Mana Ch 3

Company Founder

Organizational Stories and Org Heroes

Resource Scarcity

Abundance or shortage of critical organizational resources in an org's external enviro --tv resources and tech, decrease prices as advance

Advocacy Programs and 3 types

Advocacy programs—groups of concerned citizens who band together to try to influence the business practices of specific industries, businesses, and professions o Public Communicaitons: relies on voluntary participation by news media and advertising industry to send out an advocacy message, public service message o Media Advocacty—aggressive; framing issues as public issues, exposing questionable exploitative or unethical practices, and forcing media coverage by buying media time or xreating controversy that is likely to receive news coveage o Product Boycott: advocacy group tactic that involves protesting a company's actions by persuading consumers not to purcxhase a god or service Examples :PETA

Customers

Customers: impt to monitor o Reactive Customer Monitoring: identifying and addressing customer trends and problems after they occur (listen to complaints) o Proactive: identifying and addressing customer needs, trends and issues before they occur

Enviro Complexity

Enviro Complexity # and intensity of external factors in enviro that affects organizations • Simple enviros—few enviro factors (dairy/milk) • Complex enviros—many factors (recording industry) • ½ Punctuated Equilibrium Theory: companies cycle through simple and complex environments 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.

External Environment

Forces and events outside a company that have potential to influence or affect it -2 types: general and specific

Organizational Rituals

Org Language and Material Symbols

Environmental Change

Rate at which a company's general and specific environments change • Stable enviros—rate of enviro change=slow (bread), more deliberate decision makers • Dynamic enviros—rate of change is fast (sports), decision makers must be quick— -The fast-paced world of EA Sports is a good example of a dynamic environment. EA Sports business environment changes quickly. With development and marketing costs exceeding $25 million for some games, unpopular games could signal ruin for the company. While it would seem that companies would either be in stable external environments or dynamic external environments, recent research suggests that companies often experience both stable and dynamic external environments. Punctuated equilibrium theory says that 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). ½ Punctuated Equilibrium Theory: companies go through long periods of stability during incremental changes followed by should dynamic changes and ending w stability

1. General Enviro

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. For example, most businesses benefit when the Federal Reserve lowers its prime lending rate, because banks and credit card companies will then lower the interest rates they charge for loans. Consumers, who can then borrow money more cheaply, will borrow more money to buy homes, cars, refrigerators, and large-screen TVs.

Internal Environment

Trends and events within an organization that affect the management, employees, and organizational culture—(affects what people think, feel and do at work) • Organizational Culture: set of key values, beliefs, and attitudes shared by organizational members

Successful Organizations are :

adapatable, consistent, clear vision, involved

• Political/legal trends—

legislation, regulations, and court decisions that govern and regulate bus behavior

Suppliers

provide material, human, financial and informational resources; o Supplier Dependence: degree to which ha company relies on that supplier bc of the importance of their product to company and difficulty to find resources o Buyer Dependence: degree to which ha supplier relies on a buyer bc of the importance of that buyer to the suppliers sales and the difficulty of finding other buyers of its prod o Opportunisitic Behavior: one party benefits at the expense of another o Relationship Behavior: estabilishing a mustually beneficial relationship bw buyers and sellers

Sociocultural Trends

refers to demographics, behavior, attitudes, beliefs of society..influence: o Changes in demographics affect business staffing o Behavior,attitudes, and beliefs affect demand

4 Characterisitcs of External Enviro Change

1. Environmental Change 2. Enviro Complexity 3. Resource Scarcity 4. Uncertainty

2 kinds of enviro afferct organizations

1. General Enviro 2. Specific Enviro

Specific Enviro

By contrast, each organization has a specific environment that 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.

Competitors

Competitor: companies in same industry that sell similar prod/services o Competitive Analysis SWOT • Determine who competitors are • Anticipate competitor moves ] • Determine swot o Managers tend to make two mistakes 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.

