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MMM132 > Chapter 2: The Managerial Environment > Flashcards

Chapter 2: The Managerial Environment Flashcards

1
Q

What is one of the biggest mistakes managers make today?

A

Failing to adapt to the changing world.

Organisations that are bound by tradition are less and less likely to survive the turbulence in today’s world.

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2
Q

What is the external organisational environment?

A

This refers to the forces and conditions outside the organisations boundaries that can potentially affect it. The external environment is made up of 2 components.

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3
Q

What are the two components making up the external environment?

A

The general environment and the specific environment.

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4
Q

What is the general environment?

A

The sociocultural, technological, economic, political/legal and global conditions in the society in which the organisation operates.

Changes in any dimension of the general environment will eventually affect all organisations, typically by influencing their specific environments.

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5
Q

Why can’t a single organisation directly affect the general environment?

A

Because the dimensions of the general environment reflect major social trends (making a single organisations ability to affect it quite limited).

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6
Q

What are the dimensions of the general environment of an organisation?

A 
. Sociocultural 
. Technological
. Economic
. Political/legal
. Global

STEPG

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7
Q

Explain the sociocultural dimension of the general environment.

A

This includes the cultural characteristics and the demographic conditions of the society in which the organisations operates.

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8
Q

What do cultural characteristics include?

A 
The:
. Customs 
. Values
. Tastes
. Attitudes
. and behaviours in a particular society in which the organisation operates.
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9
Q

What are demographic characteristics?

A 
The physical characteristics of the population, such as:  
. Gender
. Average age
. Level of education 
. Geographic dispersal
. Income 
. Household composition
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10
Q

What do sociocultural conditions also include?

A

They also include the racial and ethnic characteristics of the population.

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11
Q

Explain race and ethnicity.

A

Race is the biological heritage (including physical characteristics, such as ones skin colour and associated traits) that people use to identify themselves. (Social grouping of people based on physical and biological heritage).

Ethnicity is related to race, but it relates to social traits - such as ones cultural background or allegiance - that are shared by a human population. (Social groupings of people based on cultural characteristics and traditions).

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12
Q

What do sociocultural elements determine?

A

They determines the products, services and types of organisational behaviour that are valued in a society.

They also affect workplace diversity.

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13
Q

What is workplace diversity?

A

Ways in which people in a workforce are similar to and different from one another in terms of gender, age, race, sexual orientation, ethnicity, cultural background as well as physical abilities and disabilities.

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14
Q

Explain the technological dimension of the general environment.

A

This comprises the knowledge, tools and methods used to convert resources into products and services.

This dimension includes technological and scientific advancements in society at large as well as specific industries.

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15
Q

What does technological advancements generally mean?

A

It generally relates to changes in product or process technologies.

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16
Q

What do product and process technological changes lead to?

A

Product technological changes lead to the development of entirely new goods and services or refinements in the features and capabilities of existing products.

Process technological changes alter how organisations operate.

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17
Q

Explain the economic dimension of the general environment.

A

This relates to the general economic health of the country in which the organisation operates.

This dimension includes the type of economic system under which a country operates (capitalist vs socialist), it’s current economic conditions and its economic cycles.

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18
Q

What is a capitalist economy? What is a socialist economy?

A

Capitalist economy - An economic system in which individuals or corporations own the means of production and market forces operate.

Socialist economy - An economic system in which a central government owns the means of production and plans all economic activity. (Eg. People’s Republic of China)

Most national economies combine some elements of each form (eg. Australia and New Zealand)

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19
Q

What do current economic conditions include?

A

Current economic conditions include elements such as:
. The current interest rate
. Levels of inflation and
. Levels of unemployment

These elements affect organisations by influencing costs, prices and demand for products and services.

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20
Q

Explain the political/legal dimension of the general environment.

A

The legal and government systems within which an organisation operates. This includes:
. the general conditions and stability of the political system,
. government regulation of organisational behaviour and
. the impact of government spending on the economic environment.

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21
Q

How does regulation affect organisations?

A

It affects planning and decision making by determine the choices available to managers and forcing organisations to behave in ways that reflect societal values and preferences. (Eg. OH&S, environmental protection, competition consumer protection)

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22
Q

How does government spending affect organisations?

