Principles of Management Lecture 6 - Globalisation

• An organization that operates and competes in more than one country
• Uncertain and unpredictable

The set of specific and general forces that work together to integrate and connect economic, political, and social systems across countries, cultures, or geographical regions so that nations become increasingly interdependent.

General Environment
Wide-ranging global forces that affect an organization and its task environment, No direct control

• technological forces
• sociocultural forces
• demographic forces
• political and legal forces
• economic forces

Task Enviornment
Forces that affect an organization’s ability to obtain inputs and dispose of its outputs, Influence managers daily

• Competitors
• Distributors
• Customers
• Suppliers

Individuals and organizations that provide an organization with the input resources that it needs to produce goods and services

Raw materials, component parts, employees

Global outsourcing: The purchase or production of inputs or final products from overseas suppliers to lower costs and improve product quality or design

Organizations that help other organizations sell their goods or services to customers

Powerful distributors can limit access to markets through its control of customers in those markets

Retailers, online platforms, trading companies, etc

Individuals and groups that buy goods and services that an organization produces

A manager’s ability to identify an organization’s main customer groups offer them desired products is a crucial success factor

Organizations that produce goods and services that are similar to a particular organization’s goods and services

Rivalry between competitors is potentially the most threatening force that managers deal with

• Interest rates
• Inflation
• Unemployment
• Spending
• Investment
• Sentiment
• ...

Technology
The combination of skills and equipment that managers use in designing, producing, and distributing goods and services

Technological forces
Outcomes of changes in the technology that managers use to design, produce, or distribute goods and services

Pressures emanating from the social structure of a country or society or from the national culture

Social structure
The traditional system of relationships established between people and groups in a society

National culture
The set of values that a society considers important and the norms of behavior that are approved or sanctioned in that society

• Age
• Gender
• Ethnicity
• Race
• Social class
• Educational level
• ...

• Deregulation of industries
• Privatization
• Environmental protection

Individualism
A worldview that values individual freedom and self- expression and adherence to the principle that people should be judged by their individual achievements rather their social background

Collectivism
A worldview that values subordination of the individual to the goals of the group and adherence to the principle that people should be judged by their contribution to the group

Achievement orientation
A worldview valuing assertiveness, performance, success, and competition

Nurturing orientation
A worldview valuing the quality of life, warm personal friendships, and services and care for the weak

Long-term orientation
A worldview that values thrift and persistence in achieving goals

Short-term orientation
A worldview that values personal stability or happiness and living for the present

Degree to which societies accept the idea that inequalities in the power and well-being of their citizens are due to differences in individuals’ physical and intellectual capabilities and heritage.

Societies with high power distance tend to allow inequalities to persist or grow.

Opposite is the case in societies with low power distance (government uses taxation and social welfare programs to reduce inequality).

The degree to which societies are willing to tolerate uncertainty and risk.

Low uncertainty avoidance cultures are easygoing, value diversity, and tolerate differences in personal beliefs and actions.

High uncertainty avoidance societies are more rigid and expect high conformity in their citizens’ beliefs and norms of behavior.