1. MANAGEMENT AND SOCIETY
CHAPTER-Three(3)
MANAGEMENT AND SOCIETY

2. Physical Environment
Organizations are the products of physical environment in the main. The physical environment of business consists of two component- internal environment and external environment.

3. The Organization and Its Environments
Owners
Employees
Physical environment
Board of directors
Culture
Competitors
International
dimension
Political-
legal
Technological
Sociocultural
Economic
Regulators
Customers
Strategic
partners
Suppliers
Internal environment
Task environment
External environment
General environment

4. The Organization’s Environments
Internal environment: The internal environment consists mainly of the organization’s owner, board of directors, employee and culture. Internal environment are the conditions and forces within an organization. The controllable environment.
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5. The Internal Environment
Owner: someone who has legal property rights to a business.
Board of directors: governing body elected by a corporation’s stockholders and charged with overseeing the general management of the firm.
Employees: those employed by the organization.
Physical work environment: the firm’s facilities.
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6. External environment
External environment: everything outside an organization’s boundaries that might affect it. The uncontrollable environment.
General environment is a set of broad dimensions and forces in an organization’s surroundings that determine its overall context
Task environment is composed of specific groups and organizations that affect the firm.

7. The General Environment
Economic dimensions: The economic dimension of the general environment depends on the economic system of the country in which the organization functions. The important economic factors for business are inflation, interest rates and unemployment-all of which affect demand for different products.
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8. Technical dimensions: It refers to the methods available for converting resources into products or services. Socio-cultural dimensions: The socio-cultural dimension of the general environment is made up of the customs, mores, values, and demographics of the society in which the organization functions.

9. The General Environment
Political-Legal dimension: The political-legal dimension of the general environment refers to the government regulation of business and the general relationship between business and government.
International dimension: Virtually every organization is affected by the international dimension. It refers to the extent to which an organization is involved in or affected by business in other countries.
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10. Figure: McDonald’s General Environment
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11. The Task Environment
Competitors: an organization that competes with other organizations.
Customers: whoever pays money to acquire an organization’s products or services.
Suppliers: an organization that provides resources for other organizations.
Regulators: a unit that has the potential to control, legislate, or influence an organization’s policies and practices.
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12. Task Environments
Interest group: a group organized by its members to attempt to influence organizations.
Strategic allies/ partner: an organization working together with one or more organizations in a joint venture or other partnership.
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13. Figure: McDonald’s Task Environment

14. Organizational Culture
The set of values, beliefs, behaviors, customs, and attitudes that helps the members of the organization understand what it stands for, how it does things, and what it considers important.
Organizational culture is important for it determines the “feel” of the organization.
Its starting point is often the founder.
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15. Managing Organizational Culture
The manager must understand the current culture and then decide if it should be maintained or changed.
Managers must walk a fine line between maintaining a culture that still works effectively versus changing a culture that has become dysfunctional.
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16. Organizational Environment Relationships
Uncertainty: a driving force that influences many organizational decisions.
Competitive forces:
Threat of new competitive entrants.
Competitive rivalry.
Threat of substitute products.
The power of buyers.
The power of suppliers.
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17. How Organizations Adapt to Their Environments?
Each organization must asses its own unique situation then adapt according to the wisdom of senior management, for example:
Information systems.
Strategic responses.
Mergers ,takeovers, acquisitions, and alliances.
Organizational design and flexibility.
Direct influence on the environment.
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18. How Organizations Respond to Their Environments?
Information
management
General environment
Task environment
Mergers,
takeovers
acquisitions,
alliances
The
Organization
Social
responsibility
Direct
influence
Strategic
responses
Organization
design and
flexibility
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19. Managing Social Responsibility: Formal Organizational Dimensions
Legal Compliance
Extent to which the organization conforms to local, state, federal, and international laws.
Ethical Compliance
Extent to which members of the organization follow basic ethical/legal standards of behavior.
Philanthropic Giving
Awarding of funds or gifts to charities or other social programs.

20. Managing Social Responsibility: Informal Organizational Dimensions
Organizational Leadership and Culture
Leadership practices and the culture of the organization can help define the social responsibility stance an organization and its members will adopt.
Whistle Blowing
The organizational response to the disclosure by an employee of illegal or unethical conduct on the part of others within the organization is indicative of the organization’s stance on social responsibility.

21. How environment affects organizations?
a) Environmental change and complexity
b) Competitive forces
The threat of new entrants
Competitive rivelry
The threat of substitute products
The power of suppliers
c) Environmental turbulence

22. Environmental Turbulence
Terrorist attacks.
Workplace violence.
Computer viruses.
Such crises affect organizations in different ways.
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23. THANK YOU FOR ATTENDING THIS SESSION