CHAPTER 3: The Task and Macro

Environments of Management

Introduction to the environments of

management
ENVIRONMENTS OF MANAGEMENT:
Task environment
Marco environment
International Environment

Task environment
Contains four key groups of stakeholders
that managers need to pay attention to:
Costumers
Members
Owners
Other organizations (e.g., suppliers and
competiors)

Macro Environments
Contains four dimensions that managers
must deal with at the regional or national
level:
Sociocultural environment
Natural environment
Political-legal environment
Economic-technological environment

The Mainstream View of

Key Stakeholders in the
Task Environment

Stakeholders - is any group within or outside the

organization that is directly affected by the organization and
has a stake in its performance

 Customers
The stakeholders who consume an
organizations product and service outputs.
INFLUENCE OF CUSTOMERS ON MANAGERS
Serving customers permits maximizing an organization's
financial viability.
Paying customers are the life blood of bussiness organization
Customer service is especially important because better
service leads to greater loyalty (repeat business), whice in
turn leads to higher profits.

INFLUENCE OF MANAGERS ON CUSTOMERS

Business managers try to develop a stable or growing
cutomer base.
Accomplished in a variety of ways, including advertising and
marketing, providing excellent products and services at
resonable prices, designing products and services to meet the
needs of cutomers, and outperforming competitors.

Members
are employees and volunteers who work for or
belong to an organization.
INFUENCE OF MEMBERS ON MANAGERS
Primary goal of managers is to maximize members' productivity in the

workplace
If members are producive, then managers will be evaluated as doing a
good job.
Managers who adapt their style to the strengths and weaknesses of
members will be more successful.

INFUENCE OF MANAGERS ON MEMBERS

Maximize members' efforts by appealing to their self-interest
Linking thier on-the-job productivity to thier pay or future promotions
Their relationships with thier managers have an influence on
members motivation, self-confidence, identity and job satisfaction

 Owners
are stakeholders who make the basic decisions
as to what an organization is and does and are
responsible for the creation and overarching
governance of the organization.
INFLUENCE OF OWNERS ON MANAGERS
Managers in both business and nonbusiness organizations
must look out for owners' interest by following proper
accounting procedure, providing reports about the
organization's performance, and taking responsibilty for their
decisions and actions.

INFLUENCE OF MANAGERS ON OWNERS

Focus on the materials interest of the owners
Owners depend on the judgment and information provided by
managers
Managers have a lot of influence about what know and thus
whick kind of decisions owners will make.

Other Organization
are external stakeholders linked to an
organization. (e.g. suppliers, competitors, etc)
INFUENCE OF MEMBERS ON MANAGERS
Suppliers and competitors set contraints on what managers do.

INFUENCE OF MANAGERS ON MEMBERS

The goal of management is to gain as much control as possible over
suppliers and secure advantages over competitors.
Managers may also be sensitive to concern of organizations other
than suppliers and competitors, especially when it enhances the
bottom line.
Managers may try to improve their organization's financial
performance by enhancing its reputation.

The Mainstream View Of The

Four Dimentions In The Macro
Environment

Sociocultural Environment
- refers to the norms, customs, and values of a
general population and its demographic subgroups.
INFUENCE OF SOCIOCULTURAL ENVIRONMENT ON MANAGERS
This environment influences the needs and want of customers,
expectation of members and owners, and the attitude of competitors
and suppliers.
As a result, managers must monitor trends in demographics, health
care, education, and other social institutions, among other areas.
Managers adapt to trends in the scociocultural environment so that
they can maximize the material gains for their organization.
INFUENCE OF MANAGERS ON SOCIOCULTURAL ENVIRONMENT

One way that managers can shape puplic opinion and sociocultural
values is by supporting think tanks that promote thier organizational
interest.
Think Tank - is an organization that conducts research to inform
and influence areas such as social and public policy, technology
and defence

Another way that managers try to shape sociocultural environment is

via the media

Natural Environment
- composed of all living and nonliving things that
have no been created by human technology or
human activity.
INFUENCE OF NATURAL ENVIRONMENT ON MANAGERS
Managers depend on the natural environment to draw
organizational inputs (eg., raw materials, natural resources,
minarals, water, air) and to dispose of organizational outputs (eg.,
Products, waste)
Natural resources can serve as inputs (e.g, farmland to grow
food, mines for getting minerals) and can also elp to get rid of
organizational waste (e.g, forest land to convert carbon dioxide
into oxygen
Ecological footprint - refers to how many of earth's natural resources,
measures in acres, are required to sustain human consumption and to
absorb the resulting waste.
is becoming a popular way for managers to think about how many
natural resources their organizations use.

 INFUENCE OF MANAGERS ON NATURAL ENVIRONMENT

A growing social awaness of ecological problems has prompted
managers to become increasingly sensitive to the natural
environment.
(Figure 3.5) The approach that managers take to the natural
environment varies a long continuum. Because their explicite
emphasis on multiple forms of well-being is sensitive to the natural
environment, multistream managers would tend to be farther to the
right on the the continumm than are mainstream managers.
Obstructionist- the least sensitive to the natural environment
Defensive strategy- managers do only as much as legally required
Market Approach- managers show concern for environmental
concern in reponse to demands or opportunities in the market place.
Accomodation or Stakeholder- goes beyond the market
approach and respons to the environmental concerns of various
stakeholder groups, including customers, the local community,
business partners, and special interest groups.

Political-Legal Environment
- includes both the prevailing philisophy and objectives of
the various of government, as well as their ongoing laws
and regulations
Two basic varieties of capitalisim:
Documentational Capitalism- which is prevelent in
English-speaking countries. Is characterized by an emphasis
on detailed contracts, public financial reports, management
independence and rights.
Rational Capitalism- is which characterized by an
emphasis on relational contracts, the long term reputations
of organizations, and interdependence and rights of
stakeholders.
Managers invest considerable resources in managing
the political-legal environment.

Economic-Technological Environment
- refers to how financially resources are used and
distributed within a specific region or country.
Technology- refers to the combination of equipment
and skills by which the aqusition, design, production,
and distribution of goods and services are managed.
INFUENCE OF THE ECONOMIC ENVIRONMENT ON MANAGERS
The economic environment includes factors such as the following:
Unemployment rates (the ease of hiring workers)
Interest rates (the ease of getting working capital)
Inflation rates (The stability of prices and costs)
Dispose income (the overall amount of money that consumers
have available for spending)
Mainstream managers focus on those factors that influence their
organizations' short-term financial interest.

 INFUENCE OF MANAGERS ON ECONOMIC ENVIRONMENT

Aquisitive economics- refers to managing property and wealth in
such a way as to maximize the short-term monetary value for
owners.
The mainstream approach to economics adopts a materialistindividualist perspective, where it is assumed that all individuals will
pursue their material self-interest. When managers learn to expect
this behavior from others , it helps them to understand how the world
works.
INFUENCE
OF THE TECHNOLOGICAL ENVIRONMENT ON MANAGERS
Technoogy determines the choice available regarding how inputs
are transformed into outputs in their organization.
Mainstream managers try to keep abreast of changing technologies,
and they choose those that will maximize productivity and
profitability.

 INFUENCE OF MANAGERS ON THE TECHNOLOGICAL ENVIRONMENT

For mainstream managers, an important goal is to stay ahead of the
competition.
the focus is on developing or finding those new technologies that
allow better customers sevices, state-of-the-art products, and
increasingly efficiency
Managers influence which kind of technology is being developed is
by forming strategic alliances with university researchers
Technology is also seen as helping to solve significat problems.