Part1: Defining the Managers Terrain:

Chapter 2: Environmental Constraint on Managers:

The Manager: How Much Control? Omnipotent view of management: The views of mangers are directly responsible for an organizations success or failure. Symbolic view of management: The loss of sales was not the managers fault. The symbolic view says that a managers ability to affect outcomes is influenced and constraint by external factors. Internal and external constraints that restrict a managers decisionmaking options exist within every organization. Internal constraints arise from the organizations culture and external constraints come from the organizations environment. The External Environment: Outside forces and institutions that potentially can affect the organizations performance.

The specific environment: The part of the external environment that is directly relevant to the achievement of an organizations goals. Customers: An organization exists to meet the needs of customers who use its output. Customers represent potential uncertainty to an organization. Suppliers: Managers seek to ensure a steady flow of needed input (supplies) at the lowest price possible. An organizations supplies being limited or delayed in delivery can constrain managers decisions and actions. Competitors: All organizations profit and nonprofit have one or more competitors. Public Pressure Groups: Managers must recognize the special-interest groups that attempt to influence the actions of organizations. The general environment: Broad external conditions that may affect the organization. Economic conditions: Interest rates inflation, changes in disposable income, stock market fluctuations, and the stage of the general business cycle are some of the economic factors that can affect management practices. Legal-Political Conditions: Federal, provincial, and local governments influence what organizations can and cannot do. Some federal legislation has significant implications. Socio-Cultural Conditions: Manager must adapt their practices to the changing expectations of the societies in which they operate. As societal values, customs, and tastes change, mangers also must change. Demographic Conditions: Encompass trends in the physical characteristics of a population such as gender, age, level of education, geographic location, income, family composition, and so forth. Changes in these characteristics may constrain how mangers plan, organize, lead and control. Technological Conditions: In terms of the general environment, the most rapid changes have occurred in technology. The whole area of technology is radically changing the fundamental ways that organizations are structured and the way that managers manage.

Global Environment: The global environment present both opportunities and challenges for manager. With the entire world as a market ad national borders becoming increasingly irrelevant, the potential for organizations to grow is expanding dramatically. However, even large successful organizations with talented mangers face challenges in managing in the global environment. Global trade: When trade is allowed to flow freely, countries benefit from economic growth and productivity gains because they specialize in producing the goods that are best at and importing goods that are more efficiently produced elsewhere. Global trade is being shaped by two forces: The European Union (EU): A union of 27 European countries that forms an economic and political entity. The North American Free Trade Agreement (NAFTA): An agreement among the Canadian, American, and Mexican governments in which barriers to free trade were reduced. The association of Southeast Asian Nations (ASEAN): A trading alliance of 10 Southeast Asian countries. The World Trade Organization (WTO): A global organization of 153 member countries that deals with the rules of trade among nations. The Legal-Political Environment: The stability of laws governing the actions of individuals and institutions allows for accurate predictions. The same cannot be said for all countries. The legalpolitical environment does not have to be unstable or revolutionary to be a concern to mangers. Just the fact that a countrys laws and political system differ from those of the other countries is important. The economic environment: It is important to have an understanding off the type of economic system under which the country operates. Market economy: An economic system in which resources are primarily owned and controlled by the private sector. Planned economy: An economic system in which all economic decisions are planned by a central government. In actuality no economy is purely market or planned. The cultural environment: The values and attitudes shared by individuals from a specific country that shape their behavior and beliefs about what is important. (There is the national culture and the organizational culture.)

Hostedes Five Dimensions of National Culture: 1. 2. 3. 4. 5. Individualistic-Collectivistic High-Low Power Distance High Uncertainty Avoidance Achievement- Nurturing Long Term- Short Term Orientation

Doing business Globally: Different Types of International Organizations: Multinational Corporations (MNC): A broad term that refers to any and all types of international companies that maintain operations in multiple countries. Multidomestic Corporations: An international company that decentralizes management and other decisions to the local country. Global Company: An international company that centralizes management and other decisions in the home country. Transnational or Borderless Organizations: A type of international company in which artificial geographical barriers are eliminated. Born Globals: International companies that choose to go global from inception.

Multinational Corporation Operate in multiple countries Manage from the home country

Multidomestic Corporation Multiple countries Decentralized management

Global Company International company Centralized management

Borderless Organizations Eliminate artificial geographical barriers

Born Global Global from inception

How Organizations Go Global: Global Sourcing: Purchasing materials or labor from around the world, whether it is cheapest. Importing and exporting: An approach to going global that involves making products at home and selling them abroad

(exporting)/ involves acquiring products made abroad and selling them at home (importing). Licensing and Franchising: An approach to going global in which a manufacturer gives another organization the right to use its brand name, technology, or product specifications (Licensing) / which a service organizations gives a person or group the right to sell a product, using specific business methods and practices that are standardized (Franchising). Strategic Alliance: An approach to going global that involves a partnership between domestic and foreign company in which both share resources and knowledge in developing new products or building production facilities. Joint venture: An approach to going global in which the partners agree to form a separate, independent organization for some business purpose; it is a type of strategic alliance. Foreign Subsidiary: (filiale) An approach to going global that involves a direct investment in a foreign country by setting up a separate and independent production facility or office.

How the Environment Affects Managers: Assessing Environmental Uncertainty: Environmental Uncertainty: The degree of change and the degree of complexity in an organizations environment. Environmental Complexity: The number of components in an organizations environment and the extent of the organizations knowledge about those components.

Managing Stakeholder Relationships: Stakeholders: Any constituencies in the organizations external environment that are affected by the organizations decisions and actions. Shareholders (or stockholders): Individuals or companies that own stocks in business.

The Pros and Cons of Globalization:

Doing Business Abroad: Some reasons for expanding abroad include Sales expansion Reducing labor and other costs Sourcing high quality goods and services Smoothing out sales and profit swings

Factors to consider before expanding abroad: Cultural distance (languages and religions) Administrative distance (absence of shared monetary or political associations) Geographic distance (physical remoteness) Economic distance (differences in consumer incomes). Ethics in a Business Environment: What are Ethics? Derived from the Greek word "ethos", which means "way of living", ethics is a branch of philosophy that is concerned with human conduct, more specifically the behaviour of individuals in society. Ethics examines the rational justification for our moral judgments; it studies what is morally right or wrong, just or unjust. Ethics and the Law: Something may be legal but not right (ethical) Something may be right (ethical) but not legal. Managers, Business, and Ethics: Is there a contradiction between business objectives and ethical concerns? How ethical should businesses be? Moral Minimum The idea that corporations should be free to strive for profits so long as they commit no harm.

What Influences Ethical Behaviour at Work?

Individual: personal beliefs of employees, what is right, what is wrong Organizational: organizational culture, incentives and benefits Top Management: Behaviour, beliefs, and commitment of company leaders Ethics Policies and Codes: does the company have one? is it reinforced? How to Foster Ethics at Work? Emphasize top managements commitment. Publish an ethics code. Establish compliance mechanisms. Involve personnel at all levels. Train employees. Measure results. Sustainable Development: What is Sustainable Development? Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts: The concept of needs, in particular the essential needs of the world's poor, to which overriding priority should be given. The idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs."

Sustainable Development is Base on: Concern for equity and fairness All over the world, everyone should have the same opportunities. Long-term view What was done yesterday and what is being done today will influence tomorrow Set in space What I do here influences what happens there Systems thinking Interrelated Systems:
Economy

Environment

Society

Changes Needed: Produce differently Consume differently Organize ourselves differently