Week 02 CH 02 Environment of Business

Week 02 CH 02 Environment of Business - Chapter2...

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Chapter 2 The Environment of Business   MGT 300 Organization and Management Leadership January 26, 2011
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2-2 How is this the best,  most important chapter in the textbook? One Word – MONEY This chapter will help explain why some industries /  firms are more profitable than others. This is important because through knowing this  material and by following trends in the general and  competitive environment you will be able to make  more informed decisions on: 1. Where you may desire to work (industry /firm); 2. Where you may desire to live; and 3. Where you may desire to invest your retirement money.
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2-3 The Environment of Business: Learning Objectives 1. Describe the reciprocal relationships between  organizations and their environments. 2. Distinguish between the macro- and  competitive environment. 3. Why should managers/organizations attend to  economic and social developments 4. What are the elements of the competitive  environment?
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2-4 The Environment of Business: Learning Objectives (cont.) 1. Summarize how organizations respond to  environmental uncertainty 2. What are elements of an organization’s culture  (its internal environment) 3. How does an organization’s culture effects its  response to its external environment?
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Closed  and Open Systems The organization is the sole focus  with a closed system perspective. The focus is on organizational  processes, efficiency, effectiveness… The Organization
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Closed and  Open  Systems With an open systems perspective we see  that organizations are affected by their  environment, and in turn, the organizations  also affect the environment The Organization Inputs: Raw materials Services Equipment Capital Labor Outputs: Products Services
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2-7 Open Systems External environment All relevant force outside a firm’s boundaries, such as  competitors, customers, government and the  economy Competitive environment The immediate environment surround a firm; includes  suppliers, customers, rivals and the like.
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2-8 Open Systems Macroenvironment The general environment includes governments,  economic conditions, and other fundamental factors  that generally affect all organizations
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2-9 The External Environment
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2-10 Laws and Regulations Regulators include agencies such as: Occupational Safety and Health Administration (OSHA) Interstate Commerce Commission (ICC) Federal Aviation Administration (FAA) Equal Employment Opportunity Commission (EEOC) National Labor Relations Board (NLRB)
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2-11 The Economy The  economic environment  dramatically affects  managers’ ability to function effectively and  influences their strategic choices.  Interest and inflation rates affect the  availability   and  cost  of capital, growth opportunities, prices,  costs, and consumer demand for products.
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Week 02 CH 02 Environment of Business - Chapter2...

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