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Chapter 3MANAGERIAL ENVIRONMENTS3.1 Introduction to Managerial Environments3.2 The Internal Environment3.3 The External Environment3.4 Adapting to Environments3.5 Learning Organizations3.1 Introduction to Managerial EnvironmentsA manager's environment is made up of constantly changing factors - both external and internal that affect theoperation of the organization. If a new competitor appears in the marketplace, the managerial environment isaffected. If key clients take their business elsewhere, managers feel the impact. And if technological advancesdate an organization's current methods of doing business, once again, the managerial environment has to adapt. Although managers can't always control their environments, they need to be aware of any changes that occur,because changes ultimately affect their daily decisions and actions. For example, in the airline industry,deregulation opened up the market to new airlines, forcing existing airlines to be more competitive. Managers inexisting airlines couldn't afford to ignore the cheaper airfares and increased service that resulted. Not only didmanagers have to identify the new challenge, but they also had to act quickly and efficiently to remaincompetitive. 3.2 The Internal EnvironmentAn organization's internal environmentis composed of the elements within the organization, including currentemployees, management, and especially corporate culture, which defines employee behavior. Although someelements affect the organization as a whole, others affect only the manager. A manager's philosophical orleadership style directly impacts employees. Traditional managers give explicit instructions to employees, whileprogressive managers empower employees to make many of their own decisions. Changes in philosophy and orleadership style are under the control of the manager. The following sections describe some of the elements thatmake up the internal environment. An organization's mission statementdescribes what the organization stands for and why it exists. It explainsthe overall purpose of the organization and includes the attributes that distinguish it from other organizations ofits type. A mission statement should be more than words on a piece of paper; it should reveal a company's philosophy, aswell as its purpose. This declaration should be a living, breathing document that provides information andinspiration for the members of the organization. A mission statement should answer the questions, “What areour values?” and “What do we stand for?” This statement provides focus for an organization by rallying itsmembers to work together to achieve its common goals.But not all mission statements are effective in America's businesses. Effective mission statements lead toeffective efforts. In today's qualityconscious and highly competitive environments, an effective missionstatement's purpose is centered on serving the needs of customers. A good mission statement is precise inidentifying the following intents of a company:

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