MGMT 309 Chapter 3

Threat of New Entrants

- New competitors can easily enter a new market or market segment. - Ex: Self-Published Books is cheap and hurts major publishing companies.

Acquisitions

- Occurs when one firm buys another. - May take the name or keep separate names.

Merger

- Occurs when two or more firms combine - Two firms have strength in different but complementary markets.

Newer Facilities

- Open Arrangement - People work in large rooms - Freestanding computer workstations - Small rooms off to the side for private business.

Competitors

- Other organizations that compete with is for resources. - Ex. Customer Dollars

Economic Dimension

- Overall health and vitality of the economic system in which the organization operates. - Growth, Inflation, Interest Rates, and Unemployment

Organizational Culture

- SET values, beliefs, behaviors, customs, and attitudes that help members of the organization understand what it stands for, how it does things, and what it considers important. - Foundation of the organization's internal environment. - Plays a major role in shaping managerial behavior.

Sociocultural Dimension

- The customs, morals, values, and demographic characteristics of the society in which the organization functions. - Determine the products, services, and standards of conduct that society is likely to value.

Threat of Substitute Products

- The extent to which alternative products or services may supplant or diminish the need for existing products or services - Ex: Netflix replaced Blockbuster

Power of Buyers

- The extent to which buyers of the products or services in an industry can influence suppliers. - Ex: Not many students earn top scores, so universities offer generous scholarships.

Power of Suppliers

- The extent to which suppliers can influence potential buyers. - Ex: Local electric company

Competitive Rivalry

- The nature of the competitive relationship between dominant firms in the industry. - Ex: Coca-Cola and Pepsi Co.

General Environment

- The set of broad dimensions and forces in its surroundings that create its overall context. - Economic, technological, sociocultural, political-legal, and international dimensions.

Culture Problems

- These problems may arise when two companies merge. - The growth of rival factions within an organization.

Strategic Partners (Strategic Allies)

- Two or more companies that work together in joint ventures or other partnerships. - Help companies get help from other companies the expertise they lack.

Corporate Governance

Who is responsible (and accountable) for governing the actions of a business.

Customers

Whoever pays money to acquire an organization's products or services.

Culture of Organization's

- Isn't necessarily found throughout an entire organization. - Different departments have different cultures. - Can become a weakness.

Temporary Employees

- Individuals hired for short periods of time with no expectation of permanent employment. - Greater flexibility, lower wages, don't participate in benefits programs. - Employees feel no loyalty to an organization.

Boundary Spanner

- An employee (sales representative or purchasing agent) who spends much time in contact with others outside the organization. - Learn what other organizations are doing

Age Distributions

- Average age of U.S. workforce is increasing. - Baby Boom generation getting older. - Declining birthrates of post-Baby Boom generations. - Improved health and medical care. - Retirement Age is increasing. - Older workers have more experience and are more productive. - Older workers require higher levels of insurance coverage and medical benefits.

Major Ways to Shape Culture

- Bring outsiders into important managerial positions. - Adopting new slogans. - Founders actions - Heroes - History of Successes - Symbols - Shared experiences. - Telling new stories. - Staging new ceremonies. - Breaking with tradition.

Reasons For Increasing Diversity and Multiculturalism

- Changing demographics in the labor force. - Increased awareness that diversity improves the quality of the workforce. - Legislation and legal action. - The globalization movement.

Environmental Turbulence

- Consists of changes in the environment that may or may not be expected. - Ex: Terrorist Attacks, Natural Disasters, Political Unrest, Health Care Crisis.

Influence of Customers

- Creating new use for products - Finding entirely new customers - Taking customers away from competitors - Convincing customers they need something new

External Environment

- Everything outside an organization's boundaries that might affect it. - General Environment and Task Environment

Diversity

- Exists in a group or organization when its members differ from one another along one or more important dimensions. - Age, Gender, and Ethnicity

Partnership Alliance

- Firm undertakes a new venture with another firm. - Easing entry into new markets - Expanding its presence in a current market.

Direct Influence

- Firms can influence their suppliers by signing long-term contracts with fixed prices as a hedge against inflation. - Any major activity in which a firm engages affects its competitors.

Importance of Political-Legal Dimension

1. Legal system partially defines what an organization can and cannot do. 2. Pro- or Antibusiness sentiment in government influences business activity. 3. Political stability has ramifications for planning.

