management 301 day 3 notes
management 301 day 3 notes MGMT 301
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This 3 page Class Notes was uploaded by Hannah Mitchell on Sunday April 3, 2016. The Class Notes belongs to MGMT 301 at Washington State University taught by Dr. Leah Sheppard in Spring 2016. Since its upload, it has received 17 views. For similar materials see Principles of Management and Organization in Business, management at Washington State University.
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Date Created: 04/03/16
External environment Organizations do not exist in a vacuum External environment: forces external to the organization that inevitably influence the organization ex: the influence of the internet and IPods on record stores three factors: change, complexity, and resource scarcity environmental change: rate at which a company’s general and specific environments change stable environment: rate of change is slow (construction, wholesale food distribution) dynamic environment: rate of change is fast (mobile phones smart phones) punctuated equilibrium theory: companies go through long periods of stability, followed by short periods of dynamic, fundamental change, and then a new equilibrium airline industry deregulation, change in customer base, rising cost of oil, 9/11 environment complexity: number and the intensity of external factors in the environment that affect organizations simple environment: include few factors complex environment: includes many factors (like laptops: consumers have a lot of choices) resource scarcity: abundance or shortage of critical organizational resources in an external environment electricity, manpower, skills External environment change, complexity, and scarcity all combine to produce different levels of uncertainty uncertainty: extent to which managers can predict which external changes and trends will affect their businesses Components of the general environment 1. economy a. consumers grow in: - growing economy: more money to spend - shrinking economy: less money to spend Components of the general environment how can we predict economic trends? business confidence indices: show managers’ level of confidence about future economic growth since managers will base decision on their own confidence – and this will influence the economy – other managers might see these statistics as more useful than economic statistics, which often fail to predict the future accurately meanwhile, more competition for lower-paid and tightening labor market Walmart has raised its wages to remain competitive Components of the general environment 2. Technology: knowledge, tools, and techniques used to transform inputs into outputs a. Changes in technology help companies provide better products if used correctly b. Technology can also be a threat when competitors have better handle on it or when employees have numerous new distractions 3. Sociocultural a. Demographic characteristics, general behavior, attitudes, and beliefs of people b. Changes in demographic characteristics affect how companies staff their businesses c. Changes in behavior, attitudes, and beliefs affect demand (ex: home and car ownership don’t seem as important for younger generations, particularly in larger cities) 4. Political/Legal a. Legislation, regulations, and court decisions that govern and regulate business behavior b. Managers must be aware of the laws, regulations, and potential lawsuits that could affect their business - Oregon bakery fined $135,000 for refusing to sell a wedding cake to a lesbian couple - Under Oregon law, you cannot refuse service on the basis of this Components of the specific environment 1. Customers a. Reactive customer monitoring: - address problems after they occur - what is Listen360? - Promoters, passives, detractors b. Proactive customer monitoring: - Address customer needs BEFORE they occur - Amazon knows what you’ve looked at, put in your cart and then decided not to buy, etc. 2. Competitors a. Competitive analysis: who are your competitors, what are they doing, what will they do, what are are their strengths and weaknesses? b. A big mistake is looking at a competition as a “race to the bottom”; it should be framed as an opportunity for differentiation 3. Suppliers: a. Provide material, human, financial and informational resources to other companies b. Supplier dependence: how much does a company rely on their supplier function of importance and alternatives c. Buyer dependence: how much does a supplier rely on the buyer 4. Industry regulation a. Specific to the industry, often applicable to food - Regulations on soda sizes at movie theatres 5. Advocacy groups a. Groups of concerned citizens who attempt to influence business and industry practices - Public communications approach: voluntary participation of media and advertising, might use celebrities - Media advocacy approach: aggressive, expose questionable or unethical practices, create controversy to guarantee news coverage (looking for a more emotional response) (PETA undercover videos) - Product boycott approach: group tries to convince customers not to purchase a product or service Making sense of changing environments Three-step process employed by managers Environmental scanning: searching the environment for important events or issues that might affect an organization Involves a lot of research Interpreting environmental factors: is the relevant issue a threat or an opportunity? Threat = reactive Opportunity = proactive Act on issues to develop strategy