Don Hellriegel Susan E. Jackson John W. Slocum, Jr.

MANAGING: A COM E!ENC" #ASED A $OACH %%&h E'i&ion

Cha(&er )*Assessing &he En+ironmen&
Prepared by Argie #u&ler !e,as A-M .ni+ersi&/

1earning Goals
%. E,(lain ho0 economic, 'emogra(hic, an' cul&ural 2ac&ors a22ec& organi3a&ions 4. S&a&e &he 2i+e com(e&i&i+e 2orces in an in'us&r/ 5. Descri6e &he (oli&ical an' legal s&ra&egies managers use &o co(e 0i&h changes in &he en+ironmen& ). E,(lain ho0 &echnolog/ changes &he s&ruc&ure o2 in'us&ries
Cha(&er ): o0er oin& ).%

General En+ironmen&*some&imes calle' &he macroen+ironmen&, inclu'es &he e,&ernal 2ac&ors &ha& usuall/ a22ec& all or mos& organi3a&ions

Cha(&er ): o0er oin& ).4

Macroen+ironmen&
!echnolog/ Demogra(hics

oli&ics

Com(e&i&ors

Organi3a&ion
Coun&r/ Cul&ural :alues
Cha(&er ): o0er oin& ).5 7A'a(&e' 2rom 8igure ).%9

Econom/

 Economics is &he 'isci(line &ha& 2ocuses on un'ers&an'ing ho0 (eo(le or na&ions (ro'uce, 'is&ri6u&e, an' consume +arious goo's an' ser+ices

Cha(&er ): o0er oin& ).)

!he Econom/ 7con&@'9

!he Ne0 Age o2 Com(e&i&ion

Ol'
1o0>cos& manu2ac&uring Sel2>reliance Ma'e in ..S.A. 1ocal kno0le'ge h/sical la6or Smoke>s&ack in'us&ries

Ne0
:alue>a''e' ser+ices Ou&sourcing #or'erless com(e&i&ion Cus&omer con+enience Human ca(i&al, so2&0are, kno0le'ge managemen& En+ironmen&al s&e0ar'shi(

Source: A'a(&e' 2rom 8rie'man, !.1. The World is Flat. Ne0 "ork: 8arrar, S&raus - Girou,, 4<<;, )=>%?4.
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Sna(sho&
BOur asse&s lea+e on &he ele+a&or e+er/ nigh&. Organi3a&ions 'o no& o0n human ca(i&alC &he/ can onl/ ren& &hem. In &o'a/@s 0orl', human ca(i&al 0ill ha+e grea&er (o0er &han o&her resources 6ecause i& is &he (eo(le 0ho crea&e kno0le'ge.D

An'/ Gro+e, 8oun'er an' CEO In&el Cor(ora&ion

Cha(&er ): o0er oin& ).A

Im(ac& o2 Changing Demogra(hics on Organi3a&ions

Increasing 'i+ersi&/
Women (ar&ici(a&ion ra&e increasing His(anic men ra&e increasing eo(le o2 color ra&e increasing

Managerial challenges
Mul&icul&ural a0areness (rograms 1anguage o22erings Career challenges 1i2es&/le issues Illegal immigra&ion
Cha(&er ): o0er oin& ).?

 Cul&ure: &he 'ominan& (a&&ern o2 li+ing, &hinking, an' 6elie+ing &ha& is 'e+elo(e' an' &ransmi&&e' 6/ (eo(le, consciousl/ or unconsciousl/, &o su6seEuen& genera&ions
:alue: a 6asic 6elie2 a6ou& a con'i&ion &ha& has consi'era6le im(or&ance an' meaning &o in'i+i'uals an' is rela&i+el/ s&a6le o+er &ime :alue s/s&em: com(rises mul&i(le 6elie2s &ha& are com(a&i6le an' su((or&i+e o2 one ano&her
Cha(&er ): o0er oin& ).=

Wh/ is Cul&ure Im(or&an& &o ManagersG

7con&@'9

:alues can e22ec& ho0 a manager ercei+es si&ua&ions an' (ro6lems Goes a6ou& sol+ing (ro6lems :ie0s o&her (eo(le an' grou(s

