Meeting
1
Organizational Environment,
Management and Manager
Ragil Sriharto
FEB UGM
Building Blocks
Organization
Stakeholder
Organization
Functions/Facets
Organization
Environment
Typical Organization
Stakeholders
Primary Stakeholders
Owners
Customers
Employees (and their unions if the firm is unionized)
Secondary Stakeholders
- Suppliers
- Community
- The natural environment
operates
- Other businesses
- Special interest groups
- Society
- Former employees
- Unions
- The industry in which the firm
- Government
- The media
Business Facets
n
To achieve organization objectives, person and/or
organization needs:
n To manage all business environments
n Managerial Skill
n
n
n
n
Management
Marketing
Finance
Operation
To be socially responsible and ethical
n To be legally complied
n
ORGANIZATION ENVIRONMENT
Organization Environment
Social Change
Demography
Environment
Law/Regulation
Economic
Organisasi
?
Technology
Change in the nature
of industry
Competition
Globalization
Economic Environment
n Economic
System
n Communism
n Socialism
n Capitalism
n Mixed
n The
economy
nature of competition
n Pure
competition
n Monopolistic competition
n Oligopoly
n Monopoly
Comparison of Communism,
Socialism, and Capitalism
The Nature of Competition
Four Competitive Environments
Pure Competition
Many small businesses sell one standardized
product.
Monopolistic
Competition
There are fewer businesses than in a pure
competition system, and the differences between
the goods they sell are small.
Oligopoly
Very few businesses sell a product; each business
supplies a large portion of the products sold in the
marketplace.
Monopoly
There is only one producer of a product in a given
market.
Economic Environment (cont d)
n Economic
cycles
n Expansion
n Contraction
n Measuring
n GDP
economy
- GNP
n Unemployment rate
n Interest rate
n Foreign exchange rate
n Inflation
Non-Economic Environment
n Legal
Aspect
n Technology
n Social Politics
n Natural Environment
n Competition
n Globalization
n Demography
Example
Example
Example:
Demografi
Example: Japan Demography
Japan s Changing Demography (The
Economist, July 28th 2007)
n Population over 65, after WW II = 5%
n Population over 65, now = 20% = 25 M
n Population over 65, 2015 = 30% = 35 M
n Life Expectancy, after WW II = 50+
n Life Expectancy, now = 82
n Now, people age 20s = 16 M, next ten
years it is predicted to be only 3 M
Example: Japan Demography
Example: Demography (cont d)
How they affect business?
n Workforce no longer available
n Increase
pension age
n Encourage more women to work
n Importing
n Increasing
cost?
n Pension
plan
n Special treatment and equipment
n Different
business opportunity
Old Business Environment
New Business Environment
Environmental Forces are
Driving Dramatic Changes
Characteristic
•Hypercompetitive Market
•Blurring of industry boundaries
Environme
ntal Forces
New
Competitive
Landscape
•Extreme emphasis on customer
values
•New rules of the game
•Global and competence based
competition
Key
Determinants
Driving
Forces
Basic
strategic
issue
•New competitive requirements:
strategic flexibility and
continuous learning
•Changing career dynamics and
employee expectations
MANAGEMENT
What is Management?
The planning, organizing, leading, and controlling of
human and other resources to achieve
organizational goals effectively and efficiently
Organizational Performance
A measure of how efficiently and effectively managers
are using organizational resources to satisfy
customers and achieve goals
Organizational Performance
Efficiency
A measure of how well or productively resources are
used to achieve a goal
Effectiveness
A measure of the appropriateness of the goals an
organization is pursuing and the degree to which they
are achieved.