Uncertainty

How well managers can understand or predict the external changes and trends affexting business; • Low uncertainty when change and complexity are low are resource scarcity is low • Uncertainty is high when change and complexity are extensive and resource scarcity is a problem = unpredictable Punctuated Equilibrium Threory IN relation to Griffin hospital—period of little change ended and people start going to competitors and everything changes immediately...long period of central stable change....competitor components change in specific category, customers and demographics change so request new needs, more discretionalry income, social conponent changing with roads so people could go there, new suppliers providing new technology and new machinery—new regulations w new suppliers and new technology In short period goes through dynamic and complex change... Talk about 9 differnet changing components and during dynamic complex change resource scarcity, enviro change, and enviro complexity High uncertainty causes resource scarcity bc valuable skill sets do not work anymore (technology or human resources...inefficient)

5 Dimensions of Culture

Strong vs weak 1. Innovation o risk taking, and aggressive (the degree to which employees are encouraged to be innovative and take risks), (Intel/microsoft—aggressive about tech and being #1, domination) (Coca Cola, aggressive in sales, in all countries; Post Office) 2. Attention to Detail o (the degree to which employees are expected to exhibit precision, analysis, and attention to detail), (Chaparrel Steal) (GE) 3. Outcome Orientation o (the degree to which managers focus on results or outcomes rather than on the techniques and processes used to achieve those outcomes), (Nordstrom, experience approach) 4. People Orientation o (the degree to which management decisions take into consideration the effect on people within the organization), (family oriented, happy employee is happy customer) (David Letterman) 5. Team Orientation o (the degree to which work activities are organized around teams rather than individuals).

Economy

o Economic statiscts can be poor predictors, use future economic activity to keep track of confidence • §Growing vs. shrinking economies--The current state of a country's economy affects most organizations operating in it. In a growing economy, more people are working and have more money to spend. A growing economy provides an environment favorable to business growth. In contrast, in a shrinking economy, consumers have less money to spend, and relatively fewer products, making growth for individual businesses more difficult. • §Predicting future economic activity--Because economic statistics can be such poor predictors, some managers try to predict future economic activity by keeping track of business confidence. Business confidence indices show how confident actual managers are about future business growth. For example, the Fortune Business Confidence Index is a monthly survey of chief financial offices at large Fortune 1000 firms. • Business Confidence Indicies: how confident managers are about future growth--Another widely cited measure is the U.S. Chamber of Commerce Business Confidence Index, which asks 7,000 small business owners to express their optimism (or pessimism) about future business sales and prospects. Managers often prefer business confidence indices to economic statistics, because they know that the level of confidence reported by real managers affects their business decisions. In other words, it's reasonable to expect managers to make decisions today that are in line with their expectations concerning the economy's future.

Industry Regulations

• Industry regulations—regulations and rules that govern the practices and procedures of specific industries, businesses and professions --Regulatory agencies affect businesses by creating and enforcing rules and regulations to protect consumers, workers, or society as a whole. Overall, the number and cost of federal regulations has nearly tripled in the last 25 years. However, businesses are not just subject to federal regulations. For every $1 the federal government spends creating regulations, businesses spend $45 to comply with them. They must also meet state, county, and city regulations, too. Surveys indicate that managers rank government regulation as one of the most demanding and frustrating parts of their jobs.

Technology

• Technology—knowledge, tools and techniques used to transform inputs into outputs --Technology is the knowledge, tools, and techniques used to transform input into output. For example, the knowledge of authors, editors, and artists (technology) and the use of equipment like computers and printing presses (also technology) transformed paper, ink, and glue (raw material inputs) into this book (the finished product). In the case of a service company such as an airline, the technology would consist of equipment, such as airplanes, repair tools, and computers, and the knowledge of mechanics, ticketers, and flight crews. The output would be the service of transporting people from one place to another. o 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 competitors who do. Chapter 7, on Organizational Change and Innovation, provides a more in-depth discussion of how technology affects a company's competitive advantage.