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With fast development in business field, management environments are becoming more diverse and multifaceted. Global Organizations are those which operate and compete in more than one country. These are uncertain and unpredictable. The global environment of such companies is a set of forces and conditions exterior of the organization's boundaries that affects the way it operates and shapes its behaviour. These forces alter over time and therefore present global managers have to get many opportunities as well as threats.
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To recognize opportunities or threats due to global environmental forces, it is necessary that managers must differentiate between the task environment and the more surrounding general environment. The task environment is the set of forces and conditions that affect an organization's ability to obtain inputs and dispose of its outputs. It consists of the organization's suppliers, customers, distributors, and competitors, and has the most immediate and direct effect on managers. Suppliers are individuals and organizations that provide an organization with the input resources that it needs to produce goods and services such as raw materials, component parts, and employees. In global environment, relationships with suppliers can be complicated due to materials shortages, unions, and lack of substitutes. Suppliers who are the only source of a critical item are in a strong bargaining position to raise their prices. Managers can reduce these supplier effects by increasing the number of suppliers of an input. Another element of task environment is distributors. These are 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 that market. Customers purchase the goods and services that an organization produces. Identifying an organization's main customers and producing the goods and services they want is vital to organizational and managerial victory. Competitors also affect the global environment of firms. Competitors manufacture goods and services that are comparable to a particular organization's merchandise and services. Strong competitive enmity results in price competition, and falling prices reduce access to resources and lower profits.
The general environment includes the wide-ranging economic, technological, socio-cultural, demographic, political and legal, and global forces that affect the organization and its task environment. Economic Forces include interest rates, inflation, unemployment, economic expansion and other factors that affect the general health and well-being of a nation or the regional economy of an organization. Technological Forces that affect global environment are outcomes of changes in the technology that managers use to design, produce, or distribute goods and services. Sociocultural Forces are pressures emanating from the social structure of a country or society or from the national culture. Demographic Forces are result of change in, or changing attitudes toward, the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class. Most developed nations are experiencing the aging of their populations. Political and Legal Forces are outcomes of changes in laws and regulations, such as the deregulation of industries, the privatisation of organizations, and increased emphasis on environmental protection.
Forces and factors in global environment
It can be established that organizations must create a global framework for environmental management and set targets and geographically implement action plans in all areas of its activity, from production and technical development, manufacturing, marketing and sales to other divisions. To perform its global environmental management, company must adopt an organizational approach linking its various functions and regions.
To summarize, area of global companies includes its goods and services and its customers. Companies must cope up with forces in the specific and general environments. Specific environmental forces comprises of outside stakeholder groups that directly impact the ability to obtain resources like customers, distributors, unions, the government, competitors, and suppliers. General environmental forces are economic, international, technological, demographic and cultural, political, and environmental forces. Complexity, dynamism, and richness determine the extent of environmental uncertainty. A simple, steady and affluent environment has some ambiguity, but a multifaceted, dynamic, poor environment is highly uncertain. Management researchers stated that the global marketplace create uncertain environment.
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Productivity 101Inputs are any resources used to create goods and services.
Examples of inputs include labor [workers’ time], fuel, materials, buildings, and equipment.
Click for exampleLabor input is the time people spend working to produce goods and services.
Capital is the property used by businesses to produce goods and services. It includes both physical assets and intellectual property.
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Material inputs are goods that are used in making other products.¦ They include both raw materials and manufactured products.
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Energy is the fuels and electricity needed to produce goods and services.
