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Environmental forces[1]
1.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 Chapter 3Chapter 3 EnvironmentalEnvironmental ForcesForces
2.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Environmental ForcesEnvironmental Forces Business Environment Task Environment Competitive Forces in the Task Environment Technological Forces Political and Legal Forces
3.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT The General Environment and EnvironmentalThe General Environment and Environmental Forces Affecting OrganizationsForces Affecting Organizations Adapted from Figure 3.1 The General Environment Cultural Forces Political - Legal Forces Technological Forces Competitive Forces Organization Ecosystem PoliticalSystem Demographics Economic System 3.2
4.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT The General EnvironmentThe General Environment Sometimes called the macro-environment. Are external factors, such as inflation and demographics, that usually affect indirectly all or most organizations.
5.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Factors in the General EnvironmentFactors in the General Environment Type of economic system and economic conditions Type of political system Condition of the ecosystem Demographics Cultural Background
6.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Roles of Government in BusinessRoles of Government in Business In the US, the government acts as a watchdog over business Provides direction in areas such as: antitrust, monetary policy, defense, human rights environmental matters
7.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT The Economic SystemThe Economic System The US has an economic system in which there are: privately controlled markets based on supply and demand free market competition private contracts profit incentives technological advancement
8.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT The EcosystemThe Ecosystem There is a renewed commitment to the environment in the US 1981 - 4% wanted environmental improvements 1997 - 80% want improvements
9.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Environmentally-Conscious Business PracticesEnvironmentally-Conscious Business Practices Cut back on environmentally unsafe operations Compensate for environmentally risky endeavors Avoid confrontation with state and federal pollution control agencies Comply early with government regulations Promote new manufacturing technologies Recycle wastes 3.3
10.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT DemographicsDemographics Characteristics of a population such as age, race, gender, ethnic origin, and social class determine the characteristics of work groups, organizations, specific markets, or nations population. Demographics influence marketing, advertising, and human resources decisions. Such as the number of individuals the ages of 18 to 25 They change all the time.
11.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Cultural ForcesCultural Forces Culture is the shared characteristics, values, and beliefs of a group that distinguishes them from another group Such as religion, language, and heritage
12.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Hofstede’s FrameworkHofstede’s Framework Power distance Degree to which influence/control are unequally distributed among individuals within a particular culture salary differentiation from CEO to front line employees Uncertainty avoidance Degree to which members of a society attempt to avoid ambiguity, riskiness, and indefiniteness of future Individualism Extent to which society expects people to take care of themselves and their immediate families And/or the degree to which individuals believe they are masters of their own destiny 3.5
13.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Hofstede’s Framework (contd.)Hofstede’s Framework (contd.) Collectivism Measures tendency of group members to focus on the common welfare and feel loyalty toward one another Masculinity Degree to which acquisition of money and things is valued and high quality of life for others is not Confucian dynamism Stability of society is based on unequal relationships Family is the prototype of all organizations People should treat others as they would like to be treated 3.6
14.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Basic Types of Task EnvironmentsBasic Types of Task Environments Adapted from Figure 3.3 Factors in environment are few quite similar to each other basically the same over time Example: Soft-drink distributors Factors in environment are few somewhat similar to each other continually changing Example: Fast-food outlets Factors in environment are numerous not similar to each other basically the same over time Example: Basic food production firms Factors in environment are numerous not similar to each other continually changing Example: Computer firms STABLESTABLE CHANGINGCHANGING SS II MM PP LL EE CC OO MM PP LL EE XX 3.8
15.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Ambiguity or unpredictability of certain factors external to an organization governmental regulations competition stability of inputs demand characteristics e.g. Customer bargaining power 3.6 Environmental UncertaintyEnvironmental Uncertainty
16.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Turbulent EnvironmentTurbulent Environment Complex, constantly changing Both ambiguous and unpredictable
17.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Competitive Forces in the Task EnvironmentCompetitive Forces in the Task Environment Adapted from Figure 3.4 Suppliers bargaining power Threat of new competitors Buyers bargaining power Threat of substitute goods/services Rivalry among existing firms in industry 3.9
18.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT CompetitorsCompetitors Importance and Effect of Competitors competitors are an important day-to-day environmental force facing organizations rivalry among competitors leads to price cutting advertising promotions enhanced customer service or warranties improvements in product or service quality
19.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT New EntrantsNew Entrants Barriers to Entry: economies of scale decrease in per unit costs as volume of goods/services produced increases product differentiation uniqueness in quality, price, design, brand image, or customer service that gives a product an edge over the competition
20.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT New Entrants cont.New Entrants cont. capital requirements dollars needed to finance equipment supplies, advertising, R&D, and the like necessary to start government regulation may bar or severely restrict potential new entrants to an industry
21.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Substitute Goods and ServicesSubstitute Goods and Services Goods/Services that can easily replace the firm’s goods/services I.e. Starbucks introduced a new drink called Frappuccino. It is a cold drink that can substitute for the more traditional hot coffee drink
22.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT CustomersCustomers Potential Effects of Customers they may drive down prices push for more or higher-quality products increase competition among sellers by playing one against each other
23.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT IntegrationIntegration Purchasing or developing related business units thought of as facing the customer Forward Integration-purchasing your customer Why? Backward Integration-purchasing your supplier Why? Horizontal Integration-purchasing competitors Why?
24.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Customers cont...Customers cont... Exhibit Bargaining Power to the Extent that: they purchase a large volume relative to the supplier’s total sales the product/service represents a significant expenditure by the customer they pose a realistic threat of backward integration, for example: the purchase of one or more of its suppliers they have readily available alternatives for the same services/products
25.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT SuppliersSuppliers Bargaining Power of Suppliers often controls how much they can : raise prices above their costs reduce the quality of goods and services is increased by patents and copyrights is increased by supplier-customer alliances which are advocated by total quality programs
26.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Impact of TechnologyImpact of Technology What is technology? knowledge, tools, techniques, and actions used to transform material , information, and other inputs into finished goods and services plays pivotal role in creating and changing an organization’s task environment
27.
Hellriegel, Jackson, and
Slocum MANAGEMENT, 8E South-Western College Publishing Copyright © 1999 PPT Impact of Technology cont...Impact of Technology cont... Role in Strategy : creates strategic options not feasible with older technologies approaching those of traditional large-scale manufacturing facilities marketing over the internet online, real-time financial management systems can determine profit and loss on a a daily basis improved access to services (e.g. Banking)
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