Survey of Management Chapter 3

Kinds of environments that influence organizations

-general environment -specific environment

Henry Mensburg

Henry Mendsburg

changing demographic characteristics affects how?

People run their businesses

What determines the length of punctuated equilibrium theory?

depends on the industry.

SWOT analysis, strengths and weaknesses are?

internal

-Technology keeps changing -What is Moore's law?

invented processing chip, predicted that every 2 yrs. computer would double in processing speed but stay the same price

A Product Boycott

is a tactic in which an advocacy group actively tries to convince consumers to not purchase a company's product or service

(environmental change) Uncertainty

is how well managers can understand or predict the external changes and trends affecting their businesses

*Supplier Dependence

is the degree to which a company relies on a supplier because of the importance of the supplier's product to the company and the difficulty of finding other sources of that product

*buyer dependence

is the degree to which a supplier relies on a buyer because of the importance of that buyer to the suppliers and the difficulty of selling its products to other buyers

we need to know what the competitor is doing so they don't take our?

market share

Business Confidence indices

show how confident actual managers are about future business growth

Litmus test

-if it is in the general it tends to be Broad, thus covering most industries -if it is specific then it is Targeting

Specific Environment

-is unique to that firm's industry and directly affects the way it conducts day-to-day business. -The specific environment, includes customers, competitors, suppliers, industry regulation, and advocacy groups.

growing economy

-more people are working and more people have money to spend -provides an environment favorable to business growth

Give some examples of changing demographic characteristics

-number of people with particular skills -the growth or decline in particular population segments (single or married; old or young; men or women; Caucasians, Hispanics, Blacks, or Asians; etc.)

What creates organizational culture?

-organizational stories -organizational heroes -organizational founder -organizational heroes -organizational rituals -organizational language -material (organizational) symbols

2 variations of environmental complexity

-simple environment -complex environment

2 types of environments (in reference to environmental change)

-stable environments -dynamic environments

How many components are in the general?

4

how many components are in the specific?

5

There are __ components of external environments

9

Sociocultural changes in behavior, attitudes, and beliefs also affect the demand for?

A business's products or services

Because economic statistics can be such poor predictors, some managers try to predict future economic activity by keeping track of?

Business confidence

Another area in which companies face potential legal risks these days is from?

Customer-initiated lawsuits

general environment

The general environment consists of the economy and the technological, sociocultural, and political/legal trends that indirectly affect all organizations. Changes in any sector of the general environment eventually affect most organizations.

What is the SWOT analysis?

a benchmarking tool and positions us against our competitors

Environmental Change is the rate at which

a company's environments change

complex environments

a lot or all are changing

1/2 punctuated equilibrium theory

all companies go through long periods of simple stable change followed by short periods of dynamic complex change

External environments

are the forces and events outside a company that have the potential to influence or affect it.

Which do companies typically go through, stable environmental change or dynamic environmental change?

both

What is better, strong or weak organizational cultures

both types of cultures earn money. But, all organizations that have lasted 50+ years are strong organizational cultures.

The political/legal component includes the legislation, regulations, and court decisions that govern and regulate?

business behavior

In stable environments, decision makers....?

can be more deliberate

Proactive monitoring is about adapting to?

change

To maintain customer support, you should monitor customers'?

changing wants and needs (this is critical to business success)

(Environmental Change) 1/2 punctuated equilibrium theory states?

companies go through long, simple periods of stability (equilibrium), followed by short, complex periods of dynamic, fundamental change (revolutionary periods), finishing with a return to stability (new equilibrium).

Competitive analysis

companies need to keep close track of what their competitors are doing

suppliers

companies that provide material, human, financial, and informational resources to other companies

industry regulation

consists of regulations and rules that govern the practices and procedures of specific industries, businesses, and professions

Customers purchase products and services; so, companies cannot exist without?

customer support

organization's specific environment directly or indirectly affect

directly

External environments are ________ trends and events within an organization that affect the management, employees, and organizational culture.

external

In dynamic environments, the rate of environmental change is?

fast

relationship behavior

focuses on establishing a mutually beneficial, long-term relationship between buyers and suppliers

Unlike regulations, advocacy groups cannot?

force organizations to change their practices

What do managers rank as the number 1 demanding and frustrating parts of their jobs?

government regulations

A key factor influencing the relationship between companies and their suppliers?

how dependent they are on each other

reactive strategy for monitoring customers

identifying and addressing customer trends and problems after they occur

Companies must embrace new technology and use it to

improve products and services or decrease costs. (if they don't they will lose out to companies that do)

Opportunistic behavior between buyers and suppliers will never be completely eliminated. However, many companies believe that both buyers and suppliers can benefit by?

improving the buyer-supplier relationship

general environments directly or indirectly influence?

