MANAGEMENT CHAPTER 3
Types of Approach Advocacy Groups Use to Try to Influence companies
- Public Communications - Media Advocacy - Product Boycott
5 components that make up Specific Environment
1. Customers 2. Competitor 3. Suppliers 4. Industry Regulations 6. Advocacy Groups
4 Components of the general environment
1. Economy 2. Technological Component 3. Sociocultural Component 4. Political/Legal Component
3 Basic Characteristics of Changing External Environments
1. Environmental Change 2. Environmental Complexity 3. Resource Scarcity
3 Step Process to Make Sense of The Changes in External Environment
1. Environmental Scanning 2. Interpreting Environmental Factors 3. Acting on Threats and Opportunities
Consistent Organizational Cultures
A company culture in which the company actively defines and teaches organizational values, beliefs, and attitudes
-Competitive Analysis
A process for monitoring the competition that involves identifying competition, anticipating their moves , and determining their strengths and weaknesses
Advocacy Groups
Advocacy groups cannot force organizations to change their practices. However, they can use a number of techniques to try to influence companies
Interpreting Environmental Factors
After scanning the environment for information, managers must make sense of the data they have gathered. Threats mean potential harm to an organization and managers take steps to protect the company from further damage. By contrast, when managers interpret environmental events as opportunities, they will consider strategic alternatives for taking advantage of the event to improve company performance.
Acting on Threats and Opportunities
Managers have to decide how to respond to these environmental factors. However, deciding what to do under conditions of uncertainty is difficult. Managers are never completely confident that they have all the information they need, or that they correctly understand the information they have.
- Competitors
Companies in the same industry tht sell similar products or services to customers
- Suppliers
Companies that provide materials, human, financial, and informational resources to other companies
- Relationship Behavior
Focuses on establishing a mutually beneficial, long-term relationship between buyers and suppliers
- Cognitive Maps
Graphic depictions that summarize the perceived relationships between environmental factors and possible organizational actions
- Advocacy Groups
Groups of concerned citizens who band together to try to influence the business practices of specific industries, business, and profession
- Simple Environment
Have few environmental factors
- Complex Environment
Have many environmental factors
Uncertainty?
How well managers can understand or predict the external changes and trends affecting their businesses
Proactive Monitoring of Customers
Identifying and addressing customer needs, trends, and issues BEFORE they occur.
- Opportunistic Behavior
In which one party benefits at the expense of the other
Reactive Customer Monitoring
Involves identifying and addressing customer trends and problems AFTER they occur.
Product Boycott
Involves protesting a company's actions by persuading consumers not to purchase its product or service
Competitor Component
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 is the competition. Consequently, companies need to keep close track of what their competitors are doing.
Organization Heroes
Organizational people celebrated for their qualities and achievements within an organization
Industry Regulation
Regulations and rules that govern the business practices and procedures of specific industries, businesses, and professions
Industry Regulation Component
Regulatory agencies affect businesses by creating and enforcing rules and regulations to protect consumers, workers, or society as a whole. Surveys indicate that managers rank government regulation as one of the most demanding and frustrating parts of their jobs.
Public Communications
Relies on voluntary participation by the news media and the advertising industry to send out an advocacy group's message out Example: A public service campaign
Environmental Scanning
Searching the environment for important events or issues that might affect an organization
Business Confidence Indices
Shows how confident actual managers are about future business growth
Organizational Stories
Stories told by organizational members to make sense of organizational events and changes and to emphasize culturally consistent assumptions, decisions, and actions
Resource Scarcity
The abundance or shortage of critical organizational resources in an organization's external environment
Company Mission
The business' purpose or reason for existing
Economy
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.
Specific Environment
The customers, competitors, suppliers, industry regulations, and advocacy groups that are unique to an industry and directly affect how a company does business
-Supplier Dependence
The degree to which a company relies on that supplier because of the importance of the supplier's product to the company and the difficulty of finding other sources for that product.
-Buyer Dependence
The degree to which a supplier relies on a buyer because of the importance of that buyer to the supplier's sales and the difficulty of finding other buyers of its products
General Environment
The economic and the technological, sociocultural, and political/legal trends that indirectly affect ALL organizations
External Environments
The forces and events outside a company that have the potential to influence or affect it.
Technology
The knowledge, tools, and techniques used to transform inputs (raw materials, information, and so on) into outputs (products and services)
Environmental Complexity
The number and the intensity of external factors in the environment that affect organization
Media Advocacy
Typically involves framing the group's concerns as public issues (affecting everyone); exposing questionable, exploitative, or unethical practices; and creating controversy that is likely to receive extensive news coverage Example: PETA
Political/ Legal Component
The political/legal component includes the legislation, regulations, and court decisions that govern and regulate business behavior. In recent years, news laws and regulations have imposed additional responsibilities on companies. Unfortunately, many managers are unaware of these new responsibilities. Managers must be educated about the laws, regulations, and potential lawsuits that could affect business
Behavioral Addition
The process of having managers and employees per- form new behaviors that are central to and symbolic of the new organizational culture that a company wants to create
Behavioral Substitution
The process of having managers and employees perform new behaviors central to the "new" organizational culture in place of behaviors that were central to the "old" organizational culture
Environmental Change
The rate at which a company's general and specific environments change
- Dynamic environment
The rate of environmental change is fast
- Stable Environments
The rate of environmental change is slow
Organizational Culture
The set of key values, beliefs, and attitudes shared by members of the organization
Sociocultural Component
The sociocultural component of the general environment refers to the demographic characteristics and general behavior, attitudes, and beliefs of people in a particular society.
- Punctuated Equilibrium Theory
The theory that companies go through long periods pf stability (equilibrium) followed by short periods of dynamic, fundamental change (revolution), and finishing with a return to stability (new equilibrium)
Internal Environment
The trends and events within an organization that affect the management, employees, and organizational culture
Customer Component
There are two basic strategies for monitoring customers: reactive and proactive.
Visible Artifacts
Visible signs of an organization's culture, such as the office design and layout, company dress code, and company benefits and perks, like stock options, personal parking spaces, or the private company dining room