mba mco101 unit 3 lecture 4 20080622
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MCO 101 • MANAGEMENTUnit 3: Organisation, Globalisation and the resulting environments
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MANAGEMENT 2MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
reserved
Managing Expectations
LEARNING OUTCOMES:
At the end of the course, students will be able to:
• Explain fundamental concepts and principles of management including the basic roles, skills, and functions of management
• Discuss the knowledgeable of historical development, theoretical aspects and practice application of managerial process
• Examine the environment, technology, human resources, and organisations in order to achieve high performance
• Discuss the ethical dilemmas faced by managers and the social responsibilities of businesses.
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MANAGEMENT 3MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Managing Expectations
SUBJECTS DISCUSSED:
1. Management, Managers and evolution of Management theory
2. Personality traits and diversity3. Organisation, Globalisation and the resulting
environments4. Decision-making and Planning5. Structure and Strategy6. Executing and Controlling7. Human Resources Management as a function8. Motivation, Leadership, Groups and Teams9. Communication, conflicts and politics10. Operations Management. Entrepreneurship. Innovation
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MANAGEMENT 4MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Managing Expectations
TOPIC DETAILS:
After going through UNIT 3, you should be able to:
1. Discuss how changing environments affect organisations.2. Describe the four components of the general environment.3. Explain the five components of the specific environment4. Describe the process that companies use to make sense of their
changing environments.5. Explain how organisational cultures are created and how they
can help companies be successful
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MANAGEMENT 5MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Changing Environments
Environmental Change
Environmental Complexity
Resource Scarcity
Uncertainty
Characteristics ofChanging External Environments
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MANAGEMENT 6MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Environmental Change
Environmental Change is the rate at which a company’s environments change,
• stable environments
• dynamic environments
Punctuated equilibrium theory:
• Companies cycle through stable and dynamic environments.
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MANAGEMENT 7MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Punctuated Equilibrium: U.S. Airline Industry
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MANAGEMENT 8MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Environmental Complexity
Environmental Complexity: the number of external factors in the environment that affect organisations
• Simple Environment• Complex Environment
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MANAGEMENT 9MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Resource Scarcity
Resource Scarcity
The degree to which an organization’s external environment has an abundance or scarcity of critical organisational resources
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MANAGEMENT 10MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Natural Resources
There is general concern over the scarcity of natural resources. Companies like Weyerhauser work extra hard to correct the misperception that they are "using up" valuable resources. In fact, through careful planning and good management, Weyerhauser is able to both guarantee its lumber resources and be a good environmental steward.
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MANAGEMENT 11MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Uncertainty
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MANAGEMENT 12MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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External Environment
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MANAGEMENT 13MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Components of the General Environment
Economy Technological trends Sociocultural trends Political / Legal trends
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MANAGEMENT 14MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Economy
• Growing vs. shrinking economies
• Predicting future economic activity
• Business confidence indices
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MANAGEMENT 15MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Technological Component
Information
OutputInputTechnology--
KnowledgeTools
TechniquesRaw
Materials
Services
Products
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MANAGEMENT 16MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Impact of Technology
Technology can be a great benefit or a daunting threat. MP3 players have created a tremendous new business opportunity for some, like Apple, Creative, and other manufacturers. But record labels have suffered from the rapid acceptance of digital music and persistent file swapping.
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MANAGEMENT 17MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Socio-cultural Component
Socio-cultural Components
• Demographic changes
• Changes in behavior, attitudes, and beliefs
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MANAGEMENT 18MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Political / Legal Component
• Legislation
• Regulations
• Court decisions
Managers must be educated about the laws, regulations, and potential lawsuits that could affect business
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MANAGEMENT 19MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Specific Environment
Customer
Competitor
Supplier
Industry Regulation
Advocacy Group
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MANAGEMENT 20MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Customer Component
Monitoring customer wants and needs is critical for business success
Reactive customer monitoring: responding to problems, trends, and events
Proactive customer monitoring: anticipating problems, trends, and events
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MANAGEMENT 21MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Competitor Component
Competitive Analysis
Deciding who your competitors are
Anticipating competitors’ moves
Determining competitors’ strengths and weaknesses
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MANAGEMENT 22MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Supplier Component
Opportunistic Behavior
SuppliersBuyer Dependence
Supplier Dependence
Relationship Behavior
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MANAGEMENT 23MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Supplier Dependence
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MANAGEMENT 24MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Industry Regulation Component
Industry Regulation
Consists of regulations and rules that govern the business practices and procedures of specific industries, businesses, and professions.
