Fundamentals of Management, 8th ed

Chapter 2: The Environments of Organizations and Managers

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because the cultures of the two firms were so different.

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To change culture, managers

must have a clear idea of what they want to create. When United and Continental

Airlines merged, top managers stressed that they wanted the new firm to personify

Continental’s employee-friendly culture and avoid the old United culture that was

fraught with hostility and mistrust between management and labor.

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SUMMARY OF LEARNING OUTCOMES AND KEY POINTS

1.

Discuss the nature of an organization’s environ-

ments, and identify and describe the components

of its general, task, and internal environments.

• Managers need to have a thorough under-

standing of the environment in which they

operate and compete. The general environment

consists of the economy, technology, and the

political–legal climate. The task environment

consists of competitors, customers, suppliers,

strategic partners, and regulators.

• The internal environment consists of the

organization’s owners, board of directors,

employees, physical environment, and culture.

Owners are those who have claims on the

property rights of the organization. The board of

directors, elected by stockholders, is responsible

for overseeing a firm’s top managers. Individual

employees are other important parts of the

internal environment. The physical environ-

ment, yet another part of the internal environ-

ment, varies greatly across organizations.

2.

Describe the ethical and social environment

of management, including individual ethics, the

concept of social responsibility, and how

organizations can manage social responsibility.

• The ethical and social environment of

management is also quite important. Under-

standing the differences between ethical and

unethical behavior, as well as appreciating the

special nature of managerial ethics, can help

guide effective decision making. Understanding

the meaning of and arguments for and against

social responsibility can help a manager

effectively address both the formal and informal

dimensions of social responsibility.

3.

Discuss the international environment of man-

agement, including trends in international

business, levels of international business activities,

and the context of international business.

• The international environment of management

can be a crucial one. Current trends have

resulted in the increasing globalization of mar-

kets, industries, and businesses. Organizations

seeking to become more international can rely

on importing, exporting, licensing (including

franchising), strategic alliances, and direct

investment to do so. National culture, controls

on international trade, economic communities,

and the WTO combine to determine the

context of international business.

4.

Describe the importance and determinants of an

organization’s culture, as well as how organiza-

tional culture can be managed.

• Organizational culture is the set of values, beliefs,

behaviors, customs, and attitudes that helps the

organization’s members understand what it

stands for, how it does things, and what it

considers important. Organizational culture is an

important environmental concern for managers.

Managers must understand that culture is a key

determinant of how well their organization will

perform. Culture can be assessed and managed

in a number of different ways.

DISCUSSION QUESTIONS