Chapter 3: The Changing Environment of ManagementMGT 210

Section17&18

Managerial Environment

Social Environment Political-Legal Environment Economic Environment Technological Environment

Social Environment

Constant struggle between the forces of stability x Change = Society.

Basic Characteristics of social environment: Keeps on changing. Very dynamic Constant struggle

Dimensions of social environment 4 important dimensions of social

environment: Demographics of the New Workforce New Social Contract Between Employer and

Employee. Nagging Inequalities in the Workplace. Managing Diversity

Demographics of the New Workplace New Changes:

Workforce is getting larger. Increasing work opportunity for females. Racial and ethnical diversity is increasing. Workforce is getting older.

Demographics of the New Workplace(Cont.) Myths About Older Workers

Are less productive. Incur higher benefits costs. Have higher absenteeism. Tend to have more accidents at work. Are less willing to learn. Are inflexible about the hours they are willing to

work.

New Social Contract Between Employer and employee New Social Contract

Old idea of lifetime employment with one employer has gone.

Assumption that employer-employee relationship will be a shorter-term one based on convenience and mutual benefit, rather than for life. Employees are expected to manage their own careers to

increase their long-term value. Employers are expected to provide the necessary

means for continual workforce development .

Nagging Inequalities in the Workplace Under the Glass Ceiling

The transparent but strong barrier keeping women and minorities from moving up the management ladder.

Women are demanding more equitable compensation and workplace opportunities.

Nagging Inequalities in the Workplace Continuing Pressure for

Equal Opportunity Women, minorities, and

the physically challenged are all expected to press harder for more employment opportunities.

Managing Diversity

Managing Diversity The process of creating an organizational culture

that provides all employees; including women and minorities, with assistance and opportunities to help them realize their full potential.

More than EEO The moral necessity and commitment in going

beyond EEO and affirmative action to create flexible organizations that encompass and value diversity. Example- understanding different employees from different perspective.

The Political-Legal Environment The Politicization of Management

Issues management Ongoing process of identifying, evaluating, and responding to

important social and political issues. Purposes: minimize “surprises” and make more systematic

and effective responses to issues.

The Political-Legal Environment The Politicization of Management

Issues management Ongoing process of identifying, evaluating, and responding to

important social and political issues. Purposes: minimize “surprises” and make more systematic

and effective responses to issues. General political responses

Reactive Approach Neutral Approach Proactive Approach

Management’s Political Response Continuum

The Political-Legal Environment Specific Political Strategies

Campaign financing Financing preferred political campaigns or individual

candidates. Lobbying

Most popular and successful strategy. Includes formal presentations between managers and

legislators. Coalition building

Building coalition with special interest groups. Indirect lobbying

Advocacy advertising: Promoting a point of view along with a product or service which is appreciated by the legislators.

The Economic Environment

Management and economy is closely related. Three aspects of economic environment of

management: Jobs Business Cycle Global Economy

The Economic Environment

Jobs Education is essential in getting a highly paid job. Top 20 highly paid occupations require at least a widely

recognized bachelor degree. Business Cycle

The up and down movement of an economy’s ability to generate wealth.

Business cycles are converging worldwide.

The Economic Environment

Cycle-sensitive decisions Timed decision about appropriate responses to

changes in the business cycle is necessary for:

reducing the chances that a firm’s assets and resources will be underutilized or wasted in economic downturns.

taking advantage of opportunities that will arise during periods of rapid expansion of the economy.

Business Cycles Affect Managerial Decisions

The Technological Environment Technology

All the tools and ideas available for extending the natural and mental reach of humankind.

Technology is facilitating the evolution of the information age.

Information has become a valuable strategic resource for gaining competitive advantage.

The Technological Environment The Innovation Process

The systematic and practical application of a new idea.

Steps in the Innovation Process Conceptualization: when a new idea occurs to

someone. Product technology: creation of a working

prototype. Production technology: development of a

profitable production process.

The Three-Step Innovation Process

Innovation Lag The time it takes for a new product to be translated

into satisfied demand. Shortening Innovation Lag

Goal setting: creating a sense of urgency and purpose.

Empowerment: pushing decision-making authority down to the level of the decision.

Concurrent engineering: using a team approach to product design involving specialists from all functional areas including research, production, and marketing.

The Technological Environment

Promoting Innovation Through Intrapreneurship

Intrapreneur An employee who takes personal responsibility for

pushing an innovative idea through a large organization. example: Rahimafrooz.

Fostering Intrapreneurship Focus on results of teamwork. Reward innovation and risk taking. Tolerate and learn mistakes. Remain flexible and change-oriented.

Thank You All!