ch04 managing: a competency based approach, hellriegel & jackson
TRANSCRIPT
Don Hellriegel
John W. Slocum, Jr.
Susan E. Jackson
MANAGING: A COMPETENCY BASED APPROACH
11th Edition
Chapter 4—Assessing the Environment
Prepared by
Argie ButlerTexas A&M University
Chapter 4: PowerPoint 4.1
Learning Goals
1. Explain how economic, demographic, and cultural factors affect organizations
2. State the five competitive forces in an industry
3. Describe the political and legal strategies managers use to cope with changes in the environment
4. Explain how technology changes the structure of industries
Chapter 4: PowerPoint 4.2
General Environment—sometimes called themacroenvironment, includes the external
factors that usually affect all or most organizations
Chapter 4: PowerPoint 4.3 (Adapted from Figure 4.1)
DemographicsTechnology
EconomyCountryCulturalValues
Competitors
Macroenvironment
Organization
Politics
Chapter 4: PowerPoint 4.4
Economics is the discipline that focuses on understanding how people or nations produce, distribute, and consume various goods and services
Chapter 4: PowerPoint 4.5 (Adapted from Table 4.1)
The New Age of Competition
Source: Adapted from Friedman, T.L. The World is Flat. New York: Farrar, Straus & Giroux, 2005, 48-172.
Old New
Low-cost manufacturing Value-added services
Self-reliance Outsourcing
Made in U.S.A. Borderless competition
The Economy (cont’d)
Local knowledge Customer convenience
Physical laborHuman capital, software,knowledge management
Smoke-stack industries Environmental stewardship
Chapter 4: PowerPoint 4.6
Snapshot
“Our assets leave on the elevator every night. Organizations do not own human capital; they can only rent them. In today’s world, human capital will have greater power than other resources because it is the people who create knowledge.”
Andy Grove, Founder and CEOIntel Corporation
Chapter 4: PowerPoint 4.7
Impact of Changing Demographics on Organizations
Increasing diversity Women participation rate increasing Hispanic men rate increasing People of color rate increasing
Managerial challenges Multicultural awareness programs Language offerings Career challenges Lifestyle issues Illegal immigration
Chapter 4: PowerPoint 4.8
Culture: the dominant pattern of living, thinking,and believing that is developed and transmittedby people, consciously or unconsciously, tosubsequent generations
Value: a basic belief about a condition that has considerable importance and meaning to individuals and is relatively stable over time
Value system: comprises multiple beliefs that are compatible and supportive of one another
Chapter 4: PowerPoint 4.9
Values can effect how a manager
Why is Culture Important to Managers?(cont’d)
Views otherpeople and
groups
Perceives situations and problems
Goes about solving problems
Determines what isand is notethical behavior
Leadsand controls
employees
Chapter 4: PowerPoint 4.10 (Adapted from Figure 4.2)
Why is Culture Important to Management:Overview of Cultural Factors
Long-TermOrientation
PowerDistance
UncertaintyAvoidance
Gender RoleOrientation
Individualism
Culture
Chapter 4: PowerPoint 4.11
Why is Culture Important to Management:Hofstede’s Framework
Power Distance—the degree to which less powerful members of society accept that influence is unequally divided
Uncertainty Avoidance—the extent to which members of a culture feel threatened by risky or unknown situations
Individualism—a combination of the degree to which society expects to take care of themselves and their immediate family and the degree to which people believe they are masters of their own destinies
Chapter 4: PowerPoint 4.12
Why is Culture Important to Management:Hofstede’s Framework (cont’d)
Gender Role Orientation—refers to the extent to which a society reinforces traditional norms of masculinity versus femininity
Long-Term Orientation—reflects the extent to which a culture stresses that its members accept delayed gratification of material, social, and emotional needs
The opposite of individualism is collectivism—a tight social framework in which group (family, clan, organization, and nation) members focus on the common welfare and feel strongly toward one another
Chapter 4: PowerPoint 4.13
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Power Distance UncertaintyAvoidance
Individualism Gender RoleOrientation
Short-term/Long-termOrientation
Cultural Value Dimension
Imp
orta
nce
of
Cu
ltu
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Ori
enta
tion
Japan
USA
Canada
France
Chapter 4: PowerPoint 4.14 (Adapted from Figure 4.4)
SuppliersSubstitutegoods andservices
NewEntrants
Customers Competitors
Rivalry amongexisting firms
in industry
Chapter 4: PowerPoint 4.15
Bruce D. Henderson, founder and chairman of the Boston Consulting Group
“For virtually all organizations,the critical environment constraint is their actions
in relation to competitors. Therefore, any change inthe environment that affects any competitor will have consequences that require some degree of adaptation. This requires continual change and adaptation by all
competitors merely to maintainrelative position.”
Competitors
Chapter 4: PowerPoint 4.16
High versus low barriers to entry
Economies of scale: achieved when increased volume lowers the unit cost of a good or service produced by a firm
Government regulation: barrier to entry if it bars or severely restricts potential new entrants to an industry
Product differentiation: the uniqueness in quality, price, design, brand image, or customer service that gives one firm’s product an edge over another firm’s
Capital requirements: the dollars needed to finance equipment, purchase supplies, purchase or lease land, hire staff, and the like
Chapter 4: PowerPoint 4.17
In a general sense, all competitors produce substitute goods or services, or goods or services that can easily replace another’s goods or services
Movie rental versus movie theatres
Books versus TV versus newspapers
Purchase versus rental
Cell phone versus hard lines
Chapter 4: PowerPoint 4.18
Customer bargaining power may be relatively great when:
Customer purchases a large volume relative to the supplier’s total sales
Product or service represents a significant expenditure by the customer
Large customers pose a threat of backward integration
Customers have readily available alternatives for the same services or products
Chapter 4: PowerPoint 4.19
Bargaining power of suppliers often controls:
1. how much they can raise prices above their costs or
2. reduce the quality of goods and services they provide before losing customers
Chapter 4: PowerPoint 4.20 (Adapted from Figure 4.5)
Political-Legal Forces: ManagerialPolitical Strategies
Political Strategies Political-Legal Forces
Negotiation Lobbying Alliance Representation Socialization
Political actioncommittees (PACs)
Laws Government Labor unions Others
Chapter 4: PowerPoint 4.21 (Adapted from Figure 4.6)
Technology
Workplace Strategy Manufacturing Distribution
Chapter 4: PowerPoint 4.22
Snapshot
Meg Whitman, CEO, eBay
“With 135 million users selling goods in more than 45,000 categories in 27
international markets, eBay has left all competitors in the dust. Technology has
really changed people’s lives for the better.”
Chapter 4: PowerPoint 4.23
Workers need greater problem-solving skills
Outsourcing routine tasks
Virtual organizations
Chapter 4: PowerPoint 4.24
Faster new product introductions to market
Entrance of “electronic” competitors
Formation of “electronic shopping malls”
Wider choice of suppliers for company
More substitute goods and services available to company
Product differentiation based on technological sophistication
Chapter 4: PowerPoint 4.25
MassCustomization
Reduction inManufacturing time
Outsourcing of routine jobs
Chapter 4: PowerPoint 4.26
Internetaccess forshopping
Telecommunicationdevices
Information superhighwayfor global competition