2 Chapter The Management Environment Pearson Education Limited

2 Chapter The Management Environment © Pearson Education Limited 2015 2 -1

Learning Outcomes • Explain what the external environment is and why it’s important. • Discuss how the external environment affects managers. • Define what organizational culture is and why it’s important. • Describe how organizational culture affects managers. © Pearson Education Limited 2015 2 -2

2. 1 Explain what the external environment is and why it’s important. © Pearson Education Limited 2015 2 -3

External Environment Factors, forces, situations, and events outside the organization that affect its performance. © Pearson Education Limited 2015 2 -4

Components of the External Environment © Pearson Education Limited 2015 2 -5

How Much Difference Does a Manager Make? Managers: All powerful OR helpless? © Pearson Education Limited 2015 2 -8

Demographics Demography is destiny. Age Cohorts • • Baby Boomers Gen X Gen Y Post-Millenials © Pearson Education Limited 2015 2 -9

2. 2 Discuss how the external environment affects managers. © Pearson Education Limited 2015 2 -10

How Does External Environment Affect Managers? • Jobs and employment • Assessing environmental uncertainty • Managing stakeholder relationships © Pearson Education Limited 2015 2 -11

Assessing Environmental Uncertainty © Pearson Education Limited 2015 2 -12

Managing Stakeholder Relationships Stakeholders: any constituencies in an organization’s environment that are affected by that organization’s decisions and actions. © Pearson Education Limited 2015 2 -13

Organizational Stakeholders © Pearson Education Limited 2015 2 -14

Good stakeholder relationships: • Can lead to desirable organizational outcomes • Can affect organizational performance • Demonstrate doing the “right” thing © Pearson Education Limited 2015 2 -15

2. 3 Define what organizational culture is and explain why it’s important. © Pearson Education Limited 2015 2 -16

What is Organizational Culture? © Pearson Education Limited 2015 2 -17

Organizational Culture Shared values, principles, traditions, and ways of doing things that influence the way an organization’s members act. © Pearson Education Limited 2015 2 -18

Dimensions of Culture © Pearson Education Limited 2015 2 -20

© Pearson Education Limited 2015 2 -21

2. 4 Describe how organizational culture affects managers. © Pearson Education Limited 2015 2 -22

How Does Organizational Culture Affect Managers • Effect on what employees do and how they behave • Effect on what managers do © Pearson Education Limited 2015 2 -23

How Does Culture Affect What Employees Do? Strong cultures: cultures in which the key values are deeply held and widely shared. © Pearson Education Limited 2015 2 -24

Strong Cultures Can: • Substitute formal rules and regulations • Create predictability, orderliness, and consistency © Pearson Education Limited 2015 2 -25

How Does Culture Affect What Managers Do? © Pearson Education Limited 2015 2 -27

Managerial Decisions Influenced by Culture © Pearson Education Limited 2015 2 -29

© Pearson Education Limited 2015 2 -30