MANAGING IN THE GLOBAL ENVIRONMENT
OVERVIEW OF CHAPTER
This chapter examines the organizational environment.
It identifies and examines the various
environmental forces that managers must perceive, interpret, and respond to. These forces are
divided into two categories, the task/specific and the general. The chapter also discusses the
changing face of the global environment, the major factors that have contributed to its change,
and an examination of today’s open trade environment upon managers. The chapter then
closes with a discussion of national culture, its impact upon organizations, and a model to be
used to compare various national cultures.
Explain why the ability to perceive, interpret, and respond appropriately to the
organizational environment is crucial for managerial success.
Identify the main forces in a global organization’s task and general environments, and
describe the challenges that each environment presents to managers.
Explain why the global environment is becoming more open and competitive, and
why barriers to the global transfer of goods and services are falling.
Explain the role national culture, why it is important, and the five dimensions upon
which various national cultures can be compared.
A MANAGER’S CHALLENGE: NESTLE’S GLOBAL FOOD EMPIRE
Nestle, a global organization, is headquartered in Vevey, Switzerland. In 2004, it
manufactured and marketed over 8,000 different food products at its 500 factories located in
CEO Peter Brabeck-Latmathe has several strategies in place that are designed to
further boost the company’s global performance.
First, he has entered attractive new markets in both developed and emerging markets and has
acquired food companies in the U.S., Mexico, France, and England. Brabeck plans to further
penetrate the market of these companies in their home countries, but also modify their
products to suit the tastes of customers throughout the world.
Brabeck also plans to increase
Nestle’s operating efficiency by reducing the cost of managing its global operations. He has
already cut the workforce by 15 percent and closed 114 plants.
In addition, IT will be used to
automate and integrate manufacturing, marketing and distribution functions and to monitor its
purchasing activities around the globe to ensure that the company is getting the lowest priced
and highest quality inputs possible.
Lastly, he plans to speed Nestle’s product innovation by leveraging its expertise across its
food businesses and creating more attractive food products that will increase its market share.
If Brabeck’s strategic plans are successful, Nestle will be well on its way to becoming not
only the largest, but also the most profitable global food company.
Jones, Contemporary Management, Fourth Edition