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Management (20)
33:620:301 (19)
Xi Wang (11)

Management Topic 10 Notes.docx

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Rutgers University
Xi Wang

Management Topic 10 Notes 11/23/13 Managing in the Global Environment a) Overview - Aglobal organization is one that operates and competes in more than 1 country - Operating in global environment is complex because it changes constantly b) What is the global environment? - The global environment is a set of forces and conditions in the world outside an organization’s boundary that affect how it operates and shape its behavior, affects manager’s ability to acquire and utilize resources - The task environment is the set of forces and conditions that originates with global suppliers, distributors, customers, and competitors; these forces and conditions affect an organization’s ability to obtain inputs and dispose of its outputs; have most immediate and direct effects on managers - The general environment includes the wide-ranging global, economic, technological, sociocultural, demographic, political, and legal forces that affect the organization and its task environment  often more difficult to identify and respond to c) The Task environment 1) Suppliers: the individuals and companies that provide an organization with the input resources (such as raw materials, component parts, or employees) it needs to produce goods and services - Manager needs reliable supply of input resources - If supplier has strong bargaining power this can present an issue to managers because suppliers can raise input prices - Supplier power is strong when: supplier is sole source of an input and when input is vital to the organization - Global outsourcing occurs when a company contracts with suppliers in other countries to make the various inputs or components that go into its products or to assemble the final products to reduce costs 2) Distributors: organizations that help other organizations sell their goods or services to customers 3) Customers: are the individuals and groups that buy the goods and services an organization produces. - Organization’s success depends on responsiveness to customers 4) Competitors: organizations that produce goods and services that are similar and comparable to a particular organization’s goods and services - Potentially the most threatening force - Potential competitors are organizations that are not presently in a task environment but have the resources to enter if they so choose - The potential for new competitors to enter a task environment is a function of barriers to entry, which are factors that make it difficult and costly for a company to enter a particular task environment or industry - Barriers of entry result from: economies of scale (cost advantages associated with large operations, result from factories such as manufacturing products in large quantities, buying inputs in bulk, or making more effective use of organizational resources than do competitors by fully utilizing employees’ skills), brand loyalty (customer’s preference for the products of organizations currently in the task environment), and government regulations d) The general environment 1) Economic forces: affect the general health and well-being of a country or world region; includes interest rates, inflation, unemployment, and economic growth - Poor economic conditions make environment more complex and managers’jobs more difficult and demanding 2) Technological forces: technology is the combination of tools, machines, computers, skills, information, and knowledge that managers use to design, produce, and distribute goods and services; technological forces are the outcomes of changes in technology - Changes in IT alter the nature of work itself 3) Sociocultural forces: pressures emanating from the social structure of a country or society or from the national culture, such as concern for diversity - Social structure is the traditional system of relationships established between people and groups in a society - In societies with a higher degree of social stratification, there are many distinctions among individuals and groups - In the US, social stratification is lower, social structure reveals few distinctions among people - National culture is the set of values that a society considers important and the norms of behavior that are approved or sanctioned in that society 4) Demographic forces: are outcomes of changes in, or changing attitudes towards, the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class 5) Political and legal forces: outcomes of changes in laws and regulations within a nation, world region, or across the world and significantly affect managers and organizations everywhere - NAFTA: nort
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