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Term | Definition an organization that operates and competes in more than one country |
Term | Definition the set of global forces and conditions that operate beyond an organization's boundaries but affect a manager's ability to acquire and utilize resources |
Term | Definition the set of forces and conditions that originate with suppliers, distributors, customers, and competitors and affect an organization's ability to obtain inputs and dispose of its outputs because they influence managers on a daily basis |
Term | Definition the wide-ranging global, economic, technological, sociocultural, demographic, political, and legal forces that affect an organization and its task environment |
Term | Definition individuals and organizations that provide an organization with the input resources that it needs to produce goods and services |
Term | Definition the purchase of inputs from overseas suppliers or the production of inputs abroad to lower production costs and improved product quality or design |
Term | Definition organizations that help other organizations sell their goods or services to customers |
Term | Definition individuals and groups that buy the goods and services that an organization produces |
Term | Definition organizations that produce goods and services that are similar to a particular organization's goods and services |
Term | Definition organizations that presently are not in a task environment but could enter if they so choose |
Term | Definition factors that make it difficult and costly for an organization to enter a particular task environment or industry |
Term | Definition cost advantages associated with large operations |
Term | Definition customers' preference for the products of organizations currently existing in the task environment |
Term | Definition interest rates, inflation, unemployment, economic growth, and other factors that affect the general health and well-being of a nation or the regional economy of an organization |
Term | Definition the combination of skills and equipment that managers use in the design, production, and distribution of goods and services |
Term | Definition outcomes of changes in the technology that managers use to design, produce, or distribute goods and services |
Term | Definition pressures emanating from the social structure of a country or society or from the national culture |
Term | Definition the arrangement of relationships between individuals and groups in a society |
Term | Definition the set of values that a society considers important and the norms of behavior that are approved or sanctioned in that society |
Term | Definition outcomes of changes in, or changing attitudes toward, the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class |
Term Political and Legal Forces | Definition outcomes of changes in laws and regulations, such as the deregulation of industries, the privatization of organizations, and the increased emphasis on environmental protection |
Term | Definition 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 and similar |
Term | Definition a tax that a government imposes on imported or, occasionally, exported goods |
Term | Definition the idea that if each country specializes in the production of the goods and services that it can produce most efficiently, this will make the best use of global resources |
Term | Definition ideas about what a society believes to be good, right, desirable, or beautiful |
Term | Definition unwritten, informal codes of conduct that prescribe how people should act in particular situations and are considered important by most members of a group or organization |
Term | Definition the routine social conventions of everyday life |
Term | Definition norms that are considered to be central to the functioning of society and to social life |
Term | Definition a worldview that values individual freedom and self-expression and adherence to the principle that people should be judged by their individual achievements rather than by their social background |
Term | Definition 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 |
Term | Definition the 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 |
Term | Definition a worldview that values assertiveness, performance, success, and competition |
Term | Definition a worldview that values the quality of life, warm personal friendships, and services and care for the weak |
Term | Definition the degree to which societies are willing to tolerate uncertainty and risk |
Term | Definition a worldview that values thrift and persistence in achieving goals |
Term | Definition a worldview that values personal stability or happiness and living for the present |
Term | Definition Identifying and selecting appropriate goals and course of action; one of the four principal tasks of management |
Term | Definition a cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals |
Term | Definition a broad declaration of an organization's purpose that identifies the organization's products and customers and distinguishes the organization from its competitors |
Term | Definition top management's decisions pertaining to the organization's mission, overall strategy, and structure |
Term | Definition a plan that indicates in which industries and national markets an organization intends to compete |
Term | Definition divisional managers' decisions pertaining to divisions' long-term goals, overall strategy, and structure |
Term | Definition a plan that indicates how a division intends to compete against its rivals in an industry |
Term | Definition functional managers' decisions pertaining to the goals that they propose to pursue to help the division attain its business-level goals |
Term Functional-Level Strategy | Definition a plan of action to improve the ability of each of an organization's functions to perform its task-specific activities in ways that add value to an organization's goods and services |
Term | Definition the intended duration of a plan |
Term | Definition the ability of the CEO and top managers to convey a compelling vision of what they want the organization to achieve to their subordinates |
Term | Definition the development of a set of corporate-, business-, and functional-level strategies that allow an organization to accomplish its mission and achieve its goals |
Term | Definition a planning exercise in which managers identify organizational strengths [S] and weaknesses [W] and environmental opportunities [O] and threats [T] |
Term | Definition permanent, ongoing, intense competition brought about in an industry by advancing technology or changing customer tastes |
Term | Definition driving the organization's costs down below the costs of its rivals |
Term | Definition distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service |
Term Focused Low-Cost Strategy | Definition serving only one segment of the overall market and trying to be the lowest cost organization serving that segment |
Term Focused Differentiation Strategy | Definition serving only one segment of the overall market and trying to be the most differentiated organization serving that segment |
Term Concentration On A Single Industry | Definition reinvesting a company's profits to strengthen its competitive position in its current industry |
Term | Definition expanding a company's operations either backward into an industry that produces inputs for its products or forward into an industry that uses, distributes, or sells its products |
Term | Definition expanding a company's business operations into a new industry in order to produce new kinds of valuable goods or services |
Term | Definition entering a new business or industry to create a competitive advantage in one or more of an organization's existing divisions or businesses |
Term | Definition performance gains that result when individuals and departments coordinate their actions |
