ENVIRONMENT OF ORGANISATION 12/6/2018 RMK252 ENVIRONMENT

ENVIRONMENT OF ORGANISATION External Environment International Dimension Define Information ENVIRONMENT OF ORGANISATION Uncertainty & Dependence Management 12/6/2018 RMK252 ENVIRONMENT

ORGANISATIONAL ENVIRONMENT The Rise of Classical Theory The Challenge of Change External Environment 12/6/2018 RMK252 ENVIRONMENT

The Rise of Classical Theory The Neo-Human Relation Movement The Contingency Approach The System Approach The Quantitative School The Behavioral Sc School Classical Management Theories 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 Protes Movement (60s – 70s) Labour Shortage WW 11(1941-1945) Deming Lecture on Quality in Japan WW 1(1914-1918) IBM PC Introduced) The Great Depression 12/6/2018 RMK252 ENVIRONMENT

ORGANIZATION AND MANAGEMENT The Challenge of Change Preparing for the Future Major Changes Includes: Paradigm Shifts Chaos Theory Workplace Diversity Merger & Acquisition Not-for-profit Organization Globalization 12/6/2018 RMK252 ENVIRONMENT

specific (direct impact) 2 types general (indirect impact) EXTERNAL ENVIRONMENT Definition: “All elements outside an organisation that are relevant to its operation” Stoner (92:63) specific (direct impact) 2 types general (indirect impact) 12/6/2018 RMK252 ENVIRONMENT

ORGANISATION AS A SYSTEM AND ITS ENVIRONMENT Greatest uncertainty Strategic Level Mediator Economic and technical rationality Coordinative Level Operating Level Input from environment Close Output to environment Activity process Environmental Forces Open 12/6/2018 RMK252 ENVIRONMENT Boundaries

THE GENERAL & SPECIFIC ENVIRONMENTS OF AN ORGANISATION Social Variables Technological Variables Competitors Customers Financial Institution Supplies THE ORGANISATION Labour Union Govern-ment Special Interest Group The Media Economic Variables Political Variables 12/6/2018 RMK252 ENVIRONMENT

SPECIFIC (DIRECTION-ACTION) ENVIRONMENT Customers Supplier - General - Specific (vendors) Government - Regulative Law Special Interest Group – NGO’s Media - wide coverage and immediate - ‘Fishbowl effect’ Labour Unions – collective bargaining power Financial institution – loans Competitors - to increase market share (i) gain additional customers, (ii) beat other competitors. Technological Components - meeting new techniques requirements of own industry. 12/6/2018 RMK252 ENVIRONMENT

GENERAL ENVIRONMENT (INDIRECT ACTION) SOCIAL VARIABLES Demographic (i) race segment (ii) age group (iii) birth rate (iv) sex Lifestyle (i) inc. in single parent (ii) inc. women in labour force (iii) towards better education Social value (i) work value (ii) Japan – lifetime (iii) US – participative (iv) French – rigid/formal 12/6/2018 RMK252 ENVIRONMENT

GENERAL ENVIRONMENT (INDIRECT ACTION) ECONOMIC VARIABLES General Economic Conditions Indicator (i) GDP, income percapita expenditure; (ii) Saving, investment; (iii) Prices, wages and productivity; (iv) Labour force; (v) Government activities; & (vi) International transaction. 12/6/2018 RMK252 ENVIRONMENT

GENERAL ENVIRONMENT (INDIRECT ACTION) POLITICAL VARIABLES Political climate that affects organisations Regulations Policies TECHNOLOGICAL VARIABLES Technological Development - Computer technology - Aviation technology - Automobile technology - Construction technology 12/6/2018 RMK252 ENVIRONMENT

THE INTERNATIONAL DIMENSION Globalization – borderless world. Multinational companies Uncertainty and Dependence Environment Factors Affecting an Organisation’s Uncertainty and Dependence Uncertainty More differentiated Changing Numerous interconnection among its various elements Dependent Required resources are not widely availabled Resources not evenly distributed Increasing connectedness 12/6/2018 RMK252 ENVIRONMENT

MANAGERS’ PERCEPTION OF THE ENVIRONMENT Manager Action Influence specific environment Monitoring general environment Increasing connectedness General Environment Goals and values Technology Structure Human Relationships Managerial Processes Decision that influence Managerial Perception Specific Environment 12/6/2018 RMK252 ENVIRONMENT

CONSTRUCTION ENVIRONMENT SUBCONT-RACTORS SUPP-LIERS INTERNATIONAL MANAGE-MENT NATIONAL LABOUR LOCAL CLIENTS PLANT ORGANISATION CONSULTANTS FINANCE PROJECT INPUTS OUTPUTS CONVERSION POLITICS & LAW TECHNOLOGY ECONOMICS SOCIOLOGY THE ENVIRONMENT 12/6/2018 RMK252 ENVIRONMENT

LOCAL COMMUNITY GROUPS ECONOMICS SOCIETY Environmental Levels REGULATORY AGENCIES GENERAL ENVIRONMENT GOALS CREDIT-ORS Dept 1 Dept 2 OUTPUTS INPUTS INTERNAL ENVIRONMENT SUPPLIERS COMPETITION EFFICIENCY FEEDBACK TRADE UNIONS ETC. LOCAL COMMUNITY GROUPS FINANCIERS SHAREHOLDERS OPERATING ENVIRONMENT LAW POLITICS TECHNOLOGY 12/6/2018 RMK252 ENVIRONMENT

THE END 12/6/2018 RMK252 ENVIRONMENT

THANK YOU 12/6/2018 RMK252 ENVIRONMENT