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Global and European Business Environment :

What is environment ?

Christophe BenaventProfessor – University Paris Ouest

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Business environment

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Functional components

❚ Customer Market -> downward markets❚ Financial resources -> macro-economics❚ Supply -> upward markets❚ Production and distribution technologies❚ Human resources ❚ Legal and institutional environment❚ Environmental aspects : externalities❚ Public opinion and ethics : legitimacy❚ …

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The PESTEL model

❚ Political ❚ Economical❚ Sociological❚ Technological❚ Environmental❚ Legal

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General and specific environment

Macro

Micro

TaskGeneral

Global environment

Local environmentGeneral environment

Specific environment

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A system view of task environment

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A system view of general environment

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The 2007 crisis system

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Environment uncertainty

❚ A classical organizational variable❙ Dynamism❙ Heterogeneity❙ Munificence❙ Complexity

❚ Exemples :❙ organisations as reducing uncertainty ( buffering and

smoothing) Thomson❙ Contingency theory : Lawrence and lorsch❙ Ressources Dependence Theory : complexity and

network of stakeholder influence

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CAC 40

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Down Jones

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Environment/strategy link

❚ Different views❙ The contingency view : adaptation view of

environment (Lawrence and Lorsch)❙ organizational Ecology : a determinist

environment ( Hanan and Freeman)❙ The enactement view : a constructed

environment (Weick)❙ The strategic management view : the

modeled or choice environment ( Ansoff)

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Action modalities

❚ Assimilation

❚ Accommodation

❚ Sélection

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Rent theory

Rentes de monopole-Différenciation--Domestication

Rentes Différentielles-économie d'échelle-économie d'expérience--économie d'envergure

Domination par les coûts

FocalisationConcurrencemonopolistique

Hyper-compétitivité

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Environment adaptation

Market powerThe firm could influence, modify, model its environment

MobilityThe firm could changeIts position and chooseThe environment

Selection

Accommodation Assimilation

Reconfiguration

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The grain of environment

Amplitude

frequency

Mecanist

SpecialistPolymorphist

« Improvisist »

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Processus d ’apprentissage

Extensive

Intensif

IntentionnelAccidentel

Apprentissageexpérimental

Apprentissagepar l'usage

Apprentissagepar imitation

Apprentissagepar l'échec

Apprentissagepar l'usage

ApprentissageThéorique

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Boundaries and frontierGeneral Field

Internal field

Uncertainties

Bridges

Barriers

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Field concept of environment and Ecology

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Trends

1. shifts in economic activity and growth between and within regions of the world; 2. increasing demand for goods and services among the very poor in emerging

markets; (Bope)3. a faster pace and wider locus of technological innovation;4. Increasingly global labor markets : migrations ?5. increasingly ubiquitous and inexpensive access to information and knowledge.