Term Unrelated Diversification | Definition entering a new industry or buying a company in a new industry that is not related in any way to an organization's current businesses or industries |
Term | Definition selling the same standardized product and using the same basic marketing approach in each national market |
Term | Definition customizing products and marketing strategies to specific national conditions |
Term | Definition making products at home and selling them abroad |
Term | Definition selling products at home that are made abroad |
Term | Definition allowing a foreign organization to take-charge of manufacturing and distributing a product in its country or world region in return for a negotiated fee |
Term | Definition selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits |
Term | Definition an agreement in which managers pool or share their organization's resources and know-how with a foreign company, and the two organizations share the rewards and risks of starting a new venture |
Term | Definition a strategic alliance among two or more companies that agree to jointly establish and share the ownership of a new business |
Term Wholly Owned Foreign Subsidiary | Definition production operations established in a foreign country independent of any local direct involvement |
Term | Definition a formal system of task and reporting relationships that coordinates and motivates organizational members so that they work together to achieve organizational goals |
Term | Definition the process by which managers make specific organizing choices that result in a particular kind of organizational structure |
Term | Definition the process by which managers decide how to divide tasks into specific jobs |
Term | Definition the process of reducing the number of tasks that each worker performs |
Term | Definition increasing the number of different tasks in a given job by changing the division of labor |
Term | Definition increasing the degree of responsibility a worker has over his or her job |
Term | Definition an organizational structure composed of all the departments that an organization requires to produce its goods or services |
Term | Definition an organizational structure composed of separate business units within which are the functions that work together to produce a specific product for a specific customer |
Term | Definition an organizational structure in which each product line or business is handled by a self-contained division |
Term | Definition an organizational structure in which each region of a country or area of the world is served by a self-contained division |
Term | Definition an organizational structure in which each kind of customer is served by a self-contained division; also called customer structure |
Term | Definition an organizational structure that simultaneously groups people and resources by function and by product |
Term | Definition an organizational structure in which employees are permanently assigned to a cross-functional team and report only to the product team manager or to one of his or her direct subordinates |
Term | Definition a group of managers brought together from different departments to perform organizational tasks |
Term | Definition the structure of a large organization that has many divisions and simultaneously uses many different organizational structures |
Term | Definition the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources |
Term | Definition an organization's chain of command, specifying the relative authority of each manager |
Term | Definition the number of subordinates who report directly to a manager |
Term | Definition someone in the direct line or chain of command who has formal authority over people and resources at lower levels |
Term | Definition someone responsible for managing a specialist function, such as finance or marketing |
Term | Definition giving lower-level managers and non managerial employees the right to make important decisions about how to use organizational resources |
Term | Definition organizing tools that managers can use to increase communication and coordination among functions and divisions |
Term | Definition a committee of managers from various functions or divisions who meet to solve a specific, mutual problem; also called ad hoc committee |
Term | Definition an agreement in which managers pool or share their organization's resources and know-how with a foreign company and the two organizations share the rewards and risks of starting a new venture |
Term | Definition a series of strategic alliances that an organization created with suppliers, manufacturers, and/or distributors to produce and market a product |
Term | Definition to use outside suppliers and manufacturers to produce goods and services |
Term Boundaryless Organization | Definition an organization whose members are linked by computers, faxes, computer-aided design systems, and video teleconferencing and who rarely, if ever, see one another face-to-face |
Term Knowledge Management System | Definition a company-specific virtual information system that allows workers to share their knowledge and expertise and find others to help solve ongoing problems |
Term Business-to-Business [B2B] Network | Definition a group of organizations that join together and use IT to link themselves to potential global suppliers to increase efficiency and effectiveness |
Term | Definition formal target-setting, monitoring, evaluation, and feedback systems that provide managers with information about how well the organization's strategy and structure are working |
Term | Definition control that allows managers to anticipate problems before they arise |
Term | Definition control that gives managers immediate feedback on how efficiently inputs are being transformed into outputs so that managers can correct problems as they arise |
Term | Definition control that gives managers information about customers' reactions to goods and services so that corrective action can be taken if necessary |
Term | Definition a budget that states how managers intend to use organizational resources to achieve organizational goals |
Term Management By Objectives [MBO] | Definition a goal-setting process in which a manager and each of his or her subordinates negotiate specific goals and objectives for the subordinate to achieve and then periodically evaluate the extent to which the subordinate is achieving those goals |
Term | Definition control of behavior by means of a comprehensive system of rules and standard operating procedures |
Term | Definition the set of values, norms, standards of behavior, and common expectations that controls the ways in which individuals and groups in an organization interact with one another and work to achieve organizational goals |
Term | Definition the control exerted on individuals and groups in an organization by shared values, norms, standards of behavior, and expectations |
Term | Definition the movement of an organization away from its present stae and toward some desired future state to increase its efficiency and effectiveness |
Term | Definition a fast, revolutionary approach to change in which top managers identify what needs to be changed and then move quickly to implement the changes throughout the organization |
Term | Definition a gradual or evolutionary approach to change in which managers at all levels work together to develop a detailed plan for change |
Term | Definition the process of comparing one company's performance on specific dimensions with the performance of other, high-performing organizations |
Term | Definition people who notice opportunities and take responsibility for mobilizing the resources necessary to produce new and improved goods and services |
Term | Definition employees of existing organizations who notice opportunities for product or service improvements and are responsible for managing the development process |
Term | Definition the mobilization of resources to take advantage of an opportunity to provide customers with new or improved goods and services |
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