1. Chapter 3 Environmental Forces
Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002

2. Learning Objectives After reading this chapter, you should be able to:
3.1
Learning Objectives
After reading this chapter, you should be able to:
Describe how economic and cultural factors influence organizations
Identify the five competitive forces that affect organizations in an industry
Describe the principal political and legal strategies used by managers to cope with changes in the environment
Explain how technological changes influence the structure of industries

3. The General Environment
3.2
The General Environment and Environmental Forces Affecting Organizations
The General Environment
Cultural Forces
Political - Legal Forces
Technological Forces
Ecosystem
Competitive Forces
Political System
Organization
Economic System
Demographics
Adapted from Figure 3.1 3

4. Environmentally Conscious Business Practices
3.3
Environmentally Conscious Business Practices
Avoid confrontation with state and federal pollution control agencies
Compensate for environmentally risky endeavors
Comply early with government regulations
Cut back on environmentally unsafe operations
Promote new manufacturing technologies
Recycle wastes
Management action plans

5. 3.4
Value System
Multiple beliefs that are compatible and supportive of one another
Greatly affect how a manager:
Views other people/groups, thus influencing interpersonal relationships
Perceives situations and problems
Goes about solving problems
Determines what is and is not ethical behavior
Leads and controls employees

6. Hofstede’s Framework Power Distance Uncertainty Avoidance
3.5
Hofstede’s Framework
Power Distance
Degree to which influence/control are unequally distributed among individuals within a particular culture
Uncertainty Avoidance
Degree to which members of a society attempt to avoid ambiguity, risk, and indefiniteness of future
Individualism
Extent to which society expects people to take care of themselves and their immediate families
The degree to which individuals believe they are masters of their own destiny

7. Hofstede’s Framework (cont.)
3.6
Hofstede’s Framework (cont.)
Collectivism
Measures tendency of group members to focus on the common welfare and feel loyalty toward one another
Masculinity
Degree to which acquisition of money and material things is valued and high
quality of life is not
Confucian dynamism
Stability of society is based on unequal relationships
Family is the prototype of all organizations
People should treat others as they would like to be treated

8. Relative Ranking of Four Countries on Cultural Values
3.7
Relative Ranking of Four Countries on Cultural Values R a n k i g o u t f 5 c r e s 50 40 30 20 10
Canada
Canada
USA
Taiwan
USA
Japan
Taiwan
Japan
Power
Distance
Uncertainty
Avoidance
Individualism
Masculinity
Confucian
Dynamics
Cultural Value Dimension
Rank Numbers:
1 = Highest; 50 = Lowest
Source: Adapted from G. Hofstede and M. H. Bond. The Confucius connection:
From cultural roots to economic growth. Organization Dynamics, Spring 1988, pp
Adapted from Figure 3.2

9. Competitive Forces in the Task Environment
3.8
Competitive Forces in the Task Environment
Threat
of new
competitors
Suppliers
bargaining
power
Rivalry among
existing firms
in industry
Buyers
bargaining
power
Threat of
substitute
goods/services
Adapted from Figure 3.3

10. Managerial Political Strategies
3.9
Managerial Political Strategies
Political Strategies
Negotiation
Lobbying
Alliance
Representation
Socialization
Political-Legal Forces
Political action committees (PACs)
Laws
Government
Labor unions
Others
Adapted from Figure 3.4