Business Environment Changes

Environmental Change

• Environmental change is the rate at which a company's environment changes.
• Stable environments remain consistent.
• Dynamic environments are constantly changing.
• Punctuated equilibrium theory describes how companies cycle through stable and dynamic environments.

Environmental Complexity

• Environmental complexity refers to the number of external factors impacting an organization.
• Simple environments have a few influencing factors.
• Complex environments have many influencing factors.

Resource Scarcity

• Resource scarcity is the degree to which an organization's external environment has an abundance or scarcity of critical organizational resources.

Uncertainty

• Uncertainty is how well managers can understand or predict external changes impacting their businesses.

Components of the General Environment

• Economy
• Technology
• Sociocultural
• Political/Legal

Future Economic Activity

• Predicting future economic activity is difficult.
• Business confidence indices reflect manager confidence in future business growth.

Technological Component

• Technological advancements constantly shape businesses.

Sociocultural Component

• Changes in demographic trends.
• Shifts in behavior, beliefs, and attitudes.

Political/Legal Component

• Managers must know the laws, regulations, and potential court decisions impacting the business.
• Legislation, regulations, and court decisions directly affect the business environment.

Customer Component

• Monitoring customer wants and needs is essential for success.
• Companies can employ reactive or proactive approaches to customer monitoring.

Competitor Component

• Understanding competitors' strengths and weaknesses is crucial.

Competitive Analysis

• Determining who competitors are.
• Identifying competitors' strengths and weaknesses.
• Understanding competitors' actions and anticipating their moves.

Ethical Decision-Making

• A list of ethical commandments for decision-making.

Supplier Component

• Understanding buyer and supplier dependence.
• Recognizing opportunistic and relationship behaviors.

Industry Regulation

• Regulations specific to industries.
• Impact of government regulations on business practices, and procedures.

Environmental Scanning

• Environmental scanning proactively identifies events and issues impacting an organization.
• It keeps track of industry factors.
• It helps reduce uncertainty.
• It influences strategic plans.

Interpreting Environmental Factors

• Managers interpret events and issues to understand their implications for the organization.
• Opportunities and threats are identified.

Acting on Environmental Factors

• Managers respond to opportunities and threats.
• Deciding on a response to environmental factors.

Internal Environments and Organizational Culture

• Cognitive maps are simplified models of external environments.
• Internal environments affect management, employees, and organizational culture.
• Organizational culture is shared values and beliefs within the organization.
• Factors impacting organizational culture include organizational stories, heroes, founders, company culture values.
• Factors for successful organizational culture include adaptability, consistency, involvement, clear vision, sales growth, return on assets, profits, quality, and employee satisfaction.
• Blast from the past helps understand events that shaped the company.

Levels of Organizational Culture

• Different levels of organizational culture (artifacts, expressed values, and underlying assumptions).
• Example of cultural values presented in Starbucks Coffee.

Organizational Life Cycle

• A predictable sequence of stages of growth and change for an organization.
• Stages include: birth, growth, decline, and death.

Greiner's Model of Organizational Growth

• A model demonstrating stages of organizational growth and crises.

Weitzel and Jonsson's Model of Organizational Decline

• A model demonstrating stages of organizational decline.

Information Requirements for Decision-makers

• Different decision types (structured, unstructured, semistructured)
• Variety of information characteristics depending on the type of decision.

Dimensions of Information

• Classifying information based on timeliness, accuracy, currency, completeness, conciseness, scope, performance, detail, order, presentation, media, etc.

Seven Steps in the Decision-Making Process

• Steps involved in making effective decisions

Group Development Stages

• Stages of group development (forming, storming, norming, performing, adjourning)
• Stages of group development are discussed with focus on resolving uncertainty, conflict, and establishing expectations.

Effective Teams

• Characteristics of effective teams (clear goals, relevant skills, mutual trust, unified commitment, good communication, negotiation skills, appropriate leadership and support).
• Conflict-resolution techniques are noted and how they relate to team functionality.

Managing Teams

• Planning, organizing, leading, and controlling elements of effective team management.