1. Managing in the Global Environment
chapter six
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. What Is the Global Environment?
Set of forces and conditions in the world outside the organization’s boundaries that affect the way it operates and shape its behavior
Changes over time
Presents managers with opportunities and threats

3. Forces in the Global Environment
Figure 6.1

4. What Is the Global Environment?
Task Environment
Set of forces and conditions that originate with suppliers, distributors, customers, and competitors
Affects an organization’s ability to obtain inputs and dispose of its outputs
Most immediate and direct effect on managers

5. What Is the Global Environment?
General environment
The wide-ranging global, economic, technological, sociocultural, demographic, political, and legal forces that affect an organization and its task environment.

6. Barriers to Entry and Competition
Figure 6.2

7. The General Environment
Economic Forces
Interest rates, inflation, unemployment, economic growth, and other factors that affect the general health and well-being of a nation or the regional economy of an organization.
Successful managers:
Realize the important effects that economic forces have on their organizations
Pay close attention to what is occurring in the national and regional economies to respond appropriately 7

8. The General Environment
Technological Forces
Outcomes of changes in the technology that managers use to design, produce, or distribute goods and services
Technological Forces
Results in new opportunities or threats to managers
Often makes products obsolete very quickly
Changes are altering the very nature of work itself, including the manager’s job 8

9. The General Environment
Sociocultural Forces
Pressures emanating from the social structure of a country or society or from the national culture
Sociocultural Forces
Societies differ substantially in the values and norms they emphasize.
Effective managers are sensitive to differences between societies and adjust their behaviors accordingly 9

10. The General Environment
Demographic Forces
Outcomes of change in, or changing attitudes toward, the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class
Demographic Forces
Most industrialized nations are experiencing the aging of their populations as a consequence of failing birth and death rates and the aging of the baby-boom generation
Organizations need to find ways to motivate and utilize the skills and knowledge of older employees 10

11. The General Environment
Political and Legal Forces
Outcomes of changes in laws and regulations, such as deregulation of industries, privatization of organizations, and increased emphasis on environmental protection.
Increasingly nations are joining together into political unions that allow for the free exchange of resources and capital

12. The Global Environment
Figure 6.3

13. Principal Forms of Capital that Flow Between Countries
Human capital
Financial capital
Resource capital
Political capital
• Human capital: the fl ow of people around the world through immigration, migration,
and emigration.
• Financial capital: the fl ow of money capital across world markets through overseas
investment, credit, lending, and aid.
• Resource capital: the fl ow of natural resources, parts, and components between
companies and countries, such as metals, minerals, lumber, energy, food products,
microprocessors, and auto parts.
• Political capital: the fl ow of power and infl uence around the world using diplomacy,
persuasion, aggression, and force of arms to protect the right or access of a
country, world region, or political bloc to the other forms of capital.

14. The Role of National Culture
Norms
Unwritten rules and codes of conduct that prescribe how people should act in particular situations.
Folkways, mores
Many differences in mores from one society to another
Folkways—routine social conventions of daily life (e.g., dress codes and social manners)
Mores—behavioral norms that are considered central to functioning of society and much more significant than folkways (e.g., theft and adultery), and they are often enacted into law. 14

15. Hofstede’s Model of National Culture
Figure 6.4