1. Business Environment Ch. 3A Management A Practical Introduction
Angelo Kinicki &
Brian K. Williams

2. Learning objectives
Identify inside and outside stakeholders and describe their importance to an organization
Describe the general and task environments
Explain the influences of these environments
Recognize the diversity of workforce

3. 3.1 The Community Of Stakeholders Inside The Organization
WHAT ARE INTERNAL STAKEHOLDERS?
Stakeholders are people whose interests are affected by an organization’s activities
Internal stakeholders include employees, owners, and the board of directors
Lecture Note: Pick a well-known company and discuss how a given set of management decisions affects both internal and external stakeholders. Challenge students to identify the winners and losers of various types of decisions like a planned layoff, a price increase, or a decision to shift production to a low cost country.

4. 3.1 The Community Of Stakeholders Inside The Organization
Figure 3.1: The Organization’s Environment
Practical Action: “It’s a Career, Not a Job”: The Different Career Paths
Summary:
This Practical Action explores the need to know where you’re going– your career path. There are different career paths: the linear career where you climb the organization’s hierarchy, the steady state career where you stay put in your current position because you like it, and the spiral career where you have a number of jobs that are different, but build upon each other.

5. 3.1 The Community Of Stakeholders Inside The Organization
Today, forward-looking companies recognize that employees can be the most important resource in the organization, and that conflict between management and employees can be detrimental to everyone’s stake in the firm
Owners include all those who can claim an organization as their legal property
The goal of owners is to make a profit
A company’s board of directors is elected by stockholders to ensure the company is being run properly
The board of directors is responsible for helping to set strategic goals and approve major decisions and salaries for top management

6. 3.2 The Community Of Stakeholders Outside The Organization
WHAT ARE EXTERNAL STAKEHOLDERS?
External stakeholders are those people or groups in the organization’s external environment that are affected by it
The external environment consists of the task environment and the general environment

7. 3.2 The Community Of Stakeholders Outside The Organization
The task environment includes customers, competitors, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, special-interest groups, and mass media
Customers are those who pay to use an organization’s goods or services
Competitors are people or organizations that compete for customers or resources
A supplier is a person or organization that provides supplies (raw materials, services, equipment, labor, or energy) to other organizations

8. 3.2 The Community Of Stakeholders Outside The Organization
A distributor is a person or organization that helps another organization sell its goods and services to customers
Strategic allies describes the relationship between two organizations that join forces to achieve advantages neither can perform as well alone
Labor unions are usually associated with hourly employees and professional associations usually represent salaried workers
Local communities rely on companies for jobs, for tax revenues, for financial support, and so on

9. 3.2 The Community Of Stakeholders Outside The Organization
Start-ups often rely on credit cards to tide them over, and established companies rely on financial institutions like commercial banks, investment banks, and insurance companies
Government regulators are stakeholders because they are affected by organizations
Special interest groups are groups whose members try to influence specific issues
Mass media is a powerful disseminator of both positive and negative news about companies

10. 3.2 The Community Of Stakeholders Outside The Organization
The general environment or macroenvironment includes six forces: economic, technological, sociocultural, demographic, political-legal, and international
Economic forces consist of the general economic conditions and trends (unemployment, inflation, interest rates, economic growth) that can affect a firm’s performance
Technological forces are new developments in methods for transforming resources into goods or services
Sociocultural forces are influences and trends in a country’s, a society’s, or a culture’s human relationships and values that may affect an organization

11. 3.2 The Community Of Stakeholders Outside The Organization
Demographic forces are influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin
Political-legal forces are changes in the way politics shape laws and laws shape the opportunities for, and threats to, an organization
International forces are changes in the economic, political, legal, and technological global system that can affect an organization

12. 3.5 The New Diversified Workforce
WHAT DIVERSITY TRENDS SHOULD MANAGERS BE AWARE OF?
Diversity represents all the ways people are unlike and alike—the differences and similarities in age, gender, race, religion, ethnicity, sexual orientation, capabilities, and socioeconomic background
There are four layers of diversity: personality, internal dimensions, external dimensions, and organizational dimensions

13. 3.5 The New Diversified Workforce
Figure 3.2: The Diversity Wheel

14. 3.5 The New Diversified Workforce
Personality is at the center of the diversity wheel because it is the stable physical and mental characteristics responsible for a person’s identity
Internal dimensions of diversity are those human differences that exert a powerful, sustained effect throughout every stage of our lives
The personal characteristics that people acquire, discard, or modify throughout their lives are the external dimensions of diversity
A person’s management status, union affiliation, work location, seniority, work content, and divisions or department are all organizational dimensions of diversity

15. Key terms Special-interest groups Diversity Stakeholders
Strategic allies
Supplier
Sustainability
Task environment
Technological forces
Diversity
Economic forces
General environment
Internal stakeholders
Macroenvironment
Political-legal forces
Sociocultural forces
Social responsibility