Contemporary Development in Business Management: Business Environments BY serrated Learning Outcomes Analyze business environments in terms of transformation systems and internal and external environments Identify the most relevant elements of the business environments using PESTLE analysis and Porter’s five forces model Discuss the classical, human relations and systems approaches to organizations Describe and compare the various structures that may be used within organizations.
The business as a transformation system Transformation Process: Businesses utilize the inputs in order to produce the outputs. Types of Environments A simple/static environment is the easiest to analyses. A detailed, systematic, historical analysis is probably sufficient in order to understand it. University of Cumberland Contemporary Developments In Business Management Unit 1: Introduction To The Business Environment In a dynamic environment, all aspects of the environment are subject to change.
When changes are rapid or sudden, such environments are referred to as turbulent. Complex environments are becoming more and more common in modern times. Technology, markets, politics, etc. Are becoming more difficult and more involved The Organization’s Environment PESTLE Factors PESTLE Analysts Political Economic Socio – Cultural Technological Environmental Legal Political Environment Government policy affects the whole economy and governments are responsible for enforcing and creating a stable framework in which businesses can operate in.
The quality of government policy is important in providing the right Physical infrastructure (transport etc), Social infrastructure (education, welfare net etc) and Market infrastructure (enforceable contracts) Businesses must forecast the likely impact of a change in the political environment.
Inter-country relationship/tattletales Government leadership Trading Policies Economic Environment Socio/Cultural Environment Technological Environment Technology refers to the equipment, technique or organization. It is concerned with the impact of technology on the market. Technology can increase total output and so contribute to overall economic growth through gains in productivity, reduced costs and new types of product Global Communication e. Amazon, Competing Technology developments Effect of technological change on Organizations: The type of products or services that are made and sold The way in which products are made (robots, new raw materials) The way in which services are provided The means and extent of communications with external clients e. G. E-mail, website CEO-Environmental Changing attitudes to the environment Energy consumption Waste disposal Legislation on environmental factors Green Marketing – is the marketing of products that are presumed to be environmentally safe.
It incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising Legal Environment Legal Factors affecting all Companies General legal framework: contract, – Basic ways of doing business, negligence proceedings Criminal Law – Theft, Insider trading, bribery, money laundering Company Law – Directors and their duties, insolvency, shareholder’s rights Employment Law – Trade Union recognition, minimum wage, unfair dismissal Health ; Safety – Safety procedures, fire precautions
Data Protection – Copyright laws Marketing ; Sales – Consumer laws, integrity in advertising Environment – Pollution control, waste disposal Tax law – Corporation Tax, VAT, PAYEE Competitive Regulations – Is the industry open or regulated? Porter’s Five Forces Analysis Approaches to Organizations The Classical Approach. The classical school of organization theorists comprises of those with the view that there is a single set of principles of organization which once discovered, would be the key to the best way of structuring all types of organization. Such principles would
Tort a selecting Oasis to management wanly all aspiring managers can learn Ana practice. This approach is referred to as the pursuit of the “Holy Grail” of organizational structure. Approaches to organizations The Classical Approach Henry Payola – Principles of Management: Division of Labor Coordination Span of Control Economies of Scale Objectives Authority Responsibility Specialization Definition of Tasks Unity of Effort Unity of Command Lynda Rick – 10 Principles of Organization: Job definition Correspondence Balance Continuity Scientific Management
Frederick Winslow Taylor was known as the ‘Father of Scientific Management’ He came up with the view that men were machines and formulated four goals for management: To hire workers scientifically Create co-operation between labor and management Train and educate workers Create a science for management He believed in a ‘pay for performance system’ but with his theory, he stifled the use of creativity.
His conclusions were: Increased productivity Profitability Efficiency Approaches to Organization Management Science Theory – Based on the ideas of scientific theory, it uses a alliterative approach to plan how the task and materials needed as well as people, who carry out the task can all be used to a maximum effect. Ones & George, 2007,up 68-AY) scarred Tour Transcends AT management silence: Quantitative management- used to identify resources needed.
Operations management- techniques used to analyze performance and ways of increasing efficiency. TTS- used to analyze inputs, processes & outputs to find ways of improving quality & efficiency MIS- used to supply or analyze info Is Management Still a Science? Http://hub. Org/1992/11 /is-management-still-a-science/ar/l David H. Freedman Harvard Business Review – As every manager knows, new technologies are transforming products, markets, business processes, and entire industries, transforming the business environment.
In the face of this more dynamic and volatile business world, the traditional mechanisms of “scientific management” seem not only less useful but positively counterproductive. And science itself appears less and less relevant to the practical concerns of managers. Approaches to Organizations Bureaucracy Structuralism Systems Approaches Organizational Structures Functional Divisional Product Based
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