Identify and discuss relevant regulatory agencies that affect business practices.
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MANAGEMENT 25MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Cost of Compliance
Researchers studied U.S. manufacturers and the cost they incur complying with the 25 major federal regulations.
Researchers found:
• There are about 300,000 manufacturing companies in the U.S.
• Each company spends roughly $2.2 million
So, the aggregate cost of complying with federal regulations is roughly
$660 billionAnd that’s just for manufacturing.
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MANAGEMENT 26MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Dealing with Gifts and Suppliers
Guidelines to Avoid Conflicts of Interest
There’s no such thing as a free lunch Meals and entertaining are valid business No gifts worth more than $25 in value No cash or cash equivalents No discount on goods and services No stock in suppliers’ companies Don’t allow personal friendship to influence decisions
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MANAGEMENT 27MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Advocacy Groups
Groups of concerned citizens who band together to try to influence the business practices of specific industries, businesses, and professions
Techniques to try to influence companies
public communications media advocacy product boycotts
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MANAGEMENT 28MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Advocacy GroupsExamples
The Body Shop has emphasised its support for a wide range of issues around the globe. Its slogans included: Against Animal Testing, Support Community Trade, Activate Self Esteem, Defend Human Rights, and Protect Our Planet.
PETA is a well-known advocacy group that attempts to influence consumers and companies to pursue animal-friendly practices.
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MANAGEMENT 29MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Making Sense of Changing Environments
Acting on Threats and Opportunities
Interpreting Environmental Factors
Environmental Scanning
EvaluatingEvaluatingExternalExternal
EnvironmentsEnvironments
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MANAGEMENT 30MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Environmental Scanning
Environmental scanning: searching the environment for events or issues that might affect an organisation
keeps companies current on industry factors
reduces uncertainty alters organizational strategies contributes to organizational
performance
Interpreting the scans into opportunities and threats
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MANAGEMENT 31MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Acting on Threats and Opportunities
Cognitive Maps
simplified models of external environments depicts how managers believe environmental
factors relate to possible organisational actions
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MANAGEMENT 32MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Acting on Threats and Opportunities
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MANAGEMENT 33MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Internal Environments
Consists of the trends and events within an organisation that affect the management, employees, and organisational culture
important because it affects what people think, feel, and do at work
organisational culture is the set of key values, beliefs, and attitudes shared by organisational members
Creation & Maintenance of Organisational Culture
Organisational HeroesOrganisational Stories
Company Founder
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MANAGEMENT 34MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Successful Organisational Cultures
EmployeeSatisfaction
Quality
Consistency
Adaptability
Involvement
Clear Vision
SalesGrowth
Return onAssets
Profits
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MANAGEMENT 35MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Levels of Organizational Culture
Symbolic artifacts Behaviors
Symbolic artifacts Behaviors
1. SurfaceLevel
1. SurfaceLevel SEENSEEN
What people say How decisions
are made
What people say How decisions
are made2. Expressed Values
and Beliefs2. Expressed Values
and Beliefs HEARDHEARD
Beliefs andassumptions
Rarely discussed
Beliefs andassumptions
Rarely discussed
3. Unconsciously Held Assumptionsand Beliefs
3. Unconsciously Held Assumptionsand Beliefs BELIEVEDBELIEVED
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MANAGEMENT 36MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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Changing Organisational Cultures
Behavioral addition: is the process of having managers and employees perform a new behavior
Behavioral substitution: is having managers and employees perform a new behavior in place of another behavior
Change visible artifacts: such as the office design and layout, company dress codes, etc.
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MANAGEMENT 37MCO 101Issue date: 15 June 2008 Source: by South-Western, a division of Thomson Learning. All rights
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What Would You Do?
Wendy’s International Headquarters
• Obesity is at epic proportions, with 66 percent of Americans overweight
• Fast food restaurants are faced with lawsuits, regulation, and complaints
• Healthier cooking techniques costs more with less tasty results
Should Wendy’s pay attention to activists or give customers what they
want?
Your opinion please…