A

It influences the opportunities and threats faced by organisations. (Eg. ⬆️ spending on pensions = retailers benefitting from pensioners having higher discretionary income).

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23
Q

Explain the global dimension of the general environment.

A

It is comprised of factors that operate across national boundaries.

The global dimension includes events or changes that originate in foreign countries (such as the GFC) as well as physical and institutional forces of an international scale, such as global warming or the Internet.

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24
Q

How might international forces affect an organisation?

A

International forces may affect organisations directly or exert an indirect influence by affecting sociocultural, technological and economic trends.

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25
Q

Why are global force increasingly influential?

A

Because advances in transportation and communication technology have essentially eliminated geographic borders as boundaries to organisational activity. This means any organisation can become a global player.

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26
Q

When are organisations considered global?

A

. When they exchange goods and services with consumers in other countries
. If they use managerial and technical employee talent from other countries or
. If they use financial sources and resources outside their home country (which is known as financial globalisation)

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27
Q

What does global operation mean?

A

That organisations have to adapt to local conditions in each country and to world pride influences.

Consequently, managers need to understand:
. How global forces influence every for graphic region in which they operate
. How forces differ in each geographic location and
. The implication of those differences

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28
Q

What is the Global Leadership and Organisational Behaviour Effectiveness (GLOBE) research program?

A

A program that studies cross-cultural leadership behaviours.

This extended Geert Hodstede’s work - he developed on of the most widely referenced approach for analysing cultural variations.

GLOBE has identified 9 dimensions on which national culture differs.

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29
Q

What are 9 dimensions of national culture developed by Hofstede and GLOBE.

A 
. Power distance
. Uncertainty avoidance
. Individualism/collectivism
. Quantity of life vs quality of life 
. Long-term vs short-term orientation
. Assertiveness
. Future orientation
. Gender differentiation
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30
Q

Find out if you need to know about the 9 dimensions in detail

A
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31
Q

What is the specific environment?

A

The organisations, groups and individuals with whom an organisation interacts with as it conducts its business.

Factors in the specific environment have a direct and immediate effect on the organisation’s operations and performance.

32
Q

What does the specific environment include (for most orgsnisations)?

A 
. Customers
. Suppliers
. Competitors
. Industry regulators and government agencies
. Employees, labour markets and unions
. Interest groups
. Strategic partners
33
Q

What is the specific environment often described in terms of?

A

The specific environment is often described in terms of stakeholders - anyone who affects or is affected by the achievements of the organisation’s objectives.

34
Q

What are customers?

A

People and other organisations that acquire goods or services from the organisation, usually in exchange for money.

35
Q

How do customers affect the achievement of an organisation’s goals?

A

Customers needs and wants influence the type of products that an organisation makes, the quality of those products and the prices for which they are sold.

36
Q

What are suppliers?

A

Companies and individuals who provide the inputs that organisations use to conduct their operations.

Inputs might includes material or physical resources, human resources, financial resources, informational resources and business services.

37
Q

How do suppliers affect the achievement of an organisation’s goals?

A

Suppliers determine the quality, availability and cost of inputs. This makes them a major influence on an organisation’s product and service quality, production capacity, competitiveness and profitability.

38
Q

What are competitors? COME BACK

A

Individuals and organisations with whom an organisation competes for resources.

This includes government agencies ……. Etc

39
Q

How do competitors affect the achievement of an organisation’s goals?

A

Competitors influence the products and prices that organisations can offer, but they also influence:
. the costs and availability of supplies
. access to distribution channels and
. profitability

40
Q

What are employees?

A

Individuals who labour on behalf of the organisation in exchange for payment.

41
Q

How do employees affect the achievement of an organisation’s goals?

A

Since they provide the knowledge, skills, manual effort and creativity that support organisational operations, they are obviously critical to organisational performance.

42
Q

What are labour markets?

A

The pool of people employable by the organisation.

43
Q

How do labour markets affect the achievement of an organisation’s goals?

A

The balance between supply and demand for labour affects organisational performance by influencing costs and organisational capacity.

