MCO 101

Unit 2: The Management Environment

MANAGEMENT

Learning objectives

Explain what the external environment is and

why its important
Discuss how the external environment effects
managers.
Define what organizational culture is and explain
why its important.
Describe how organizational culture affects
managers.
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What is external environment

External environment is
the factors , forces ,
situations, and events
outside the organization
that effect its
performance

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Components of External
Environment

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How has the economy changed

Begin with turmoil in mortgage markets

Spread to businesses when border credit markets

collapse

Called the Great Recession

Characterized by foreclosures , high rates of

unemployment, huge public debt and widespread
social problems

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How will business change?

Role of government in financial markets and in

consumer protection.

Government spending comparable to world war

levels

Additional regulations and increased environment

and oversight of current regulations

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Discuss how the external

environment affects
managers

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How Does External Environment

Affect Managers?

Jobs and employment

Assessing environmental uncertainty

Managing stakeholder relationships

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Assessing Environmental
Uncertainty

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Managing Stakeholder
Relationship

Stakeholders are any constituencies in an

organizations environment that are affected by
the decisions and actions of that organization

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Why Manage Stakeholder

Relationship?
Good Stakeholder relationships can :
positively affect organizational performance.
Be recognized as doing the right thing and show
corporate social responsibility.
Create and reinforce a positive image of the
organization among its stakeholders and community.

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Organizational Stakeholders

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Define What organizational

Culture is and explain
why its important

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What is organizational culture?

Organizational culture is the

shared values, principles,
traditions, and ways of doing
things that influence the way
organizational members act.

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Defining Culture and Its Impact

Culture is a perception.
Organizational culture isnt concerned with
whether members like it.
Employees describe the culture in similar terms
despite their diversity.

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How Can Culture Be Assessed?

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How Do Employees Learn the

Culture?

IMAGE
Stories
Rituals
Material symbols
Language

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Where Does an Organizations

Culture Comes From?
Organizational Culture drives from:
The original source of an organizations culture is
usually a reflection of the vision or mission of the
organizations founders.
What the first employees learned from their own
experiences

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How Does Organizational

Culture affect managers?

Through its effect on what employees do and how

they behave.
Through its effect on what managers do as they
plan, organize, lead, and control.

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How Does Culture Affect What

Employees Do?
A strong culture reflects employee acceptance of,
and commitment to, the organizations key values.
The stronger the culture , the more it affects
employee and manger actions.
A strong culture preempts the need for formal rules
and regulations.

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Managerial decisions affected

by culture
A strong culture reflects employee acceptance of,
and commitment to, the organizations key values.
The stronger the culture , the more it affects
employee and manger actions.
A strong culture preempts the need for formal rules
and regulations.

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Managerial decisions affected

by culture

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Integrative Managerial Issues

Globalization and its

Impact

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What Does It Mean to be Global

Global organizations
Exchange goods and services with customers or use
financial sources and resources from other countries.

Type of global organization

Global village: a world without boundaries where
goods and services are produced and marketed
worldwide.
multinational corporation (MNC) business : a
type of international company that maintains
operations in multiple countries.
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How Do Organizations Go Global?

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Managing in a global organization

Analysing cultural differences according to

Hofstedes framework
Power distance
Individualism vs. collectivism
Quantity of life vs. quality of life
Uncertainty avoidance
Long term vs. short term orientation.

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Social Responsibility

Social responsibility refer to a companys intention

to do the right things and act in ways that are good
for society.

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The Importance of Sustainability

Sustainability is a companys ability to achieve its

business goals and increase long term shareholder
value by integrating economic, environmental , and
social opportunities into its business strategies.

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Different Views of Ethics

Utilitarian view of ethics

Rights view of ethics
Theory of justice view of ethics

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Dissection

1- Explain green management and how organizations

can go green?
2- Discuss the factors that lead to ethical and
unethical behaviour?

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