Explains Environment of Business and Corporate culture

2. All elements existing outside the boundary
of the organization that have the potential
to affect the organization

3.  General environment – affects indirectly
 Task environment - Affects directly -
Influences operations and performances
 Internal environment – elements within
the organization’s boundaries

5. Provides New
• Customers
• Competitors
• Suppliers
Shapes
• Social trends
• Technological trends
• Economic trends

6. Scientific and technological advances
– Specific industries
– Society at large
Impact
– Competition
– Relationship with Customers
– Medical advances
– Nanotechnology advances

7. Dimension of the general environment
– Demographic characteristics
– Norms
– Customs
– Values
Eg:
Geographical distribution
Population density
Age
Education level

8. General economic health
 Consumer purchasing power
 Unemployment rate
 Interest rates
Recent Trends
 Frequency of mergers and acquisitions
 Small business sector vitality

9. Government regulations at the local, state,
and federal levels, as well as political
activities designed to influence company
behavior.
 consumer protection legislation,
 product safety requirements, import and
export restrictions,
 information and labeling requirements

10. Managers must also recognize a variety of
pressure groups
An interest group that works within the legal-
political framework to influence companies to
behave in socially responsible ways.

11. Sectors that have a direct working relationship with the
organization
Customers -The basic reason for the very existence of any
business organization is making profits and the profits are
created by customers.
Competitors-Other organizations in the same industry or type of
business that provide goods or services to the same set of
customers are referred to as competitors.
Suppliers- Individuals and organizations that provide the input
resources that an organization needs to produce goods and
services.
Labor Market- Represents people in the environment who can
be hired to work for the organization.

12.  labor market represents people in the environment
who can be hired to work for the organization.
 Every organization needs a supply of trained, qualified
personnel.
 Unions, employee associations, and the availability of
certain classes of employees can influence the
organization’s labor market
Labor Market Forces Affecting Organizations today
 Growing need for computer literate information
technology workers
 Necessity for ongoing investment in human resources –
recruitment, education, training

13. Contemporary best-selling management books
often argue that customers are the most
important element in the external
environment. Do you agree? In what company
situations might this statement be untrue?

14.  Organizations must manage environmental
uncertainty to be effective.
 Uncertainty means that managers do not
have sufficient information about
environmental factors to understand and
predict environmental needs and changes

16. How can you prepare yourself to become an
effective manager in an increasingly
uncertain and global business environment?

17.  The internal environment within which managers work
includes corporate culture, technology, organization
structure, and physical facilities.
 highly committed employees create a high
performance organization that is tough to beat.
 culture as the set of key values, beliefs,
understandings, and norms shared by members of an
organization
 Cultures can vary widely across organizations
 Organizations within same industry reveal similar
cultural characteristics