week 8 managing the environment Özge can – 14.11.2011
TRANSCRIPT
WEEK 8
MANAGING THE ENVIRONMENT
Özge Can – 14.11.2011
Social Responsibility
Social Responsibility The way a company’s managers and
employees view their duty or obligation to make decisions that protect, enhance, and promote the welfare and well-being of the society as a whole
Corporate Social Responsibility (CSR): The idea that businesses have obligations to society beyond the pursuit of profits
I. The Classical View
Management’s only social responsibility is to maximize profits (create a financial return) by operating the business in the best interests of the stockholders (owners of the corporation).
Expending the firm’s resources on doing “social good” is not preferable
II. Socioeconomic View
Management’s social responsibility goes beyond making profits to include protecting and improving society’s welfare.
Corporations are not independent entities responsible only to stockholders. Firms have a moral responsibility to larger society to become involved in social, legal, and political issues.
Why Be Socially Responsible?
Building good image and reputation Responsibility for bearing the costs of
protecting stakeholders, providing health care and income, paying taxes and etc
Promoting a climate of caring in general Better environment and better society Superiority of prevention over cures
Open Systems
Open systems Organizations are affected by, and affect,
their environment. They are systems open to external world.
Set of forces and conditions that operate beyond an organization’s boundaries but affect a manager’s ability to acquire and utilize resources
Components of external environment: Task Environment General Environment
What is External Environment?
Forces in the External Environment
What Should Managers Do to Deal with External Environment? Environmental analysis
Environmental scanning => searching for and sorting through information about the environment
Forecasting and benchmarking
Adapting to environment: changing yourself
or Try to influence/ change the environment
Task (Competitive) Environment Set of forces and conditions that originate with
suppliers, distributors, customers, and competitors and affect an organization’s ability to obtain inputs and dispose of its outputs because they influence managers on a daily basis
Direct and immediate impact on organization
Suppliers Distributors Customers Competitors & Potential Competitors
General (Macro) Environment The wide-ranging global, economic,
technological, socio-cultural, demographic, political, and legal forces that affect an organization and its task environment
Economic forces Technological forces Socio-cultural forces Demographic forces Political/ legal forces Global forces
Task Environment: Suppliers Suppliers: Individuals and
organizations that provide an organization with the input resources that it needs to produce goods and services Raw materials, component parts, labor
(employees)
Material shortages and lack of substitutes Managers can have stronger bargaining power
by increasing the number of suppliers of an input
Outsourcing Purchase of inputs from foreign suppliers
or the production of inputs abroad to lower production costs and improve product quality or design
Global outsourcing => outsourcing across countries
Task Environment: Suppliers
Task Environment: Distributors Distributors
Organizations that help other organizations sell their goods or services to customers
Examples: package delivery companies, super market retailers
Task Environment: Customers Customers
Individuals and groups that buy the goods and services that an organization produces
Consumers or businesses Identifying an organization’s main
customers and producing the goods and services they want is crucial to organizational and managerial success.
Task Environment: Competitors Competitors
Organizations that produce goods and services that are similar to a particular organization’s goods and services
Potential Competitors Organizations that presently are not in
the task environment but could enter if they choose so
Potential Competitors: Barriers to Entry Barriers to Entry => Factors that make it
difficult and costly for new companies to enter a particular task environment or industry
Economies of scale Cost advantages associated with large
operations Brand loyalty
Customers’ preference for the products of organizations currently existing in the task environment.
Government regulations
Barriers to Entry
General (Macro) Environment The wide-ranging global, economic,
technological, socio-cultural, demographic, political, and legal forces that affect an organization and its task environment
Economic forces Technological forces Socio-cultural forces Demographic forces Political/ legal forces Global forces
General Environment: Economic Forces Interest rates, inflation, unemployment,
economic growth, and other factors that affect the general health and well-being of a nation or the regional economy of an organization
General Envrionment: Technological Forces Technology: The combination of skills and
equipment that managers use in the design, production, and distribution of goods and services
Technological Forces: Outcomes of changes in the technology that managers use to design, produce, or distribute goods and services
General Environment: Socio-cultural Forces
Pressures emanating from the social structure of a country (or society) or from the national culture
Social Structure The system of relationships established
between individuals and groups in a society National Culture The set of values, attitudes, beliefs, and
norms shared by a majority of the inhabitants of a country
General Environment: Demographic Forces
Outcomes of change in, or changing attitudes toward, the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class
General Environment: Political & Legal Forces Outcomes of changes in laws and
regulations
Such as: regulation of industries, the privatization of organizations, and increased emphasis on environmental protection
Globalization
Globalization: The set of specific and general forces that work
together to integrate and connect economic, political, and social systems across countries, cultures, or geographical regions so that nations become increasingly interdependent and similar
Need of new thinking and new managerial skills
Globalization
A shift toward a more open global environment in which capital flows more freely
Four principal forms of capital: Human capital => flow of people Financial capital => flow of money Resources capital => flow of natural
resources, parts, components Political capital => flow of power and
infleunce
Globalization
Companies search for new opportunities to create profit and wealth.
Declining barriers to international trade and investment Free trade, new trade aggreements
Declining barriers of distance and culture
Management Skills for The Global Marketplace:
Effective global managers need:
Global strategic skills Communication skills Cultural intelligence and global mind set Transfer of knowledge skills Team building skills Organization skills
Next Week: Mid-Term Exam November 20, 2012 – Tuesday Hours: 13:00-14:30 Classes: O 001 - O 002 – O 003
Good luck!
Exam Content:
Textbook Chapters: 1-3-4-5-6 Chapter-2 is not included Powerpoint slides
Exam Content:
You are responsible for all topics that we have covered so far BUT please pay special attention to:
Four tasks of management (Chapter 1) Levels and skills of management (Chapter
1) Big five personality traits and others
(Chapter 3) Emotions, values, job attitudes and
organizational culture (Chapter 3)
Exam Content:
Diversity of the workforce; sources of diversity; management of diversity (Chapter 5)
Stakeholders and managers’ responsibilities and ethical behavior to them (Chapter 4)
Rules and sources of ethical decision-making; social responsibility (Chapter 4)
External environment: Components of task and general environments; how each one can effect the company and managers (Chapter 6)
Exam Format:
Multiple choice questions (% 60-70)
Short-essay questions (1-2 Qs: % 30-40) No definition will be asked; do not
memorize anything I will be seeking to receive your take;
opinions comments on a managerial issue based on the concepts and ideas discussed in this course.