Bài giảng Management - Unit 3 Business environment

1NGO QUY NHAM, MBA BUSINESS ENVIRONMENT Ngô Quý Nhâm, MBA Tel: (04)8356805 – 0904063835 Email: quynham@gmail.com NGO QUY NHAM, MBA Lecture outline External environment ) Types of external environment ) Analysing the environment ) Managing the environment Internal environment (culture) ) Nature of organisational. culture ) Manifestations of culture ) Promoting innovation ) Changing organisational. culture ) Leadership & cultural change 2NGO QUY NHAM, MBA External environment ) External environment refers to the outside forces or institutions that potentially affect an organisation’s performance ) External environment is made up of: ƒ The General environment The broad conditions and trends that may affect the organisation. ƒ The Specific environment The part of the environment that is directly relevant to the achievement of an organisation’s goals. NGO QUY NHAM, MBA Economic environment In te rn at io na l en vi ro nm en t Te ch no lo gi ca l en vi ro nm en t Legal-Political en viro n m en t Socio-cultural environment The external Environment De m og ra ph ic en vi ro nm en t The organisation Suppliers Competitors Customers Pressure groups 3NGO QUY NHAM, MBA The General environment ) Legal-political environment Legal & governmental systems within which an organisation must function. ) How does government affect businesses’ activities? NGO QUY NHAM, MBA The General environment ) Economic environment Systems of producing, distributing & consuming wealth. ) How do these factors affect companies’ operation? ƒ Economic growth and disposable income ƒ Interest ƒ Inflation ƒ Stock market fluctuations 4NGO QUY NHAM, MBA The General environment ) Technological environment refers to the current state of technological knowledge and know-how. ) How do these factors influence on an organisation’s strategies and operation? ƒ Breakthrough in technology (new methods of production, new materials) ƒ Faster and better communication ƒ The development of the Internet NGO QUY NHAM, MBA The General environment )Socio-cultural environment Attitudes, values, norms, beliefs, behaviours & associated demographic trends characteristic of a given geographic area. ) How do these factors influence on an organisation’s strategies and operation? ƒ Population growth/change in composition ƒ Diverse workforce/Women joining labour force ƒ People are more concerned with quality of life ƒ Changes in the values and attitudes ƒ Changes in the culture of the society 5NGO QUY NHAM, MBA The General environment ) International environment International economic integration and globalisation ) How do these factors influence on an organisation’s strategies and operation? ƒ Fewer tariffs ƒ Currencies liked via floating exchange rates ƒ More global capital flows NGO QUY NHAM, MBA The Specific environment Suppliers Competitors Government & regulators The employment market Public pressure groups The Organisation Customers /clients 6NGO QUY NHAM, MBA The Specific environment ) Customers and clients ƒ Individuals and organisations purchasing products/services. ƒ Final consumers vs. intermediate consumers ) What do customers want from the organisation? ) When are customers powerful? NGO QUY NHAM, MBA The Specific environment ) Competitors Other organisations either offering (or a high potential of offering) rival products/services. ) How do competitors compete? ) When does competition become more intense? 7NGO QUY NHAM, MBA The Specific environment ) Suppliers Organisations and individuals supplying resources an organisation needs to conduct its operations. ) What does the firm want from suppliers? ) How do suppliers affect the organisation? ) When do they become powerful? NGO QUY NHAM, MBA The Specific environment ) Public pressure groups ƒ They are special-interest groups that attempt to influence the actions of organisations ) Which are public pressure groups? ) How do they affect the organisation? 8NGO QUY NHAM, MBA Analysing the environment Environment characteristics: ) Environmental Uncertainty ƒ Managers do not have enough information about the environment to understand or predict the future. ƒ Uncertainty is determined by the degree of complexity and change ) Environmental Complexity Number of elements in an organisation’s environment and the degree of an organisation’s knowledge about its environmental components. ) Environmental Dynamism Rate and predictability of change in the elements of an organisation’s environment. NGO QUY NHAM, MBA Managing the environment Three approaches to managing the environment: ) Adapting to your environment Involves changing internal operations & activities to make the organisation and its environment more compatible. ) Influencing your environment Involves trying to alter environmental elements to make them more compatible with the organisation’s needs. ) Domain shifting Changing product/service mix to create favourable interface. 9NGO QUY NHAM, MBA Adapting to your environment ) Buffering Stockpiling either inputs into or outputs from a production or service process to cope with environmental fluctuations. ) Smoothing Taking actions aimed at reducing the impact of fluctuations, given the market. ) Forecasting Predicting changing conditions & future events that significantly affect an organisation’s business. ) Rationing Providing limited access to a product or service in high demand. NGO QUY NHAM, MBA Managing the Environment Degree of change Stable Dynamic D e g re e o f co m p le x it y S im p le C o m p le x Decentralised Bureaucratic (Standardised skills) Decentralised Organic (Mutual adjustment) Decentralised Bureaucratic (Standardised skills) Centralised Organic (Direct supervision) Four approaches for managing uncertainty: 10 NGO QUY NHAM, MBA Influencing your environment ) Advertising & public relations ) Boundary spanning ) Recruiting ) Negotiating contracts ) Co-opting ) Strategic alliances ) Trade associations ) Political activity NGO QUY NHAM, MBA Domain shifting ) Move out of a current product, service or geographic area into a more favourable domain ) Expand current domains through diversification or expansion of products/services offered 11 NGO QUY NHAM, MBA Lecture summary External environment: ) Types of external environment General environment; Specific environment ) Analysing the environment )Managing the environment Adaptation, Favourability influence & Domain shift