© Pearson Education Limited 2015 2-1 Chapte r 2 The Managemen t Environme nt
Jan 19, 2016
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Chapter2The ManagementEnvironment
Learning Outcomes
• Explain what the external environment is and why it’s important.
• Discuss how the external environment affects managers.
• Define what organizational culture is and why it’s important.
• Describe how organizational culture affects managers.
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2.1Explain what the external environment is and why it’s important.
External Environment
Factors, forces, situations, and events outside the organization that affect its performance.
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Components of the External Environment
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How Has the Economy Changed?
• Turmoil in mortgage markets• Spread to businesses• “Great Recession”• Foreclosures, unemployment, public debt, and
social problems
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Demographics
Demography is destiny.
Age Cohorts• Baby Boomers• Gen X• Gen Y• Post-Millenials
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How Much Difference Does a Manager Make?Managers:
All powerful OR helpless?Management theory proposes two perspectives in
answering this question: the omnipotent view and the symbolic view.
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2.2Discuss how the external environment affects managers.
How Does External Environment Affect Managers?
• Jobs and employment• Assessing environmental uncertainty• Managing stakeholder relationships
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Assessing Environmental Uncertainty
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Managing Stakeholder Relationships
Stakeholders: any constituencies in an organization’s environment that are affected by that organization’s decisions and actions.
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Organizational Stakeholders
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2.3 Define what organizational culture is and explain why it’s important.
What is Organizational Culture?
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Organizational Culture--Shared values, principles, traditions, and ways of doing things that influence the way an organization’s members act.
Culture is:
1. Perceived2. Descriptive3. Shared
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Dimensions of Culture
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2.4Describe how organizational culture affects managers.
How Does Organizational Culture Affect Managers
• Effect on what employees do and how they behave
• Effect on what managers do
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How Does Culture Affect What Employees Do?
Strong cultures: cultures in which the key values are deeply held and widely shared.
Strong Cultures Can:• Substitute for formal rules and regulations• Create predictability, orderliness, and consistency
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How Does Culture Affect What Managers Do?
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Company Values Affect Managers’ Behavior
“Ready-aim-fire” versus “Ready-fire-aim”