Tuesday, 5 October 2021
• Manager’s wider environment ( read chapter 3 & 4)
1. The external environment of an organisation
- The general and task environment
Task
environment
has a direct
impact on the
organisation.
General
environment
has an indirect
impact.
• Organisational ecosystem
- A system formed by the interactions among a community of organisations in
the organisational environment.
I.e. An ecosystem includes organisations in all the sectors of the task and general
environments that provide the resource and information transaction, flows and
linkages necessary for an organisation to thrive.
E.g. Apple’s ecosystem:
- Hundreds of suppliers and millions of customers across several industries.
- Resources and information flows and linkages necessary to thrive.
- Interactions with suppliers very important.
Example Industries :
Consumer electronics
Internet services
Mobile phones +Personal computers
Entertainment
1
, Tuesday, 5 October 2021
General environment (ITSELN)
1.International dimension:
- Global population about 7.8 billion- Opportunities to expand into global markets
and to build a global supply chain.
- Provides new customers, new competitors and new suppliers; and shapes social,
technological and economic trends as well.
E.g. Starbucks.
Sales in UK and Germany were very good, however, sales in France were
disappointing. After 8 years, 63 Starbucks stores in France never turned a profit.
Sluggish (inactive) economy and Europe’s dept crisis hurt the sales. There were also
high labour and rent costs. Starbucks were slow to tailor the Starbucks experience
to suit the French Cafe environment.
- Starbucks is known for its ‘Grab and go’, making it convenient in countries like
the UK and Germany, however, in places like France, they are looking for a place
that offers, slow coffee, and a lounge to sit down. This was offered quite late
(Starbucks were slow to penetrate into French market).
Chinese case study
- One country contains approx. 20% of the population
- Economic growth of last year 6% (pre-covid) (this is huge) is lowest for 25 years.
UK was more or less 0 growth.
Globalisation:
• The extent to which trade and investments, information, social and cultural ideas,
and political cooperation flow between countries.
- Creates a borderless world for today’s managers
General Agreement on Tariffs and Trade (GATT), signed on October 30, 1947, by 23
countries, was a legal agreement minimizing barriers to international trade by
eliminating or reducing quotas, tariffs, and subsidies while preserving significant
regulations.
2
, Tuesday, 5 October 2021
International business environment
• International management is the management of business operations conducted
in more than one country.
- It took McDonald’s more than a year to realise that Hindus in India don’t eat beef
as they consider the cow sacred.
- When IKEA laughed a superstore in Bangkok, managers learned that some its
Swedish product names sound rude when pronounced in Thai.
- United Airlines handed out white carnation when it started flying to Hong Kong,
only to discover that to many Asians, such flowers represent death and bad luck.
2. Technological dimension
- Scientific and technological advancements in a specific industry.
- Helps drive competition and helps innovative companies to gain market share.
- Transforms consumer expectations in an entire industry.
One of the skills needed is to choose the right type or appropriate type of
technology for your business.
E.g. many book stores have gone out of business as they failed to adapt to
technological needs of consumers, which were provided my competitors like
amazon and google.
3. Sociocultural dimension
- Geographical distribution and population density, age, and education levels.
- Managers need to understand and address these characteristics in the
organisation’s business plans.
Nowadays (generally):
• The education level is high
• Information is exchanged faster hence consumers are better informed
• The number of people living in cities will increase
• Need for advanced technological applications to meet their needs
All these things, allow so much access to information + competition (e.g.
consumers can’t reach rating for restaurants, product, etc.) These all influence
future purchases.
3
• Manager’s wider environment ( read chapter 3 & 4)
1. The external environment of an organisation
- The general and task environment
Task
environment
has a direct
impact on the
organisation.
General
environment
has an indirect
impact.
• Organisational ecosystem
- A system formed by the interactions among a community of organisations in
the organisational environment.
I.e. An ecosystem includes organisations in all the sectors of the task and general
environments that provide the resource and information transaction, flows and
linkages necessary for an organisation to thrive.
E.g. Apple’s ecosystem:
- Hundreds of suppliers and millions of customers across several industries.
- Resources and information flows and linkages necessary to thrive.
- Interactions with suppliers very important.
Example Industries :
Consumer electronics
Internet services
Mobile phones +Personal computers
Entertainment
1
, Tuesday, 5 October 2021
General environment (ITSELN)
1.International dimension:
- Global population about 7.8 billion- Opportunities to expand into global markets
and to build a global supply chain.
- Provides new customers, new competitors and new suppliers; and shapes social,
technological and economic trends as well.
E.g. Starbucks.
Sales in UK and Germany were very good, however, sales in France were
disappointing. After 8 years, 63 Starbucks stores in France never turned a profit.
Sluggish (inactive) economy and Europe’s dept crisis hurt the sales. There were also
high labour and rent costs. Starbucks were slow to tailor the Starbucks experience
to suit the French Cafe environment.
- Starbucks is known for its ‘Grab and go’, making it convenient in countries like
the UK and Germany, however, in places like France, they are looking for a place
that offers, slow coffee, and a lounge to sit down. This was offered quite late
(Starbucks were slow to penetrate into French market).
Chinese case study
- One country contains approx. 20% of the population
- Economic growth of last year 6% (pre-covid) (this is huge) is lowest for 25 years.
UK was more or less 0 growth.
Globalisation:
• The extent to which trade and investments, information, social and cultural ideas,
and political cooperation flow between countries.
- Creates a borderless world for today’s managers
General Agreement on Tariffs and Trade (GATT), signed on October 30, 1947, by 23
countries, was a legal agreement minimizing barriers to international trade by
eliminating or reducing quotas, tariffs, and subsidies while preserving significant
regulations.
2
, Tuesday, 5 October 2021
International business environment
• International management is the management of business operations conducted
in more than one country.
- It took McDonald’s more than a year to realise that Hindus in India don’t eat beef
as they consider the cow sacred.
- When IKEA laughed a superstore in Bangkok, managers learned that some its
Swedish product names sound rude when pronounced in Thai.
- United Airlines handed out white carnation when it started flying to Hong Kong,
only to discover that to many Asians, such flowers represent death and bad luck.
2. Technological dimension
- Scientific and technological advancements in a specific industry.
- Helps drive competition and helps innovative companies to gain market share.
- Transforms consumer expectations in an entire industry.
One of the skills needed is to choose the right type or appropriate type of
technology for your business.
E.g. many book stores have gone out of business as they failed to adapt to
technological needs of consumers, which were provided my competitors like
amazon and google.
3. Sociocultural dimension
- Geographical distribution and population density, age, and education levels.
- Managers need to understand and address these characteristics in the
organisation’s business plans.
Nowadays (generally):
• The education level is high
• Information is exchanged faster hence consumers are better informed
• The number of people living in cities will increase
• Need for advanced technological applications to meet their needs
All these things, allow so much access to information + competition (e.g.
consumers can’t reach rating for restaurants, product, etc.) These all influence
future purchases.
3
