1. The Managerial Environment

2. 4 Managerial Environments
Internal
External
Cultural
Ethics/Social Responsibility

3. The Internal Environment
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4. The Internal Environment
Management and Culture
Organizational culture
The values, beliefs, and assumptions about appropriate behavior that members of an organization share.
Mission
A organization’s purpose or reason for being.
Top management’s responsibility is to develop a mission with clear measurable objectives.
Should be relevant to all stakeholders’ interests.
Is an expression of the ends the organization strives to attain.
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5. The Internal Environment (cont’d)
Resources
Human resources
Physical resources
Financial resources
Informational resources
Systems Process
The method used to transform inputs into outputs.
Process components
Inputs
Transformation
Outputs
Feedback
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6. Exhibit 2–2 ● The Systems Process
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7. The Internal Environment (cont’d)
Structure
The way in which resources are grouped to effectively achieve the organization’s mission.
Organizations structure resources to transform inputs into outputs.
All of an organization’s resources must be structured effectively to achieve its mission.
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9. The External Environment
Task Factors
General Factors
Chaos and Interactive Management

10. The External Environment
Task Factors
Customers
Their needs decide what products businesses offer.
Competition
Competitors’ business practices often have to be duplicated to maintain customer value.
Suppliers
Poor quality suppliers mean poor quality products.
Labor force
Quality labor is needed to produce quality products.
Shareholders
The board of directors monitors management and provides direction for the organization.
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11. The External Environment
General Factors
Society
Businesses are pressured by societal forces to behave in an acceptable manner.
Technology
Firms must stay current on technology to stay competitive and provide customer value.
The Economy
Economic activity has both short and long-term effects on an organization’s ability to provide customer value.
Governments
Policies, rules, and regulations affect what, how much, and how business is conducted.
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12. The External Environment (cont’d)
Chaos and Interactive Management
Reactive managers
Make changes only when forced to by external factors.
Responsive managers
Try to adapt to the environment by predicting and preparing for change before they are required to do so.
Interactive managers
Design a desirable future and invent ways of bringing it about by trying to prevent, not prepare for, threats and to create, not exploit, opportunities.
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14. Exhibit 2–5 ● The Organizational Environment
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15. Business Ethics Ethics
The standards of right and wrong that influence behavior.
Government laws and regulations are designed to govern business behavior.
However, ethics go beyond legal requirements.
Ethical concepts are culturally-bound.
What is considered ethical in one country may be unethical in another.
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16. Business Ethics (cont’d)
Does Ethical Behavior Pay?
Research shows a positive relationship between ethical behavior and leadership effectiveness.
Having strong ethics means having integrity, and people trust others they believe have integrity.
Unethical behavior creates a negative image of big business.
Mahatma Gandhi called business without morality a sin.
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17. Factors Affecting Ethical Behavior
Personality Traits and Attitudes
Moral Development
Ethical Behavior
The Situation
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18. How People Justify Unethical Behavior
Moral Justification
The process of reinterpreting immoral behavior in terms of a higher purpose.
Displacement of responsibility-blaming someone else
Diffusion of responsibility-when no one person is held responsible
Advantageous comparison-comparing oneself to others who are worse
Disregard or distortion of consequences-minimizing the harm
Attribution of blame-someone else was unethical so I had to be unethical too.
Euphemistic labeling-using “cosmetic” words to make the behavior sound acceptable.
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19. Simple Guides to Ethical Behavior
Golden Rule
“Do unto others as you want them to do unto you.”
Four-Way Test
Is it the truth?
Is it fair to all concerned?
Will it build goodwill and better friendship?
Will it be beneficial to all concerned?
Stakeholders’ Approach to Ethics
Creating a win-win situation for all relevant stakeholders so that everyone benefits from the decision.
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20. Social Responsibility
Social Responsibility to Stakeholders
The conscious effort to try to create a win-win situation for all external stakeholders, as well as internal stakeholders.
Does It Pay to Be Socially Responsible?
Social responsibility doesn’t guarantee or improve profits, but scandals do hurt corporate reputations.
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21. KEY TERMS internal environment organizational culture mission
stakeholders
systems process
quality
customer value
total quality management (TQM)
levels of culture
symbolic leaders
learning organization
external environment
global village
ethnocentrism
international business
multinational corporation (MNC)
global sourcing
joint venture
direct investment
ethics
stakeholders’ approach to ethics
social responsibility
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