Labor Unions

An organization formed by workers to strive for better wages and working conditions.

Glass Ceiling

Describes a barrier that keeps women from advancing to top management positions in many organizations.

Key Element or Managing Organization's Environment

Determining the ideal alignment between the environment and the organization and then working to achieve and maintain that alignment.

Hostile Takeover

Buys another firm against its will.

Most/High Environmental Uncertainty

Complex and Dynamic

Internal Environment

Conditions and forces within the organization.

Regulatory Agencies

Created by the government to PROTECT THE PUBLIC from certain business practices or to protect organizations from one another.

Crisis Plans and Teams

Development of ways to be prepared for environmental turbulence.

Organizational Culture Over Time

Develops and Blossoms

Moderate Environmental Uncertainty

Dynamic but Simple Environments

Regulators

Elements that have the potential to control, legislate, or otherwise influence an organization's policies and practices.

Permanent Employees

Employees who work directly for the employer and have an on-going contract.

Pro-Business

Firms find it easier to compete and have fewer concerns about antitrust issues.

Anti-Business

Firms may find their competitive strategies more restricted and have fewer opportunities for mergers and acquisitions because of antitrust concerns.

Mechanistic Organization Design

Formal and rigid rules and relationships.

Board of Directors

Governing body elected by the stockholders and charged with overseeing the general management of the firm to ensure that it is being run in a way that best serves the stockholders' interests.

Result of Business Scandals

Have caused Boards of Directors of a company to move from passive to more in control.

Information Management

Important when forming an initial understanding of the environment and when monitoring environments for signs of change.

Influence of Regulators

Influencing through Lobbying and Bargaining

Importance of Organizational Culture

It can shape the firm's overall effectiveness and long-term success, and increase productivity.

Light Weighting

Making a product more efficient for the consumer/environment by using different or less materials.

Low Levels of Uncertainty

Might choose a design with basic rules, regulations, and standard operating procedures.

High Levels of Uncertainty

Might choose a design with few standard operating procedures.

Organic Organization Design

More flexible and permits organizations to respond quickly to environmental change.

Population Group With Largest Decline by 2030

Non-Hispanic Whites

Suppliers

Organizations that provide resources for other organizations.

Interest Groups

Organized by their members to try to influence organizations.

Civil Rights Act of 1964

Outlawed discrimination based on race, color, religion, sex, or national origin.

Michael Porter

Person who introduced the Five Competitive Forces

Political-Legal Dimension

Refers to government regulation of business and the relationship between business and government.

Ethnicity

Refers to the ethnic composition of a group or organization.

National Labor Relations Act of 1935

Requires organizations to recognize and bargain with a union if that union has been legally established by the organization's employees.

Organizational Growth

Results in culture being modified, shaped, and refined by symbols, stories, heroes, slogans, and ceremonies.

Lobbying

Sending a company or industry representative to Washington in an effort to influence relevant agencies, groups, and committees.

Task Environment

Specific external organizations or groups that influence an organization.

Least Environmental Uncertainty

Stable and Simple Environments

Physical Work Environment

The actual physical environment of the organization and the work that people do.

Multiculturalism

The broad issues associated with DIFFERENING values, beliefs, behaviors, customs, and attitudes held by people in different cultures.

Degree of Uncertainty

The driving force that influences many organizational decisions.

International Dimension

The extent to which an organization is involved in or affected by businesses in other countries.

Degree of Homogeneity

The extent to which the environment is relatively simple (few elements, little segmentation) or relatively complex (many elements, much segmentation).

Rate of Change

The extent to which the environment is relatively stable or relatively dynamic.

Technological Dimension

The methods available for converting resources into products or services.

Owners

The people who have the legal property rights to a business.

Employees

The people who make the products and provide the services that allow a firm to exist.

Environmental Scanning

The process of actively monitoring the environment through activities such as observation and reading.

Gender Parity

When 50% of women hold about half the jobs at all levels.

Organization Becomes More Multicultural

When an organization begins to sell to customers in another country.

Most Fundamental Trend in Diversity and Multiculturalism

Trend of organizations become more diverse and multicultural.

Information Systems

Used to gather and organize relevant information for managers and to assist in summarizing that information in the form most pertinent to each manager's needs.

Integrated Business Software Systems

Web-based software that would allow food and beverage companies to run scenarios, or models, to evaluate the life-cycle performance of various packaging materials and designs.