teams

Managing Cross-Culturally Expatriates can be successful by focusing on:

Human Resources, Leading, Decision Making, Motivating

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ch. 3 - the environmental context of management

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