Eg. If demand for a particular type of employee is much higher than supply = market rage for those workers goes up = increased labour costs for the organisation that employs them.

44
Q

What are unions?

A

Employee associations that negotiate pay and conditions. They also take industrial action on behalf of their members.

45
Q

How do unions affect the achievement of an organisation’s goals?

A

Besides pushing for increased pay - which increases costs for the organisation - any industrial action can be a real set back too. It can include arranging work stoppages, calling strikes or even taking employers to court.

46
Q

What are strategic partners?

A

Organisations that work together for mutual benefit.

These relationships just be managed carefully to ensure they can work closely enough to be effective, but also protect themselves from risk.

47
Q

How do strategic partners affect the achievement of an organisation’s goals?

A 
By working closely with strategic partners (such as competitors, suppliers or customers) organisations can:
. Combine resources 
. Share ideas
. Learn from each other and 
. Spread risks

However, it can also result in:
. Learning each other’s trade secrets and
. Even becoming competitive rivals

48
Q

What are regulators?

A

People and organisations that create and enforce rules and regulations to protect consumers,memories and society as a whole.

49
Q

How do regulators affect the achievement of an organisation’s goals?

A

By enforcing ‘rules of the game’ for operating in a particular society.

An organisation’s specific environment might require interactions with a number of different regulatory bodies, such OH&S safety agencies, police, workplace standards boards and consumer affairs. This can require a lot of time and energy.

50
Q

Managing for sustainability???.?

A

I??.?.?.?.

51
Q

What are interest groups?

A

Groups organised to serve the interest of their members by influencing business activities in specific areas, such as environmental impact and ethical conduct.

Interest groups are organised to serve the interests of their members and are generally organised around a geographic locality, a specific social issue or an industry/profession.

52
Q

How do interest groups affect the achievement of an organisation’s goals?

A

They usually attempt to influence organisational behaviour by negotiating directly with organisations or by lobbying governments and local residents to exert pressure.

53
Q

How does the external environment affect managers?

A

It affects managers in two main ways, being:

  1. Affecting what managers can do and how they can do things as they facilitate organisational operations and the achievement of organisational goals.
  2. By creating uncertainty.
54
Q

Explain how the external environment can affect what managers can do and how they can do things as they facilitate organisational operations and the achievement of organisational goals.

A

Organisations function as open systems, meaning they take inputs and use organisational processes to transform them into the outputs they provide to customers and clients they are influenced by and interact with their environment.

Environmental factors can therefore affect the inputs an organisation can access, the outputs it can generate and the processes it can use to do so.

55
Q

Explain how the external environment can affect managers by creating uncertainty.

A

Environmental uncertainty refers to how well managers can understand or predict the changes wnd trends in the environments affecting their organisations. It is determined by:
. Environmental dynamism
. Environmental complexity and
. Resource availability

Because uncertainty is a threat to an organisation’s effectiveness, managers try to minimise it.

56
Q

What is dynamism?

A

The rate and predictability of change in the elements of an organisation’s environment.

In dynamic environments, change occurs quickly. In stable environments, the rate of environmental change is slow.

57
Q

What is environmental complexity?

A

The number of external factors affecting the organisation and the extent of their influence.

In simply environments, organisations are affected by few factors. Whereas organisations in complex environments are influenced by many factors.

58
Q

What is resource availability?

A

The abundance of critical resources in an organisation’s external environment.

59
Q

Measuring environmental uncertainty.

A

When environments are simple, resources are plentiful and change is slow = low environmental uncertainty. (Zippo cigarette lighters - managers have the greatest influence on organisational outcomes).

When environments are complex, dynamic and resources are scarce = high environmental uncertainty. (Music industry - managers have the least influence on organisational outcomes).

60
Q

What is important when there is uncertainty?

A

Managers must determine:
. What is occurring?
. How it is relevant to the opportunities and threats faced by the organisation? and
. How the organisation should react?

61
Q

Environmental uncertainty matrix.

A

Put in picture using brainscape website.

62
Q

What is the omnipotent view of management?

A

That managers are directly responsible for their organisation’s success or failure.

