The Managerial Environment. 4 Managerial Environments Internal External Cultural Ethics/Social...

The Managerial Environment

4 Managerial Environments

• Internal• External• Cultural• Ethics/Social Responsibility

Copyright © 2009 South-Western/Cengage Learning. All rights reserved.

2–3

The Internal Environment


2–4

The Internal Environment

• Management and Culture– Organizational culture

• The values, beliefs, and assumptions about appropriate behavior that members of an organization share.

• Mission– A organization’s purpose or reason for being.

• Top management’s responsibility is to develop a mission with clear measurable objectives.

• Should be relevant to all stakeholders’ interests.• Is an expression of the ends the organization strives to

attain.


2–5

The Internal Environment (cont’d)

• Resources– Human resources– Physical resources– Financial resources– Informational resources

• Systems Process– The method used to transform inputs into outputs.– Process components

1. Inputs2. Transformation3. Outputs4. Feedback


2–6

Exhibit 2–2 ● The Systems Process


2–7

The Internal Environment (cont’d)

• Structure– The way in which resources are grouped to

effectively achieve the organization’s mission.– Organizations structure resources to transform

inputs into outputs.– All of an organization’s resources must be

structured effectively to achieve its mission.


2–8

The External Environment

• Task Factors• General Factors• Chaos and Interactive Management


2–10

The External Environment• Task Factors

– Customers• Their needs decide what products businesses offer.

– Competition• Competitors’ business practices often have to be duplicated to

maintain customer value.

– Suppliers• Poor quality suppliers mean poor quality products.

– Labor force• Quality labor is needed to produce quality products.

– Shareholders• The board of directors monitors management and provides direction

for the organization.


2–11

The External Environment• General Factors

– Society• Businesses are pressured by societal forces to behave in an acceptable

manner.

– Technology• Firms must stay current on technology to stay competitive and

provide customer value.

– The Economy• Economic activity has both short and long-term effects on an

organization’s ability to provide customer value.

– Governments• Policies, rules, and regulations affect what, how much, and how

business is conducted.


2–12

The External Environment (cont’d)

• Chaos and Interactive Management– Reactive managers

• Make changes only when forced to by external factors.

– Responsive managers• Try to adapt to the environment by predicting and

preparing for change before they are required to do so.

– Interactive managers• Design a desirable future and invent ways of bringing it

about by trying to prevent, not prepare for, threats and to create, not exploit, opportunities.


2–13


2–14

Exhibit 2–5 ● The Organizational Environment


2–15

Business Ethics• Ethics

– The standards of right and wrong that influence behavior.

– Government laws and regulations are designed to govern business behavior.

• However, ethics go beyond legal requirements.

– Ethical concepts are culturally-bound.• What is considered ethical in one country may be

unethical in another.


2–16

Business Ethics (cont’d)• Does Ethical Behavior Pay?

– Research shows a positive relationship between ethical behavior and leadership effectiveness.

• Having strong ethics means having integrity, and people trust others they believe have integrity.

– Unethical behavior creates a negative image of big business.

• Mahatma Gandhi called business without morality a sin.


2–17

Factors Affecting Ethical Behavior

The SituationThe Situation

Personality Traits and Attitudes

Personality Traits and Attitudes

MoralDevelopment

MoralDevelopment

Ethical BehaviorEthical

Behavior


2–18

How People Justify Unethical Behavior• Moral Justification

– The process of reinterpreting immoral behavior in terms of a higher purpose.

• Displacement of responsibility-blaming someone else• Diffusion of responsibility-when no one person is held

responsible• Advantageous comparison-comparing oneself to others

who are worse• Disregard or distortion of consequences-minimizing the

harm• Attribution of blame-someone else was unethical so I

had to be unethical too.• Euphemistic labeling-using “cosmetic” words to make

the behavior sound acceptable.


2–19

Simple Guides to Ethical Behavior• Golden Rule

– “Do unto others as you want them to do unto you.”

• Four-Way Test1. Is it the truth?2. Is it fair to all concerned?3. Will it build goodwill and better friendship?4. Will it be beneficial to all concerned?

• Stakeholders’ Approach to Ethics– Creating a win-win situation for all relevant

stakeholders so that everyone benefits from the decision.


2–20

Social Responsibility

• Social Responsibility to Stakeholders– The conscious effort to try to create a win-win

situation for all external stakeholders, as well as internal stakeholders.

• Does It Pay to Be Socially Responsible?– Social responsibility doesn’t guarantee or improve

profits, but scandals do hurt corporate reputations.


2–21

KEY TERMS• internal environment• organizational culture• mission• stakeholders• systems process• quality• customer value• total quality

management (TQM)• levels of culture• symbolic leaders• learning organization• external environment

• global village• ethnocentrism• international business• multinational

corporation (MNC)• global sourcing• joint venture• direct investment• ethics• stakeholders’

approach to ethics• social responsibility

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The Managerial Environment. 4 Managerial Environments Internal External Cultural Ethics/Social...

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