Ch6 Flashcards
What is Resource-Based View?
The primary determinant of an organisation’s strategies are its unique resources and capabilities.
What does the Macro-Environment consist of?
- Economic System
- Eco-system
- Demographics
- Global considerations
- Cultural forces
- Political-legal forces
- Technology
What is the Strategic Importance of the External Environment?
The external environment is the source of an organisation’s opportunities and threats.
What does a formal evaluation of the External Environment involve?
- Scanning
- Monitoring
- Forecasting
- Assessing
What is the political-legal environment?
The part of the macro-environment which is under either the direct or the indirect control of the government or the state.
Political-legal environment levels are:
- National level
- Sub-national level
- Supranational level
Governments tend to have control over:
- Legislation and regulation
- Economic policy
- State-owned enterprises
- Government international policy
How do governments influence business activity?
- Control inflation
- Promote economic growth
- Control unemployment
- Control employment (BEE)
- Stabilize exchange rates
- Control monopoly power
- Provision of health, education and defense
- Redistribution of income
- Consumer protection
- Regulation of working conditions
- Regulation of trade
A study of political-legal factors include an assessment of political risk, for example:
- Nationalism
- Unfair completion from the public sector
- Unexpected discriminatory taxation
- Unexpected tightening of exchange controls
- National hostilities and military intervention
What are four ways in which a business can try to influence political-legal decisions?
- Negotiation
- Lobbying
- Alliances
- Representation
Political strategies:
- Negotiation?
Process by which two or more individuals or groups, having both common and conflicting goals, present and discuss proposals in an attempt to reach an agreement.
Political strategies:
- Lobbying?
An attempt to influence government decisions by providing government officials with information on the anticipated effects of legislation or regulatory rulings.
What is Industry-Organisation Model?
The primary determinant of an organisation’s strategies is the external environment.
Political strategies:
- Alliances?
A unified effort involving two or more organisation’s, groups, or individuals to achieve common goals with respect to a particular issue which they could not achieve on their own.
Political strategies:
- Representation?
Membership of an outside organ.
Economic factors:
What does an analysis of economic factors focus on?
Changes in the macro-economy that affect business and consumers.
Fiscal policy?
Regulation of the national economy through the management of government revenues on the one hand (raised through tax) and government expense on the other hand (health, education, defense, etc.)
Monetary policy?
Regulation of the national economy by changing the supply of money and the ‘price’ of money (interest rates)
Effects of fiscal and monetary policy on the national economy are seen in the following indicators:
- Rate of economic growth
- Exchange rates
- Levels of unemployment
- Levels of productivity
- Levels of income
- Levels of inflation
- Balance of payments
- Wage levels
Socio-cultural & Demographic Factors -
Analysis of the Social Environment:
- Socio culture - impact of values, attitudes and beliefs on the way customers behave, what they buy, their needs, their attitude to work, savings, investment, ethics etc.
- Demography and social structure - impact of size and structure of the population on patterns of demand and attitudes to work.
Beert Hofstede -
Differences among countries in terms of the following five value dimensions:
- Uncertainty avoidance
- Individualism
- Power distance
- Confucian dynamism
- Masculinity
Hofstede’s cultural values:
- Uncertainty avoidance?
People feel threatened by ambiguous situations and try to avoid them.
Hofstede’s cultural values:
- Individualism (vs. collectivism) ?
The tendency to take care of oneself and ones immediate family.
Hofstede’s cultural values:
- Power distance?
The degree to which less powerful members of organisation’s expect and accept the unequal distribution of power within those organisation’s.
