Chapter

The
Management
Environment
Learning Objectives
• Explain globalization and its impact on organizations
• Discuss how society’s expectations are influencing
managers and organizations
• Describe how the workforce is changing and its
impact on the way organizations are managed
• Discuss trust as the essence of planning

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THE TECHNOLOGICAL ENVIRONMENT

 One of the most pervasive

factors in the external
environment is technology.

 The term technology refers to

the sum total of the knowledge
we have of ways to do things.

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Technology and the Manager’s Job
Continuing advances in technology make work more
efficient and improve available information and
communication
• Technology
– Any equipment, tools, or operating methods that
are designed to make work more efficient
• Intranet
– A private computer network that uses Internet
technology and is accessible only to organizational
members
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Ecological environment
• Ecology means the relationship of people
and other living things and their
environment such as soil, water, and air.

 Land may be polluted by industrial waste such as

packaging

 Water pollution may be caused, for example, by

hazardous waste and sewer systems

 Air pollution can be caused by acid rain, auto

exhaust fumes, carcinogens from manufacturing
processes, and other causes
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What Is Globalization and How
Does It Affect Organizations?
• Global Village
– The concept of a boundaryless world where goods and
services are produced and marketed worldwide
• Multinational Corporation (MNC)
– Any type of international company that maintains
operations in multiple countries.
• Multidomestic Corporation
– An MNC that decentralizes management and other
decisions to the local country where it’s doing business.

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Other Types of Global Organizations
• Global Corporation
– An MNC that invests and operates in many
countries but centralizes management and other
decisions in the home country
• Transnational (Borderless) Organization
– A structural arrangement for global organizations
that eliminates artificial geographical barriers.

Copyright ©2011 Pearson Education, Inc.

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Publishing as Prentice Hall.
How Do Organizations Go Global?
• Global Sourcing
– Purchasing materials or labor from around the
world wherever it is cheapest
• Exporting
– Making products domestically and selling them
abroad
• Importing
– Acquiring products made abroad and selling them
domestically

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Going Global (cont.)
• Licensing
– An agreement primarily used by manufacturing
businesses in which an organization gives another
the right, for a fee, to make or sell its products,
using its technology or product specifications
• Franchising
– An agreement primarily used by service
businesses in which an organization gives another
organization the right, for a fee, to use importing
its name and operating methods
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Going Global (cont.)
• Global Strategic Alliance
– A partnership between an organization and a
foreign company partner(s) in which resources
and knowledge are shared in developing new
products or building production facilities.
• Joint Venture
– A specific type of strategic alliance in which the
partners agree to form a separate, independent
organization for some business purpose.

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Going Global (cont.)

• Foreign Subsidiary
– A direct investment
in a foreign country
that involves setting
up a separate and
independent facility
or office

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What Do Managers Need to Know?
• Parochialism
– A narrow focus in which managers see things only
through their own eyes and from their own
perspective
• All countries have different values, morals, customs,
political and economic systems, and laws, all of
which can affect how a business is managed

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GLOBE Findings
• Global Leadership and Organizational
Behavior Effectiveness (GLOBE)
– An ongoing cross-cultural investigation of
leadership and national culture
– Identified nine dimensions on which national
cultures differ
– Confirm that Hofstede’s dimensions are still valid,
and extend his research rather than replace it

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Socially Responsible Business
 Corporate social responsibility is
“seriously considering the impact of
the company's actions on society”
 Social responsiveness is "the ability
of a business to relate its
operations and policies to the social
environment in ways that are mutually
beneficial to the company and to
society”

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How Can Managers Become More
Ethical?
• Ethics- Commonly refers to a set of rules
or principles that defines right and wrong
conduct.
 Business ethics is concerned with truth
and justice.
• Code of Ethics- A formal document that
states an organization’s primary values
and the ethical rules it expects managers
and nonmanagerial employees to follow
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Whistle-blowing
• Black’s Law Dictionary defines a
whistle blower as ‘an employee
who refuses to engage in and/or
report illegal or wrongful
activities of his employer or
fellow employees’.

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How Does Today’s Workforce
Impact the Way We Manage?
• Workforce Diversity
– Ways in which people in a workforce are similar
and different from one another in terms of
• Gender
• Age
• Race
• Ethnicity
• Cultural Background
• Physical Abilities and Disabilities

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What Does the Workforce Look
Like Today?
• Those born before 1946 - 6 percent of the
workforce
• Baby boomers , born between 1946 and 1964
- 41.5 percent of the workforce
• Generation X, born 1965 to 1977 - 29 percent
of the workforce
• Gen Y , born 1978 to 1994 - 24 percent of the
workforce.

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How Are Managers Adapting to a
Changing Workforce?
• Family-Friendly Benefits
– Benefits that provide a wide range of scheduling
options that allow employees more flexibility at
work, accommodating their needs for work/life
balance
• Contingent Workforce
– Part-time, temporary, and contract workers who
are available for hire on an as-needed basis

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How Can Organizations Improve
Quality?
• Continuous Improvement
– An organization’s commitment to continually
improving the quality of a product or service
• Kaizen
– The Japanese term for an organization’s
commitment to continuous improvement
• Work Process Engineering
– Radical or quantum change in an organization.

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Planning defined
Planning involves selecting
missions and objectives and the
actions to achieve them; it
requires decision making, that is,
choosing from among alternative
future courses of action.

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 Types of Plans

Plans can be classified as:

(1) mission or purposes (5) procedures

(2) objectives or goals (6) rules

(3) strategies (7) programs

(4) policies (8) budgets

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1. The mission, or purpose, identifies the basic purpose
or function or tasks of an enterprise or agency or
any part of it
2. Objectives, or goals, are the ends toward which
activity is aimed
3. Strategy is the determination of the basic long-term
objectives of an enterprise and the adoption of
courses of action and allocation of resources
necessary to achieve these goals
4. Policies are general statements or understandings
that guide or channel thinking in decision making
5. Procedures are plans that establish a required method
of handling future activities
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Steps in planning process
1. Being Aware of Opportunities
2. Establishing Objectives or Goals
3. Developing Premises
4: Determining Alternative Courses
5. Evaluating Alternative Courses
6. Selecting a Course
7. Formulating Derivative Plans
8. Quantifying Plans by Budgeting

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Objectives
 Objectives are the important
ends toward which
organizational and individual
activities are directed

 An objective is verifiable when at

the end of the period one can
determine whether or not the
objective has been achieved
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