De&ermines 0ha& is an' is no& e&hical 6eha+ior

Cha(&er ): o0er oin& ).F

1ea's an' con&rols em(lo/ees

Wh/ is Cul&ure Im(or&an& &o Managemen&: O+er+ie0 o2 Cul&ural 8ac&ors

o0er Dis&ance

1ong>!erm Orien&a&ion

.ncer&ain&/ A+oi'ance Gen'er $ole Orien&a&ion Cul&ure In'i+i'ualism

Cha(&er ): o0er oin& ).%< 7A'a(&e' 2rom 8igure ).49

Wh/ is Cul&ure Im(or&an& &o Managemen&: Ho2s&e'e@s 8rame0ork

o0er Dis&ance*&he 'egree &o 0hich less (o0er2ul mem6ers o2 socie&/ acce(& &ha& in2luence is uneEuall/ 'i+i'e' .ncer&ain&/ A+oi'ance*&he e,&en& &o 0hich mem6ers o2 a cul&ure 2eel &hrea&ene' 6/ risk/ or unkno0n si&ua&ions In'i+i'ualism*a com6ina&ion o2 &he 'egree &o 0hich socie&/ e,(ec&s &o &ake care o2 &hemsel+es an' &heir imme'ia&e 2amil/ an' &he 'egree &o 0hich (eo(le 6elie+e &he/ are mas&ers o2 &heir o0n 'es&inies
Cha(&er ): o0er oin& ).%%

Wh/ is Cul&ure Im(or&an& &o Managemen&: Ho2s&e'e@s 8rame0ork 7con&@'9

!he o((osi&e o2 in'i+i'ualism is collec&i+ism*a &igh& social 2rame0ork in 0hich grou( 72amil/, clan, organi3a&ion, an' na&ion9 mem6ers 2ocus on &he common 0el2are an' 2eel s&rongl/ &o0ar' one ano&her Gen'er $ole Orien&a&ion*re2ers &o &he e,&en& &o 0hich a socie&/ rein2orces &ra'i&ional norms o2 masculini&/ +ersus 2eminini&/ 1ong>!erm Orien&a&ion*re2lec&s &he e,&en& &o 0hich a cul&ure s&resses &ha& i&s mem6ers acce(& 'ela/e' gra&i2ica&ion o2 ma&erial, social, an' emo&ional nee's
Cha(&er ): o0er oin& ).%4

100 90

Im(or&ance o2 Cul&ural Orien&a&ion

80 70 60 50 40 30 20 10 0

"apan USA #anada $rance

Power Distance

Uncertainty Avoidance

Individualism

Gender Role Orientation

Short-term/ on!-term Orientation

Cha(&er ): o0er oin& ).%5

Cul&ural :alue Dimension

Su((liers

Su6s&i&u&e goo's an' ser+ices

Ne0 En&ran&s

Cus&omers

Com(e&i&ors

$i+alr/ among e,is&ing 2irms in in'us&r/

Cha(&er ): o0er oin& ).%) 7A'a(&e' 2rom 8igure ).)9

Com(e&i&ors
B8or +ir&uall/ all organi3a&ions, &he cri&ical en+ironmen& cons&rain& is &heir ac&ions in rela&ion &o com(e&i&ors. !here2ore, an/ change in &he en+ironmen& &ha& a22ec&s an/ com(e&i&or 0ill ha+e conseEuences &ha& reEuire some 'egree o2 a'a(&a&ion. !his reEuires con&inual change an' a'a(&a&ion 6/ all com(e&i&ors merel/ &o main&ain rela&i+e (osi&ion.D #ruce D. Hen'erson, 2oun'er an' chairman o2 &he #os&on Consul&ing Grou(
Cha(&er ): o0er oin& ).%;