Managerial Functions
Managers at all levels in all organizations perform
each of the functions of planning, organizing,
leading, and controlling
n Henri Fayol outlined the four managerial functions in
his book General Industrial Management
n
Four Functions of Management
1-34
Figure 1.2
Planning
Process of identifying and selecting
appropriate
goals and
courses of
action
1-35
Steps in the Planning Process
n
n
n
Deciding which goals to pursue
Deciding what courses of action to adopt
Deciding how to allocate resources
1-36
Organizing
Process of establishing a structure of working
relationships in a way that allows organizational
members to work together to achieve organizational
goals
1-37
Organizational Structure
A formal system of task and reporting relationships
that coordinates and motivates organizational
members
1-38
Leading
Articulating a clear vision to follow, and energizing and
enabling organizational members so they
understand the part they play in attaining
organizational goals
1-39
Leading
n
n
Leadership involves using power, influence, vision,
persuasion, and communication skills
Outcome of leadership is highly motivated and
committed organizational members
1-40
Controlling
n
Evaluating how well an organization is achieving its
goals and taking action to maintain or improve
performance
The outcome of the control process is the ability to
measure performance accurately and regulate
efficiency and effectiveness
1-41
MANAGER
Managers
Managers –
The people responsible for supervising the use of an
organization s resources to meet its goals
Resources include people, skills, knowledge,
machinery,
computers and IT,
and financial capital
1-43
Levels of Management
Top Managers
§
President
§
Chief Executive Officer (CEO)
§
Chief Financial Officer (CFO)
§
Chief Operations Officer (COO)
Middle Management
§
§
§
Responsible for tactical planning
Implement general guidelines established by top
management
Responsibility is more narrowly focused than top
managers
First Line Management
§
Supervise workers
§
Oversee daily operations
§
Directing and controlling
are primary functions
Importance of Management Functions to Managers in Each
Level
70
60
50
Planning
Organizing
Staffing
Directing
Controlling
40
30
20
10
0
Top Managers Middle Managers
First-Lie Managers
Relative Amount of Time That Managers Spend
on the Four Managerial Functions
Traits Needed by Managers
Extraversion – tendency to experience positive
emotions and moods and feel good about oneself
and the rest of the world
Managers high in extraversion tend to be
sociable, affectionate, outgoing and
friendly
Managers low in extraversion tend to be
less inclined toward social interaction and
have a less positive outlook
Traits Needed by Managers
Negative affectivity – tendency to experience negative
emotions and moods, feel distressed, and be critical of
oneself and others
Traits Needed by Managers
Agreeableness – tendency to get along well with
others
Managers high in agreeableness are
likable, affectionate and care about others
Managers with low agreeableness may be
distrustful, unsympathetic, uncooperative
and antagonistic
Traits Needed by Managers
Conscientiousness – tendency to be careful,
scrupulous, and persevering
Managers high in this trait are organized
and self-disciplined
Managers low in this trait lack direction
and self-discipline
Traits Needed by Managers
Openness to Experience – tendency to be original, have
broad interests, be open to a wide range of stimuli, be
daring and take risks
Other Personality Traits
Internal locus of control
§ Belief that you are responsible for your own fate
§ Own actions and behaviors are major and
decisive determinants of job outcomes
Other Personality Traits
External locus of control
§ Believe that outside forces are responsible for what
happens to and around them
§ Do not think their own actions make much of a
difference
Other Personality Traits
Self-Esteem
n
The degree to which people feel good about themselves
and their abilities
n
n
High self-esteem causes a person to feel competent, and
capable.
Persons with low self-esteem have poor opinions of
themselves and their abilities.
Other Personality Traits
Need for Achievement
n
The extent to which an individual has a strong desire to
perform challenging tasks well and meet personal
standards for excellence
Other Personality Traits
Need for Affiliation
n
The extent to which an individual is concerned about
establishing and maintaining good interpersonal
relations, being liked, and having other people get
along
Need for Power
n
The extent to which an individual desires to control or
influence others
Skills Needed by Managers
§
Leadership
§
Technical expertise
§
Conceptual skills
§
Analytical skills
§
Human relations skills
Skilled Needed by Managers
n Leadership
:
the ability to influence
employees to work
toward organizational
goals
Types of Leaders
Autocratic Leaders
§Decision
makers, “tell” employees what to do
Democratic Leaders
§Involve
employees in decisions
Free-Rein leaders
§Employees
work with minimal interference
Technical Expertise
§
§
Technical expertise : the specialize knowledge
and training needed to perform jobs that are
related to particular areas of management
Computer expertise is a skill for nearly all
managers
Conceptual Skills
§
§
Conceptual skills : the ability to think in abstract
terms and to see how parts fit together to form the
whole
The ability to think creatively
ü
Needed by all managers
ü
Especially important for top managers
Analytical Skills
n
§
§
Analytical skills : the ability to identify relevant
issue, recognize, their importance, understand the
relationships between them, and perceive the
underlying causes of a situation
Most important to top-level managers
Required in complex situations where the solution
is unclear
Human Relations Skills
n
§
Human relation skills : the ability to deal with
people, both inside and outside the organization
Managers with good HR skills are generally more
successful
Skill Types Needed
The Reality of Management
Not a cut-and-dried process
§Managers
ü
Establishing and updating an agenda
ü
ü
A calendar that covers short-term goals and long-term objectives
Networking
ü
ü
spend a lot of time:
Building relationships and sharing information with colleagues who
can help managers achieve the items on their agendas
Confronting the complex challenges of todayʼs business world