Podcast
Questions and Answers
The term environment refers to institutions or forces that are outside the organization and potentially affect the organization’s ______.
The term environment refers to institutions or forces that are outside the organization and potentially affect the organization’s ______.
performance
Environmental uncertainty is the degree of change and ______ of the environment.
Environmental uncertainty is the degree of change and ______ of the environment.
complexity
The general environment includes political, economic, socio-cultural, technological, environmental, and ______ factors.
The general environment includes political, economic, socio-cultural, technological, environmental, and ______ factors.
legal
The competitive environment is the industry-specific environment comprising the organization’s customers, ______, and competitors.
The competitive environment is the industry-specific environment comprising the organization’s customers, ______, and competitors.
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Economic forces include interest rates, inflation, unemployment, and economic ______.
Economic forces include interest rates, inflation, unemployment, and economic ______.
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Technological factors encompass the presence of infrastructures and technological advancements in ______.
Technological factors encompass the presence of infrastructures and technological advancements in ______.
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Socio-cultural factors include customs, values, traditions, lifestyles, beliefs, and patterns of ______.
Socio-cultural factors include customs, values, traditions, lifestyles, beliefs, and patterns of ______.
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An international PESTEL analysis includes political, economic, socio-cultural, technological, environmental, and ______ factors.
An international PESTEL analysis includes political, economic, socio-cultural, technological, environmental, and ______ factors.
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The competitive environment consists of forces that originate with suppliers, distributors, customers, and ______.
The competitive environment consists of forces that originate with suppliers, distributors, customers, and ______.
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Porter’s five forces model is a technique to analyze the ______ of an industry.
Porter’s five forces model is a technique to analyze the ______ of an industry.
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High levels of ______ among competitors can decrease the attractiveness of an industry.
High levels of ______ among competitors can decrease the attractiveness of an industry.
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When there is stagnant or ______ demand, the intensity of rivalry tends to increase.
When there is stagnant or ______ demand, the intensity of rivalry tends to increase.
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A strong organizational culture is characterized by a strong connection between behaviors and ______.
A strong organizational culture is characterized by a strong connection between behaviors and ______.
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Visible artefacts of organizational culture include things like symbols, manner of dress, and ______.
Visible artefacts of organizational culture include things like symbols, manner of dress, and ______.
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The ______ power of suppliers can limit industry profits when they have significant negotiating strength.
The ______ power of suppliers can limit industry profits when they have significant negotiating strength.
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The higher the relative power of buyers, the lower the ______ of the industry.
The higher the relative power of buyers, the lower the ______ of the industry.
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The degree of ______ refers to the extent employees are encouraged to innovate and take risks.
The degree of ______ refers to the extent employees are encouraged to innovate and take risks.
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Stakeholders of a company can be classified as either ______ or internal stakeholders.
Stakeholders of a company can be classified as either ______ or internal stakeholders.
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Stockholders expect to maximize the return on their ______.
Stockholders expect to maximize the return on their ______.
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Organizational culture is transmitted to employees through stories, material symbols, and ______.
Organizational culture is transmitted to employees through stories, material symbols, and ______.
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Top managers have a major impact on establishing the organization’s ______.
Top managers have a major impact on establishing the organization’s ______.
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Employees expect rewards for their performance and a supportive ______ culture.
Employees expect rewards for their performance and a supportive ______ culture.
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The threat of ______ refers to products in other industries that meet similar needs.
The threat of ______ refers to products in other industries that meet similar needs.
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Study Notes
Business Environment
- Environment encompasses external institutions affecting organizational performance.
- Environmental uncertainty varies based on change and complexity.
- Change: Frequency of components' shifts.
- Complexity: Number and understanding of environmental components.
General Environment
- Consists of broad, organization-wide factors.
- Political, economic, socio-cultural, technological, environmental, legal (PESTEL).
Major General Environment Forces
- Economic: Interest rates, inflation, unemployment, growth.
- Technological: Infrastructure, innovation, production/distribution changes.
- Political/Legal: Stability, regulations, laws.
- Socio-Cultural: Customs, values, traditions, lifestyles.
- Demographic: Population characteristics (age, gender, etc.).
- Environmental: Production impact, sustainable practices, climate change.
- International: Global involvement and influence.
International PESTEL Analysis
- Political: Investment attitudes, stability, IP policy.
- Economic: Growth, wealth, currency stability, exchange rates.
- Socio-cultural: National cultures, foreign attitudes.
- Technological: Telecoms, power, import/export infrastructure.
- Environmental: Natural resources, environmental quality.
- Legal: Tariffs, trade agreements, employment, taxes.
Competitive Environment
- Forces affecting input/output, originating from suppliers, distributors, customers, and competitors.
Porter's Five Forces Model
- Analyzing industry attractiveness:
-
Rivalry: High rivalry = low attractiveness, profits:
- Number of competitors, demand growth, product differentiation, exit barriers.
-
Threat of New Entrants: Low barriers = lower profits:
- Barriers (capital, economies of scale, licensing, loyalty).
-
Bargaining Power of Suppliers: High supplier power = lower profits:
- Number of suppliers, customer type, supplier expansion, switching costs.
- Bargaining Power of Buyers: High buyer power = lower profits.
- Threat of Substitutes: Products/industries meeting similar needs.
-
Rivalry: High rivalry = low attractiveness, profits:
Organizational Culture
- Shared values, principles, traditions shaping behavior.
- Strong Culture: Shared values, employee identification, stories.
- Weak Culture: Values limited to top management, contradictory messages.
Levels of Organizational Culture
- Visible Artefacts: Observable aspects (dress, behavior, symbols, ceremonies, office layout).
-
Invisible:
- Values and beliefs (interpreting stories, language, symbols).
- Underlying assumptions (role models, legends, language).
Dimensions of Organizational Culture
- Adaptability, attention to detail, outcome orientation, people orientation, team orientation, integrity.
Establishing Organizational Culture
- Founder vision.
- Transmission through stories, symbols, language.
- Maintenance through selection, socialization, top management actions.
Stakeholders
- Individuals/groups with interest in the company.
- External Stakeholders: Customers, suppliers, creditors, governments, unions, community, general public.
- Internal Stakeholders: Stockholders, employees, managers, executives, board members.
Stakeholder Claims
- Stockholders: Maximize return on investment.
- Managers: Pursue optimal stakeholder benefits, resource efficiency.
- Employees: Fair compensation, rewards for performance.
- Suppliers: Fair payment, timely payment.
- Distributors: Quality products, agreed prices.
- Customers: Attraction and retention are crucial.
- Community: Infrastructure support for operation.
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Description
Test your knowledge on the various external factors that influence organizational performance. This quiz covers the PESTEL framework, including economic, technological, political, socio-cultural, demographic, environmental, and international forces. Evaluate your understanding of how these elements interact and impact businesses.