indirectly

Technology is the knowledge, tools, and techniques used to transform

input into output

technology punctuated equilibrium theory example

lately has seen drastic change over a long period of time

Weak cultures

mix of subcultures

In dynamic environments, decision makers........?

must be nimble and quick

simple environments

not very many are changing

opportunistic behavior

one party benefits at the expense of the other

a high degree of buyer or seller dependence can lead to?

opportunistic behavior

2 strategies for monitoring customers

reactive and proactive

In stable environments the rate of environmental change is?

slow

How does resources relate to the 9 components of environmental change

the 9 components are changing and you are trying to catch up and change everything; resources are squandered

Resource scarcity

the degree to which an organization's external environment has an abundance or scarcity of critical organizational resources

attention to detail

the degree to which employees are expected to exhibit precision, analysis, and attention to detail

people orientation

the degree to which management decisions take into consideration the effect on people within the organization. (very family oriented) (belief that a happy employee yields a happy customer)

outcome orientation

the degree to which managers focus on results or outcomes rather than on the techniques and processes used to achieve those outcomes

Political/Legal Component Managers must be educated about?

the laws, regulations, and potential lawsuits that could affect business

Environmental complexity

the number of external factors in the environment that affect organizations

Proactive monitoring

trying to sense events, trends, and problems before they occur

list the 5 dimensions of culture

-Innovation, risk taking, and aggressive -Attention to detail -outcome orientation -people orientation -team orientation

3 main aspects of the Political/Legal Component?

-Legislation -Regulations -court decisions

2 main mistakes managers make when they do their competitive analysis?

-They tend to focus on only two or three well-known competition with similar goals and resources. -They underestimate potential competitors' capabilities. When this happens, managers don't take the steps they should to continue to improve their products or services. The result can be significant decreases in both market share and profits.

List the Specific environment components

-competition -customers -advocacy groups -suppliers -industry regulation

Shrinking economy

-consumers have less money to spend and buy fewer products -individual businesses have a hard time experiencing growth

3 aspects of competitor analysis

-deciding who your competitors are -anticipating competitors moves -determining competitors' strengths and weaknesses

List the general environment components

-economy -technologies -sociocultural -political legal

Advocacy Groups

-groups are groups of concerned citizens who band together to try to influence the business practices of specific industries.

The sociocultural component of the general environment refers to?

-the demographic characteristics of a society -general behaviors, attitudes, and beliefs of a people in a particular society

A Media Advocacy Approach

-typically involves framing issues as public issues; exposing questionable, exploitative, or unethical practices -to publicize the message they buy media time or create a controversy that is likely to receive media coverage

Characteristics of changing External Environments

1) Environmental Change 2) Environmental complexity 3) Resource Scarcity 4) Uncertainty

In recent years, news laws and regulations have imposed additional responsibilities on companies. Why is this unfortunate for many companies today?

Because it poses financial risk because many managers are unaware of these new responsibilities

To show the Business Confidence Indices, Furtune Business Confidence Index is a monthly survey of?

Chief financial offices at large fortune 1000 firms

SWOT analysis, opportunities and threats are?

External

Explain the LCD TV example with resource scarcity

For example, flat-screen, LCD televisions are more expensive than regular TVs is because there aren't enough LCD screen factories to meet demand. Furthermore, the manufacturing process is complex and difficult to manage.

From a managerial perspective, the best medicine against legal risk is ?

Prevention

Identify customer concerns by listening closely to customer complaints. This is an example of which type of customer monitoring strategy?

Reactive

Public service announcements for "world tobacco day" are examples of?

The Public Communications approach

The rate of environmental change affects many organizational aspects, particularly?

decision making

The Public Communications approach

relies on voluntary participation by the news media and advertising industry to get an advocacy's message out

it is not only important for companies to listen to customer complaints but also to?

respond effectively (demonstrates support for the customer)

As a manager, it is your responsibility to educate yourself about the laws and regulations and potential lawsuits that could affect your business. Failure to do so may put you and your company at risk of?

sizable penalties, fines, or legal charges.

organizational culture

the set of key values, beliefs and attitudes shared by organizational members

the internal environments consists of?

the trends and events within an organization that affect the management, employees, and organizational culture

innovation, risk taking, aggressive

these companies can only beat themselves, they must make their own products obsolete for them to stay in business

internal environments affect what people....

think, feel, and do at work

define sociocultural

values, attitudes, and beliefs we hold as a nation

Bakery punctuated equilibrium theory example

very long period of stable change and then industrial era happened and caused the change to be drastic

strong organizational cultural

where the values, attitudes and beliefs are widely shared intensely held throughout organization members

often the differences between business success and failure comes down to?

whether your company is doing a better job of satisfying customer wants and needs than its competitors