Chapter 3: Environment and diversity

Question 1

What are the two types of capabilities?

Answer 1

Strategic capabilities are those that are difficult to imitate and are of value to the customer e.g. unique product or service.
Dynamic capabilities enable an organisation to quickly adjust in the face of environmental shocks.

Question 2

What is competitive advantage?

Answer 2

A competitive advantage allows an organisation to deal with market and environmental forces better than its competitors. Different types of competitive advantage include cost and differentiation advantages.

Question 3

What is the general environment?

Answer 3

Consists of all the background conditions in the external environment, comprises of the following conditions -

• Economic
• Sociocultural
• Political-legal
• Technological
• Natural environment

Question 4

What is the specific environment?

Answer 4

Consists of the organisations, groups and people with whom an organisation directly communicates with and interacts to conduct business. Defined in terms of stakeholders - those of whom are affected by an organisation’s performance.

Question 5

What is managing diversity?

Answer 5

Building an inclusive work environment that allows everyone to reach their full potential.

Question 6

What are the leadership approaches to diversity?

Answer 6

1. Affirmative action commits the organisation to hiring and advancing minority groups and women.
2. Valuing diversity commits the organisation to education and training programs to help people understand and respect these differences.
3. Managing diversity commits the organisation to change the culture so everyone can reach their full potential.