TWO MAIN ENVIRONMENTS AFFECTING MANAGERS. EXTERNAL ENVIRONMENT - outside the firm. TASK ENVIRONMENT - actual potential competitors suppliers and buyers. GENERAL ENVIRONMENT - inclu... TWO MAIN ENVIRONMENTS AFFECTING MANAGERS. EXTERNAL ENVIRONMENT - outside the firm. TASK ENVIRONMENT - actual potential competitors suppliers and buyers. GENERAL ENVIRONMENT - includes political and legal forces, macroeconomic. INTERNAL ENVIRONMENT - inside the firm. FIVE FORCES MODEL BY Michael Porter. 1. Threat of Entry - Barriers to entry - factors that make it costly for potential competitors. Economies Scale - cost reductions large output. Brand loyalty - preference of consumers. 2. BARGAINING POWER OF BUYERS - ability of buyers to bargain down prices. 3. BARGAINING POWER OF SUPPLIERS - represent an opportunity or threat to a firm depends on the extent. 4. THE THREATS OF SUBSTITUTES - goods or services that satisfy similar customer needs. 5. THE INTENSITY OF RIVALRY - Nature of product - Commodity Product - one that is difficult to differentiate from rivals. Demand and supply conditions - profit of the organization is affected by the demand and supply. The cost of Structure of Firms Fixed costs - these are those must be borne before a firm makes a single sale. Competitive Structure - number and size of distribution of incumbent firms. Fragmented industry - many small or medium sized companies. Consolidated Industry - dominated by large companies oligopoly or monopoly. THE GENERAL ENVIRONMENT - larger environment within which the task environment is embedded. POLITICAL AND LEGAL FORCES - result of changes in laws and regulations. MACROECONOMIC FORCES - affect the general health and well-being of a national or regional economy: Economic growth, Interest Rates, Currency Change, Price Inflation. DEMOGRAPHIC FORCES - outcomes changes characteristics, age gender ethnic origin race. SOCIO-CULTURAL FORCES - changing social morals and values. TECHNOLOGICAL FORCES - perennial gale of creative destruction. INTERNATIONAL FORCES. THE INTERNAL ENVIRONMENT - culture employees resources. INTERNAL ORGANIZATION - EMPLOYEES - can be a source of sustained advantage or weakness. RESOURCES - are the assets that managers have to work. An important line of work in academic literature known as RESOURCE-BASED VIEW. Tangible Resources - physical assets land building equipment money. Intangible Resources - nonphysical assets brand names reputation.
Understand the Problem
The question discusses the environments affecting managers, outlining both external and internal factors, and introduces Michael Porter's Five Forces Model which analyzes competition and market dynamics. It emphasizes the significance of understanding these environments for effective management.
Answer
Managers are influenced by external, task, and general environments, as well as the internal environment of a firm.
Managers are affected by the external environment, which includes the task environment with competitors, suppliers, and buyers, and the general environment with political, legal, macroeconomic, demographic, socio-cultural, technological, and international forces. The internal environment pertains to the firm's culture, employees, and resources.
Answer for screen readers
Managers are affected by the external environment, which includes the task environment with competitors, suppliers, and buyers, and the general environment with political, legal, macroeconomic, demographic, socio-cultural, technological, and international forces. The internal environment pertains to the firm's culture, employees, and resources.
More Information
The external environment encompasses both the general environment, which includes broad forces like politics and technology, and the task environment, focusing on specific competitors and market-related factors. Internal environment highlights aspects within the organization that can provide strategic advantages.
Tips
A common mistake is to confuse the elements of the task environment with those of the general environment. It's important to differentiate between specific market factors like competition and broader influences like political forces.
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