Managing in the Global Environment - MGM3101 Chapter 4 PDF

Managing in Global the Environment CHAPTER 4  Learning Objectives Explain why the ability to perceive, interpret, and respond appropriately to the organizational environment is crucial for managerial success. Differentiate between the global task and global general environments. Identify...

Managing in Global the Environment CHAPTER 4  Learning Objectives Explain why the ability to perceive, interpret, and respond appropriately to the organizational environment is crucial for managerial success. Differentiate between the global task and global general environments. Identify the main forces in both the global task and general environments and describe the challenges that each force presents to managers. Explain why the global environment is becoming more open and competitive and identify the forces behind the process of globalization that increase the opportunities, complexities, challenges, and threats that managers face. Discuss why national cultures differ and why it is important that Overview Global Organizations: Global Environment: Operate in more than one Set of global forces and country. conditions that operate beyond Uncertainty and unpredictability. an organization’s boundaries but affect a manager’s ability to acquire and utilize resources. Forces in the Global Environment Access the text alternative for slide images. What Is the Global Environment? Task Environment: General Environment: A collection of forces and circumstances The wide–ranging global, stemming from suppliers, distributors, economic, technological, socio– customers, and competitors that impact cultural, demographic, political, an organization’s capacity to acquire and legal forces that affect an inputs and sell its outputs. These elements have a daily influence on managers' organization and its task decisions. environment. The Task Environment Suppliers: Global Individuals and organizations that provide outsourcing: The purchase or production of inputs or final an organization with the input resources products from overseas suppliers to lower that it needs to produce goods and services. costs and improve product quality or design. Raw materials, Component parts, Employees. Globally, managers can purchase products from foreign suppliers or manufacture their own products abroad. Distributors: A supplier’s bargaining position may be Organizations that assist other businesses in either strong or weak depending on selling their products or services to changes in the marketplace. consumers hold a significant role. However, Nature of suppliers. if distributors grow too large and influential, Number of supplies. they may gain the ability to control Types of suppliers. customer access to these goods and Managers must respond to the opportunities services. This can pose a threat to the and threats in the global marketplace. organization, as they might demand modifications to the products or services The Task Environment Competitors: Competitors: Organizations that produce goods and Organizations that produce goods and services that are similar to the goods services that are similar to the goods and and services produced by another services produced by another organization. organization. A high level of rivalry typically results in A high level of rivalry typically results in price competition, and falling prices price competition, and falling prices reduce revenues and profits. reduce revenues and profits. Potential Competitors: Organizations that presently are not in a task Customers: environment but could enter if they so Individuals and groups that buy the goods choose. and services that an organization produces. Identifying an organization’s main customers and producing the goods and services they want is crucial to organizational and managerial success. The Task Environment Barriers to Brand Loyalty: Entry: Factors that make it difficult and costly Customers’ preference for the products of for the organization to enter a organizations currently existing in the task environment. particular task environment or industry. Economies of Government Scale: Cost advantages associated with large Regulations: In some cases, act as a barrier to entry operations. at both the industry and the country level. Barriers to Entry and Competition Access the text alternative for slide images. The General Environment Economic Forces: Technological Technology: Interest rates, inflation, Forces: Outcomes of changes in the The combination of tools, unemployment, economic technology that managers machines, computers, skills, growth, and other factors that use to design, produce, or information, and knowledge affect the general health and distribute goods and services. used to design, produce and well–being of a nation or the distribute goods and services. regional economy of an organization. The General Environment Sociocultural Social Structure: National Culture: PressuresForces: emanating from the The traditional system of Set of values that a society social structure of a country relationships established considers important and the or society or from the national between people and groups in norms of behavior that are culture. a society. approved or sanctioned in that society. The General Environment Political and Legal Demographic Forces: Forces: Outcomes of changes in or changing Outcomes of changes in laws and attitudes toward the characteristics regulations, such as the of a population, such as age, gender, deregulation of industries, the ethnic origin, race, sexual privatization of organizations, and orientation, or social class. an increased emphasis on Most industrialized nations are environmental protection. experiencing the aging of their populations. The Changing Global Environment The Process of Globalization. The set of specific and general forces that work together to integrate and connect economic, political, and social systems across countries, cultures, or geographical regions so that nations become increasingly interdependent and similar. The four principal forms of capital flowing between countries: human, financial, resource, The Role of National Culture Cultural Values and Norms Values Mores: Ideas about what a society believes to be good, Norms that are considered to be central to desirable and beautiful. functioning of society and to social life. Provides the underpinnings for notions of E.g: in U.S drinking alcohol is widely accepted; individual freedom, democracy, truth, justice, but in Muslim countries it will consider as a honesty, loyalty, social obligation, collective serius violation responsibility. Norms: Very slow to change. Folkways: Unwritten informal codes of conduct that Routine social conventions of everyday life. prescribe how people should act in particular People are expected to behave for particular situations and are considered important by situations most members of a group or organization. Who violate folkways are thought as ill- mannered The Role of National Culture Hofstede’s Model of National Culture Individualism: Collectivism: A worldview that values individual freedom A worldview that values subordination of the and self–expression and adherence to the individual to the goals of the group and principle that people should be judged by their adherence to the principle that people should individual achievements rather than by their be judged by their contribution to the group. social background.(e.g Western countries) (e.g Japan) Power Distance: The degree to which societies accept the idea that inequalities in the power and well–being of their citizens are due to differences in individuals’ physical and intellectual capabilities and heritage. The Role of National Culture Hofstede’s Model of National Culture Achievement Orientation: Nurturing Orientation: (masculine traits) (feminine traits) Worldview that values assertiveness, Worldview that values quality of life, warm performance, success, and competition. – U.S personal friendships, and care for the weak. (Netherlands, Sweden) Uncertainty Avoidance: Degree to which societies are willing to tolerate uncertainty and risk. Societies low uncertainty avoidance (U.S, Hong Kong) are easy going, value diversity and tolerate differences Societies high on uncertainty avoidance (Japan and France) are more rigid and skeptical to those people beliefs or behaviors differs from others The Role of National Culture Hofstede’s Model of National Culture Long–Term Orientation: Short–Term Orientation: Worldview that values thrift and persistence Worldview that values personal stability or in achieving goals. happiness and living for the present. Taiwan and Hong Kong – well known for their U.S and France – spend more and save less high rate of per capita savings The Role of National Culture The Globe Project Nine cultural dimensions: Performance orientation. Russia scored high on Assertiveness. Future orientation. power distance Singapore scored low on Human orientation. Institutional collectivism. humane orientation China scored high on In–Group collectivism. Gender egalitarianism. gender differentiation. Power distance. Uncertainty avoidance. The Role of National Culture The Globe Project - Malaysia The Role of National Culture The Globe Project - China The Role of National Culture National Culture and Global Management Management practices that are effective in one country might be troublesome in another. Managers must be sensitive to the value systems and norms of an individual’s country and behave accordingly.  han t yo u Accessibility Content: Text Alternatives for Images Forces in the Global Environment, Text Alternative Return to parent-slide containing images. The graphic is set in a circle that shows the organization at the center, surrounded by the task environment (competitors, distributors, customers, and suppliers). The general environment is the outer circle, consisting of technological forces, sociocultural forces, demographic forces, political and legal forces, and economic forces. Barriers to Entry and Competition, Text Alternative Return to parent-slide containing images. Economies of scale, brand loyalty, and government regulation lead to the creation of barriers to entry, which lead to deterring potential competitors. 45