Chapter 3
Environmental Forces
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
3.1
Learning Objectives
After reading this chapter, you should be able to:
 Describe how economic and cultural factors influence
organizations
 Identify the five competitive forces that affect organizations in an
industry
 Describe the principal political and legal strategies used by
managers to cope with changes in the environment
 Explain how technological changes influence the structure of
industries
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
3.2
The General Environment and Environmental Forces Affecting
Organizations
The General Environment
Cultural Forces
Political - Legal Forces
Technological Forces
Competitive Forces
Organization
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
Adapted from Figure 3.1
3.3
Environmentally Conscious Business Practices







Avoid confrontation with state and federal
pollution control agencies
Compensate for environmentally risky
endeavors
Comply early with government regulations
Cut back on environmentally unsafe
operations
Promote new manufacturing technologies
Recycle wastes
Management action plans
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
3.4
Value System

Multiple beliefs that are compatible and supportive
of one another

Greatly affect how a manager:
•
Views other people/groups, thus influencing
interpersonal relationships
•
Perceives situations and problems
•
Goes about solving problems
•
Determines what is and is not ethical behavior
•
Leads and controls employees
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
3.5
Hofstede’s Framework

Power Distance
•

Uncertainty Avoidance
•

Degree to which influence/control are unequally distributed
among individuals within a particular culture
Degree to which members of a society attempt
to avoid ambiguity, risk, and indefiniteness
of future
Individualism
•
•
Extent to which society expects people to take
care of themselves and their immediate families
The degree to which individuals believe
they are masters of their own destiny
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
3.6
Hofstede’s Framework (cont.)

Collectivism
•

Measures tendency of group members to focus on the
common welfare and feel loyalty toward one another
Masculinity
•
Degree to which acquisition of money
and material things is valued and high
quality of life is not

Confucian dynamism
•
•
•
Stability of society is based on unequal relationships
Family is the prototype of all organizations
People should treat others as they would like to be
treated
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
3.7
Relative Ranking of Four Countries on Cultural Values
R
a
n
k
i
n
g
o
u
t
50
40
30
o
f
5
0
c
o
u
n
t
r
i
e
s
20
10
Power
Distance
Uncertainty
Avoidance
Rank Numbers:
1 = Highest; 50 = Lowest
Individualism
Masculinity
Cultural Value
Dimension
Confucian
Dynamics
Source: Adapted from G. Hofstede and M. H. Bond. The Confucius connection:
From cultural roots to economic growth. Organization Dynamics, Spring 1988, pp. 12-13
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
Adapted from Figure 3.2
3.8
Competitive Forces in the Task Environment
Threat
of new
competitors
Suppliers
bargaining
power
Rivalry among
existing firms
in industry
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
Buyers
bargaining
power
Threat of
substitute
goods/services
Adapted from Figure 3.3
3.9
Managerial Political Strategies
Political Strategies
•
Negotiation
•
Lobbying
•
Political-Legal Forces
•
Political action
committees (PACs)
Alliance
•
Laws
•
Representation
•
Government
•
Socialization
•
Labor unions
•
Others
Hellriegel, Jackson, and Slocum
MANAGEMENT: A Competency-Based Approach
South-Western College Publishing
Copyright © 2002
Adapted from Figure 3.4