63
Q

What is the symbolic view of management?

A

Much of an organisation’s success or failure is due to external forces outside the manger’s control.

64
Q

What is organisational culture?

A

The shared values, principles, traditions and ways of doing things that influence the way organisational members act.

Organisational culture can be thought of as an organisation’s personality.

65
Q

What does an organisation’s culture define?

A

It defines how it interacts with its environment as it deals with two key issues:
. Handling environmental opportunities and threats so it can survive and prosper
. And integrating and managing people, structure and activities to keep the organisation together.

66
Q

What does research suggest about organisational culture?

A

That there are 7 dimensions that describe an organisation’s culture.

These dimensions range from low (not very typical of the culture) to high (very typical of the culture).

67
Q

What does an organisation’s culture usually reflect?

A

The vision or mission of the organisation’s founders.

Employees learn an organisation’s culture in a number of ways (the most common are stories, rituals, material symbols and language).

68
Q

What are the 7 dimensions of organisational culture?

A

. ATTENTION TO DETAIL (degree to which employees are expected to exhibit precision, analysis and attention to detail)

. OUTCOME ORIENTATION (degree to which managers focus on results or outcomes rather than on how these outcomes are achieved)

. PEOPLE ORIENTATION (degree to which management decisions take into account the effects on people in the organisation)

. TEAM ORIENTATION (degree to which work is organised around teams rather than individuals)

. AGGRESSIVENESS (degree to which employees are aggressive and competitive rather than cooperative)

. STABILITY (degree to which organisational decisions and actions emphasis is the status quo)

. INNOVATION AND RISK TAKING (degree to which employees are encouraged to he innovative and takes risks)

69
Q

Organisational stories.

A

Typically contain a narrative of significant events or people including such things as:
. The organisation’s founders
. Rule breaking
. Reactions to past mistakes and so forth

Organisational stories:
. Anchor the present in the past
. Provide explanations and legitimacy for current practices
. Exemplify what is important to the organisation
. And provide compelling pictures of an organisation’s goals

70
Q

Corporate rituals.

A

Repetitive sequences of activities that express and reinforce the important values and goals of the organisation.

71
Q

Material symbols or artefacts.

A

Communicate and organisation’s personality.

The layout of an organisation’s facilities, how employees dress, the type of cars provided to top executive and the availability of corporate aircraft are examples of material symbols. Other include the size of offices, the elegance of furnishings and reserved parking spaces for certain employees.

All these give people a feel for an organisation (formal v casual, fun v serious etc.).

72
Q

What do material symbols convey to employees?

A

Who is important and the kinds of behaviour (eg. Risk-taking, conservative, authoritarian, participative, individualistic etc.) that are expected and appropriate.

73
Q

Language.

A

Many organisations and unit within organisations use language as a way to identify and unite members of a culture. By learning this language, members attest to their affects fe of the culture and their willingness to help preserve it.

Over time, organisations often develop unique terms to describe equipment, key personnel, suppliers, customers, processes or products related to their business.

New employees are frequently overwhelmed with acronyms and jargon - that eventually became a natural part of their language.

74
Q

How does organisational culture affect managers?

A

Organisational cultures establish the internal environment of the organisation by defining for managers and employees what’s important, what defines ‘good’ behaviour, what it takes to get ahead and so forth.

Therefore organisational culture also acts as a form of a control system to promote the behaviours that the organisation wants and to discourage the behaviours that it doesn’t want.

75
Q

What are strong cultures?

A

Organisational cultures in which the key values are deeply held and widely shared.

The strong the culture becomes, more the it affects and aligns the way managers and employees behave.

The more employees who accept the organisation’s key values and the greater their commitment to those values, the stronger the culture is.

76
Q

What can cultural values have a very strong influence on?

A

The behaviour in organisations even when they’re not explicit.

77
Q

The ‘right’ culture.

A

Since organisations vary so much, there is no such thing as the ‘right’ culture for an organisation to have.

However, (with so much complexity and change occurring inside and outside organisations) a culture that promotes flexibility and willingness to change will become even more critical or organisational success in years to come.

MMM132 (10 decks)

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