Management Fourteenth Edition Chapter 3 Managing the External Environment and the Organization’s Culture Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Learning Objectives 3.1 Contrast the actions of managers according to the omnipotent and symbolic views. 3.2 Describe the constraints and challenges facing managers in today’s external environment. Develop your skill at scanning the environment so you can anticipate and interpret changes taking place. 3.3 Discuss the characteristics and importance of organizational culture. Know how to read and assess an organization’s culture. 3.4 Describe current issues in organizational culture. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The Manager: Omnipotent or Symbolic? • Omnipotent view: managers are directly responsible for an organization’s success or failure • Symbolic view: much of an organization’s success or failure is due to external forces outside managers’ control Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Managerial Constraints • In reality, managers are neither all-powerful nor helpless. But their decisions and actions are constrained. • External constraints come from the organization’s environment and internal constraints come from the organization’s culture Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Exhibit 3-1 Constraints on Managerial Discretion Exhibit 3-1 shows that external constraints come from the organization’s environment and internal constraints come from the organization’s culture. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The External Environment • Those factors and forces outside the organization that affect its performance – Economic – Demographic – Political/Legal – Sociocultural – Technological – Global Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Exhibit 3-2 Components of External Environment Exhibit 3-2 shows the different components that make up the external environment. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The Economic Environment • Managers need to be aware of the economic context so they can make the best decisions for their organizations. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The Global Economy and the Economic Context • The lingering global economic challenges began with the turmoil in the U.S. housing market. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Economic Inequality and the Economic Context • Polls show that in many countries, people believe that the gap between the rich and poor is problematic. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The Demographic Environment • Age is a particularly important demographic since the workplace often has different age groups all working together – Baby Boomers – Gen Y (Millennials) – Post-Millennials Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Gen Y Gen Y is an important demographic at Facebook, where most employees are under 40. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved How the External Environment Affects Managers • Jobs and Employment: the impact of external factors on jobs and employment is one of the most powerful constraints mangers face Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Assessing Environmental Uncertainty • Environmental uncertainty: the degree of change and complexity in an organization’s environment – Change: stable to dynamic – Complexity: simple to complex Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Exhibit 3-3 Environmental Uncertainty Matrix Exhibit 3-3 shows the two aspects of environmental uncertainty, change and complexity.