chapter-three(3) management and society management and society

CHAPTER-Three(3)CHAPTER-Three(3)

MANAGEMENT AND MANAGEMENT AND SOCIETYSOCIETY

Physical EnvironmentPhysical Environment

Organizations are the products of Organizations are the products of physical environment in the main. physical environment in the main. The physical environment of business The physical environment of business consists of two component- internal consists of two component- internal environment and external environment and external environment.environment.

The Organization and Its EnvironmentsThe Organization and Its Environments

Owners

EmployeesPhysical environment

Board of directorsCulture

Competitors

Internationaldimension

Political-

legaldimension

Technologicaldimension

Sociocultural

dimension

Economicdimension

Regulators Customers

Strategic

partnersSuppliers

Internal environment

Task environment ExternalenvironmentGeneral environment

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The Organization’s The Organization’s EnvironmentsEnvironments

Internal environment: The internal Internal environment: The internal environment consists mainly of the environment consists mainly of the organization’s owner, board of organization’s owner, board of directors, employee and culture.directors, employee and culture. Internal environment are the conditions Internal environment are the conditions and forces within an organization. The and forces within an organization. The controllable environment. controllable environment.


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The Internal The Internal EnvironmentEnvironment

Owner:Owner: someone who has legal property someone who has legal property rights to a business.rights to a business.

Board of directors:Board of directors: governing body governing body elected by a corporation’s stockholders elected by a corporation’s stockholders and charged with overseeing the general and charged with overseeing the general management of the firm.management of the firm.

Employees:Employees: those employed by the those employed by the organization.organization.

Physical work environment:Physical work environment: the firm’s the firm’s facilities.facilities.

External environmentExternal environment

External environment:External environment: everything everything outside an organization’s boundaries outside an organization’s boundaries that might affect it. The uncontrollable that might affect it. The uncontrollable environment. environment. – General environmentGeneral environment is a set of broad is a set of broad

dimensions and forces in an organization’s dimensions and forces in an organization’s surroundings that determine its overall surroundings that determine its overall contextcontext

– Task environmentTask environment is composed of is composed of specific groups and organizations that specific groups and organizations that affect the firm.affect the firm.


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The General EnvironmentThe General Environment

Economic dimensionsEconomic dimensions: The economic : The economic dimension of the general environment dimension of the general environment depends on the economic system of the depends on the economic system of the country in which the organization country in which the organization functions. The important economic functions. The important economic factors for business are inflation, interest factors for business are inflation, interest rates and unemployment-all of which rates and unemployment-all of which affect demand for different products.affect demand for different products.

Technical dimensions: Technical dimensions: It refers to It refers to the methods available for converting the methods available for converting resources into products or servicesresources into products or services.. Socio-cultural dimensions: Socio-cultural dimensions: The The socio-cultural dimension of the socio-cultural dimension of the general environment is made up of general environment is made up of the customs, mores, values, and the customs, mores, values, and demographics of the society in which demographics of the society in which the organization functions. the organization functions.


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The General EnvironmentThe General Environment

Political-Legal dimension: Political-Legal dimension: The political-The political-legal dimension of the general environment legal dimension of the general environment refers to the government regulation of refers to the government regulation of business and the general relationship business and the general relationship between business and government.between business and government.

International dimension: International dimension: Virtually every Virtually every organization is affected by the international organization is affected by the international dimension. It refers to the extent to which dimension. It refers to the extent to which an organization is involved in or affected by an organization is involved in or affected by business in other countries.business in other countries.


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Figure: Figure: McDonald’McDonald’s General s General EnvironmeEnvironmentnt


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The Task EnvironmentThe Task Environment

CompetitorsCompetitors: an organization that : an organization that competes with other organizations.competes with other organizations.

Customers:Customers: whoever pays money to whoever pays money to acquire an organization’s products or acquire an organization’s products or services.services.

Suppliers:Suppliers: an organization that provides an organization that provides resources for other organizations.resources for other organizations.

Regulators:Regulators: a unit that has the potential a unit that has the potential to control, legislate, or influence an to control, legislate, or influence an organization’s policies and practices. organization’s policies and practices.


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Task EnvironmentsTask Environments

Interest group:Interest group: a group organized by a group organized by its members to attempt to influence its members to attempt to influence organizations.organizations.

Strategic allies/ partner:Strategic allies/ partner: an an organization working together with one organization working together with one or more organizations in a joint venture or more organizations in a joint venture or other partnership. or other partnership.

