Podcast
Questions and Answers
Which factor is NOT considered part of the general environment?
Which factor is NOT considered part of the general environment?
What primarily characterizes environmental uncertainty?
What primarily characterizes environmental uncertainty?
Which of the following components relates directly to socio-cultural factors?
Which of the following components relates directly to socio-cultural factors?
Which of the following is a major force within the technological environment?
Which of the following is a major force within the technological environment?
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In an international PESTEL analysis, which category deals with trade agreements?
In an international PESTEL analysis, which category deals with trade agreements?
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What aspect of the demographic environment does NOT affect organizations?
What aspect of the demographic environment does NOT affect organizations?
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Which of the following factors is NOT included in the competitive environment?
Which of the following factors is NOT included in the competitive environment?
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Which force would most directly impact environmental sustainability practices?
Which force would most directly impact environmental sustainability practices?
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Which of the following scenarios represents complexity in the business environment?
Which of the following scenarios represents complexity in the business environment?
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What are the main components that comprise a competitive environment?
What are the main components that comprise a competitive environment?
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Which factor increases the intensity of rivalry among competitors in an industry?
Which factor increases the intensity of rivalry among competitors in an industry?
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What is a key characteristic of a strong organizational culture?
What is a key characteristic of a strong organizational culture?
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How do external stakeholders primarily benefit from a company?
How do external stakeholders primarily benefit from a company?
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Which of the following dimensions of organizational culture emphasizes the degree of precision and analysis in work?
Which of the following dimensions of organizational culture emphasizes the degree of precision and analysis in work?
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What establishes the foundational culture of an organization?
What establishes the foundational culture of an organization?
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What is one of the consequences of high bargaining power of buyers?
What is one of the consequences of high bargaining power of buyers?
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In Porter’s model, which force is affected by the presence of substitute products?
In Porter’s model, which force is affected by the presence of substitute products?
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Which is NOT a characteristic of suppliers with high bargaining power?
Which is NOT a characteristic of suppliers with high bargaining power?
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Which of the following accurately describes the role of internal stakeholders?
Which of the following accurately describes the role of internal stakeholders?
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Study Notes
Business Environment
- Environment encompasses external forces impacting organizational performance.
- Environmental uncertainty varies based on change and complexity.
- Change: frequency of components' alterations.
- Complexity: number and known components.
General Environment
- General environment affects all organizations, encompassing:
- Political, economic, socio-cultural, technological, environmental, and legal factors.
- Major forces in the general environment:
- Economic: interest rates, inflation, unemployment, economic growth.
- Technological: infrastructure advancements, industrial innovations.
- Political and legal: political stability, government regulations, laws/regulations.
- Socio-cultural: customs, values, lifestyles, beliefs, behavioral patterns.
- Demographic: population characteristics (age, gender, ethnicity, etc.).
- Environmental: production pollution, sustainable energy, and climate change.
- International: an organization's involvement in global business.
International PESTEL Analysis
- Specific PESTEL analysis for international business:
- Political: foreign investment attitudes, political stability, IP policy.
- Economic: growth rates, wealth distribution, currency stability, exchange rates.
- Socio-cultural: national cultures, attitudes toward foreign companies.
- Technological: telecoms, power stability, import/export infrastructure.
- Environmental: natural resources, environmental effects.
- Legal: tariffs, trade agreements, employment laws, taxation.
Competitive Environment
- Competitive environment encompasses forces from
- suppliers,
- distributors,
- customers, and
- competitors.
- Forces affect obtaining inputs and disposing of outputs.
Porter's Five Forces Model
- Analyzes industry attractiveness.
-
Rivalry among competitors:
- Number of competitors,
- demand growth,
- product differentiation,
- exit barriers affect intensity.
- Threat of new entrants: High entry barriers (capital, economies of scale, licenses) reduce threats.
- Bargaining power of suppliers: Dependent on supplier numbers, customer purchasing patterns, supplier growth, switching costs.
- **Bargaining power of buyers:**High buyer power reduces industry profit potential.
- Threat of substitutes: Similar products/services in different industries.
Organizational Culture
- Organizational culture shapes behavior and distinguishes organizations.
- Strong culture: Shared values, employees identify, historical stories.
- Weak culture: Limited top management values, inconsistent messages.
Organizational Culture: Levels
- Visible artifacts: observably (dress, behavior, ceremonies).
-
Invisible:
- Values and beliefs, derived from stories, language.
- Underlying assumptions, guiding behaviors and decisions (role-modelling, legends, nicknames).
Organizational Culture: Dimensions
- Adaptability,
- Attention to detail,
- Outcome orientation,
- People orientation,
- Team orientation,
- Integrity.
Organizational Culture: Establishment
- Founded on founder's vision, reflected in employee selection & socialization practices and manager's actions.
Stakeholders
- Stakeholders are individuals or groups with interest in the company.
- Internal stakeholders (employees, managers, stockholders)
- External stakeholders (customers, creditors, governments)
Stakeholders' Claims
- Stockholders: maximize return on investment.
- Managers: balance stakeholder needs, resource usage.
- Employees: rewards from performance.
- Suppliers: fair, prompt payment.
- Distributors: quality products and agreed prices.
- Customers: company survival depends on attracting them.
- Community: physical and social infrastructure.
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Description
This quiz explores the various external forces that impact organizational performance, including political, economic, socio-cultural, technological, environmental, and legal factors. It dives into the complexities of the general environment and the forces shaping it, providing a comprehensive understanding of how these elements interact with businesses.