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.
Economic forces include interest rates, inflation, unemployment, and economic ______.
Economic forces include interest rates, inflation, unemployment, and economic ______.
Technological factors encompass the presence of infrastructures and technological advancements in ______.
Technological factors encompass the presence of infrastructures and technological advancements in ______.
Socio-cultural factors include customs, values, traditions, lifestyles, beliefs, and patterns of ______.
Socio-cultural factors include customs, values, traditions, lifestyles, beliefs, and patterns of ______.
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.
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 ______.
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.
High levels of ______ among competitors can decrease the attractiveness of an industry.
High levels of ______ among competitors can decrease the attractiveness of an industry.
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.
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 ______.
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 ______.
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.
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.
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.
Stakeholders of a company can be classified as either ______ or internal stakeholders.
Stakeholders of a company can be classified as either ______ or internal stakeholders.
Stockholders expect to maximize the return on their ______.
Stockholders expect to maximize the return on their ______.
Organizational culture is transmitted to employees through stories, material symbols, and ______.
Organizational culture is transmitted to employees through stories, material symbols, and ______.
Top managers have a major impact on establishing the organization’s ______.
Top managers have a major impact on establishing the organization’s ______.
Employees expect rewards for their performance and a supportive ______ culture.
Employees expect rewards for their performance and a supportive ______ culture.
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.
Flashcards
Business Environment
Business Environment
External factors that can impact an organization's performance.
Environmental Uncertainty
Environmental Uncertainty
The degree of change and complexity of the environment an organization operates in.
General Environment
General Environment
Factors that impact all organizations, including political, economic, socio-cultural, technological, environmental, and legal aspects.
Competitive Environment
Competitive Environment
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Economic Forces in the General Environment
Economic Forces in the General Environment
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Technological Forces in the General Environment
Technological Forces in the General Environment
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PESTEL Analysis
PESTEL Analysis
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Political and Legal Forces in the General Environment
Political and Legal Forces in the General Environment
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Porter's Five Forces Model
Porter's Five Forces Model
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Rivalry Among Competitors
Rivalry Among Competitors
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Threat of New Entrants
Threat of New Entrants
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Bargaining Power of Suppliers
Bargaining Power of Suppliers
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Bargaining Power of Buyers
Bargaining Power of Buyers
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Threat of Substitutes
Threat of Substitutes
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Organizational Culture
Organizational Culture
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Strong Culture
Strong Culture
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Weak Culture
Weak Culture
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Visible Artifacts
Visible Artifacts
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Invisible Aspects of Culture
Invisible Aspects of Culture
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Stakeholders
Stakeholders
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External Stakeholders
External Stakeholders
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Internal Stakeholders
Internal Stakeholders
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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.