Figure:Figure:McDonaldMcDonald

’s Task ’s Task EnvironmEnvironm

entent


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Organizational CultureOrganizational Culture

The set of values, beliefs, behaviors, The set of values, beliefs, behaviors, customs, and attitudes that helps the customs, and attitudes that helps the members of the organization members of the organization understand what it stands for, how it understand what it stands for, how it does things, and what it considers does things, and what it considers important.important.

Organizational culture is important for Organizational culture is important for it determines the “feel” of the it determines the “feel” of the organization.organization.

Its starting point is often the founder. Its starting point is often the founder.


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Managing Organizational Managing Organizational CultureCulture

The manager must understand the The manager must understand the current culture and then decide if it current culture and then decide if it should be maintained or changed.should be maintained or changed.

Managers must walk a fine line Managers must walk a fine line between maintaining a culture that between maintaining a culture that still works effectively versus still works effectively versus changing a culture that has become changing a culture that has become dysfunctional. dysfunctional.


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Organizational Organizational Environment Environment RelationshipsRelationships

Uncertainty:Uncertainty: a driving force that a driving force that influences many organizational influences many organizational decisions.decisions.

Competitive forces:Competitive forces:– Threat of new competitive entrants.Threat of new competitive entrants.– Competitive rivalry.Competitive rivalry.– Threat of substitute products.Threat of substitute products.– The power of buyers.The power of buyers.– The power of suppliers.The power of suppliers.


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How Organizations Adapt How Organizations Adapt to Their Environments?to Their Environments?Each organization must asses its own Each organization must asses its own unique situation then adapt according to the unique situation then adapt according to the wisdom of senior management, for wisdom of senior management, for example:example:– Information systems.Information systems.– Strategic responses.Strategic responses.– Mergers ,takeovers, acquisitions, and Mergers ,takeovers, acquisitions, and

alliances.alliances.– Organizational design and flexibility.Organizational design and flexibility.– Direct influence on the environment.Direct influence on the environment.


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How Organizations Respond to Their How Organizations Respond to Their Environments?Environments?

Informationmanagement

Socialresponsibility

Strategicresponses

TheOrganization

Directinfluence

Organizationdesign andflexibility

Task environment

General environment

Mergers,takeoversacquisitions,alliances

Managing Social Managing Social Responsibility:Responsibility:

Formal Organizational Formal Organizational DimensionsDimensions

Legal ComplianceLegal Compliance – Extent to which the organization conforms to Extent to which the organization conforms to

local, state, federal, and international laws.local, state, federal, and international laws.Ethical ComplianceEthical Compliance

– Extent to which members of the organization Extent to which members of the organization follow basic ethical/legal standards of behavior.follow basic ethical/legal standards of behavior.

Philanthropic GivingPhilanthropic Giving– Awarding of funds or gifts to charities or other Awarding of funds or gifts to charities or other

social programs.social programs.

Managing Social Managing Social Responsibility:Responsibility:

Informal Organizational Informal Organizational DimensionsDimensionsOrganizational Leadership and CultureOrganizational Leadership and Culture

– Leadership practices and the culture of the Leadership practices and the culture of the organization can help define the social organization can help define the social responsibility stance an organization and responsibility stance an organization and its members will adopt.its members will adopt.

Whistle BlowingWhistle Blowing– The organizational response to the The organizational response to the

disclosure by an employee of illegal or disclosure by an employee of illegal or unethical conduct on the part of others unethical conduct on the part of others within the organization is indicative of the within the organization is indicative of the organization’s stance on social organization’s stance on social responsibility.responsibility.

How environment affects How environment affects organizations?organizations?

a) Environmental change and a) Environmental change and complexitycomplexity

b) Competitive forcesb) Competitive forces The threat of new entrantsThe threat of new entrants Competitive rivelryCompetitive rivelry The threat of substitute productsThe threat of substitute products The power of suppliers The power of suppliers

c) Environmental turbulencec) Environmental turbulence


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Environmental Environmental TurbulenceTurbulence

Terrorist attacks.Terrorist attacks. Workplace violence.Workplace violence. Computer viruses.Computer viruses. Such crises affect organizations in Such crises affect organizations in

different ways.different ways.

chapter-three(3) management and society management and society

Documents

uncontrollable environment

organizations products

physical work environment

organizations surroundings

organizations owner

organizations policies

organizations boundaries

general management