 High +ersus lo0 6arriers &o en&r/ Economies o2 scale: achie+e' 0hen increase' +olume lo0ers &he uni& cos& o2 a goo' or ser+ice (ro'uce' 6/ a 2irm ro'uc& 'i22eren&ia&ion: &he uniEueness in Euali&/, (rice, 'esign, 6ran' image, or cus&omer ser+ice &ha& gi+es one 2irm@s (ro'uc& an e'ge o+er ano&her 2irm@s Ca(i&al reEuiremen&s: &he 'ollars nee'e' &o 2inance eEui(men&, (urchase su((lies, (urchase or lease lan', hire s&a22, an' &he like Go+ernmen& regula&ion: 6arrier &o en&r/ i2 i& 6ars or se+erel/ res&ric&s (o&en&ial ne0 en&ran&s &o an in'us&r/
Cha(&er ): o0er oin& ).%A

 In a general sense, all com(e&i&ors (ro'uce su6s&i&u&e goo's or ser+ices, or goo's or ser+ices &ha& can easil/ re(lace ano&her@s goo's or ser+ices Mo+ie ren&al #ooks urchase Cell (hone
Cha(&er ): o0er oin& ).%?

+ersus mo+ie &hea&res +ersus !: +ersus ne0s(a(ers

+ersus ren&al +ersus har' lines

 Cus&omer 6argaining (o0er ma/ 6e rela&i+el/ grea& 0hen:

Cus&omer (urchases a large +olume rela&i+e &o &he su((lier@s &o&al sales ro'uc& or ser+ice re(resen&s a signi2ican& e,(en'i&ure 6/ &he cus&omer 1arge cus&omers (ose a &hrea& o2 6ack0ar' in&egra&ion Cus&omers ha+e rea'il/ a+aila6le al&erna&i+es 2or &he same ser+ices or (ro'uc&s
Cha(&er ): o0er oin& ).%=

 #argaining (o0er o2 su((liers o2&en con&rols:

%. ho0 much &he/ can raise (rices a6o+e &heir cos&s or 4. re'uce &he Euali&/ o2 goo's an' ser+ices &he/ (ro+i'e 6e2ore losing cus&omers

Cha(&er ): o0er oin& ).%F

oli&ical>1egal 8orces: Managerial oli&ical S&ra&egies

oli&ical S&ra&egies oli&ical>1egal 8orces
oli&ical ac&ion commi&&ees 7 ACs9 1a0s Go+ernmen& 1a6or unions O&hers

Nego&ia&ion 1o66/ing Alliance $e(resen&a&ion Sociali3a&ion

Cha(&er ): o0er oin& ).4< 7A'a(&e' 2rom 8igure ).;9

!echnolog/

Work(lace

S&ra&eg/

Manu2ac&uring

Dis&ri6u&ion

Cha(&er ): o0er oin& ).4% 7A'a(&e' 2rom 8igure ).A9

Sna(sho&
With 135 million users selling goods in more than 45,000 categories in 27 international markets, eBay has le t all com!etitors in the dust" Technology has really changed !eo!le#s li$es or the %etter"&

Meg Whi&man, CEO, e#a/

Cha(&er ): o0er oin& ).44

 Workers nee' grea&er (ro6lem> sol+ing skills

Ou&sourcing rou&ine &asks

:ir&ual organi3a&ions
Cha(&er ): o0er oin& ).45

 8as&er ne0 (ro'uc& in&ro'uc&ions &o marke& En&rance o2 Belec&ronicD com(e&i&ors 8orma&ion o2 Belec&ronic sho((ing mallsD Wi'er choice o2 su((liers 2or com(an/ More su6s&i&u&e goo's an' ser+ices a+aila6le &o com(an/ ro'uc& 'i22eren&ia&ion 6ase' on &echnological so(his&ica&ion
Cha(&er ): o0er oin& ).4)

Mass Cus&omi3a&ion $e'uc&ion in Manu2ac&uring &ime

Ou&sourcing o2 rou&ine Ho6s

Cha(&er ): o0er oin& ).4;

In&erne& access 2or sho((ing !elecommunica&ion 'e+ices In2orma&ion su(erhigh0a/ 2or glo6al com(e&i&ion
Cha(&er ): o0er oin& ).4A