Professional Documents
Culture Documents
Chapters:
The Environment of Business
The Nature and Meaning of Management
The Planning Function
The Organizing Function
The Controlling Function
The Staffing Function
Motivating Employees
Participation in Organizations
Marks Distribution
Metric
Assignments/Project
Quizzes
Class Participation & Attendance
Mid-Term Exam
Final Exam
Final Evaluation
Marks
10
10
5
25
50
100
The Environment of
Business
What is Management?
- Formal Definitions:
What is an Organization?
- Formal Definitions:
What is a System?
A system is one which has interrelated parts and functions as a whole.
There are several departments or units in a business organization which
are all interrelated and the organization functions as one system.
SYSTEMS MODEL OF
ORGANIZATION
Types of System
Open System
An open system is one that interacts with its environment and thus
exchanges information, material, or energy with the environment,
including random and undefined inputs. Open systems are adaptive
in nature as they tend to react with the environment in such a way
organizing', in the sense that they change their continued existence.
Such systems are self organizing, because they change their
organization in response to changing conditions.
Closed System
A closed system is one, which doesnt interact with its environment.
Such systems, in business world, are rare. Thus the systems that are
relatively isolated from the environment but not completely closed
are termed closed systems.
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PLACID-RANDOMIZED ENVIRONMENTS
This environment is relatively unchanging. Therefore, environmental
uncertainty is low. Environmental demands are distributed randomly, and
change slowly.
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PLACID-CLUSTERED ENVIRONMENT
Environment changes slowly, but threats are clustered, not random. The
forces in the environment are linked, and pose a higher threat than
randomized changes.
12
DISTURBED-REACTIVE ENVIRONMENTS
A more complex environment than either placid one. Many similar
organizations seeking similar ends. One or more may be large and have
ability to influence the environment. Two or three large companies can
dominate an industry.
Organizations in this type of environment used planned tactical initiatives,
calculate reactions by other, and develop counteractions. This requires
flexibility and a structure with some decentralization.
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TURBULENT-FIELD ENVIRONMENTS
The most dynamic of the environments and has the highest level of
uncertainty associated with it. Environmental elements are increasingly
organized and interrelated.
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Nature of Environment
15
Stable Environment
In-between Environment
Dynamic Environment
DEGREE OF
HOMOGENEITY
Complex
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Small number of
external elements.
Elements remain the
same or change
slowly
Small number of
external elements.
Elements are in
continuous change
Large number of
external elements.
Element remain the
same or change
slowly
Large number of
external elements.
Elements are in
continuous change.
Stable
DEGREE OF CHANGE
Dynamic
Simple
LEAST
UNCERTAINTY
MODERATE
UNCERTAINTY
MODERATE
UNCERTAINTY
MOST
UNCERTAINTY
DEGREE OF
HOMOGENEITY
Complex
17
Stable
DEGREE OF CHANGE
Dynamic
Simple
DEGREE OF
HOMOGENEITY
Complex
18
Personal computers,
fashion clothing,
music industry, toy
manufacturers
Universities,
hospitals,
Insurance companies
American Airlines,
oil companies,
electronic firms,
aerospace firms
Stable
DEGREE OF CHANGE
Dynamic
19
ORGANIC ORGANIZATION
Organic organizations are relatively flexible and adaptable. They rely on
lateral communication rather than vertical communication. Influence is
based upon expertise and knowledge rather than on authority of position.
Responsibilities are defined loosely rather than rigid job definitions.
Emphasis is on exchanging information rather than on giving direction.
20
MECHANISTIC ORGANIZATION
Mechanistic structures are characterized by high complexity, formalization
and centralization. They perform routine tasks, rely heavily on
programmed behaviors, and are relatively slow in responding to
the unexpected.
21
22
Task Definition
Rigid
Flexible
Communication
Vertical
Lateral
Formalization
High
Low
Control
Centralized
Diverse
Influence
Authority
Expertise
Environmental Forces
23
24
Environmental Management
Environmental management how to manage the environmental
elements by executing strategies that alter uncertainly environment to
a certain extent
25
Environmental Management
Basic Strategy
Specific Strategy
Example
Independent
Strategy
Competitive
aggression
Legal Action
Political Action
Product differentiation
Aggressive Pricing and
Advertising Suits brought
against competitors
Lobbying
Cooperative
Strategy
Co-optation
Coalition
Consumer representatives
Industry Association
Strategic
Domain Selection
Maneuvering Diversification
Merger and
Acquisition
26
Social Responsibility
Social Responsibility the awareness that business activities have an
impact on its environment so it should try to balance its commitment in
its environment
27
Social Responsibility
28
Social Responsibility
29
Business Challenges/Environmental
Variables
30
31
Macroeconomics
Microeconomics
The Forces of Supply and Demand
The Business Cycle
State Budget
International Trade
32
33
Changing Population
Cultural Values
Social Responsibility
Consumerism and Ecology
Business Ethics
34
Government Role
Business and Politics
Law enforcement
35
Technology Development
Applying Technology
Technology Transfer
36