Chapter 3: The

Changing
Environment of
MGT 210
Management
Section17&18

Managerial Environment

Social Environment
Political-Legal Environment
Economic Environment
Technological Environment

Social Environment

Constant struggle between the forces of

stability x Change = Society.
Basic Characteristics of social environment:

Keeps on changing.
Very dynamic
Constant struggle

Dimensions of social
environment

4 important dimensions of social

environment:

Demographics of the New Workforce

New Social Contract Between Employer and
Employee.
Nagging Inequalities in the Workplace.
Managing Diversity

Demographics of the New

Workplace

New Changes:

Workforce is getting larger.

Increasing work opportunity for females.
Racial and ethnical diversity is increasing.
Workforce is getting older.

Demographics of the New

Workplace(Cont.)

Myths About Older Workers

Are less productive.

Incur higher benefits costs.
Have higher absenteeism.
Tend to have more accidents at work.
Are less willing to learn.
Are inflexible about the hours they are willing to
work.

New Social Contract Between

Employer and employee

New Social Contract

Old idea of lifetime employment with one

employer has gone.
Assumption that employer-employee relationship
will be a shorter-term one based on convenience
and mutual benefit, rather than for life.

Employees are expected to manage their own careers to

increase their long-term value.
Employers are expected to provide the necessary
means for continual workforce development .

Nagging Inequalities in the

Workplace

Under the Glass Ceiling

The transparent but

strong barrier keeping
women and minorities
from moving up the
management ladder.
Women are demanding
more equitable
compensation and
workplace opportunities.

Nagging Inequalities in the

Workplace

Continuing Pressure for

Equal Opportunity

Women, minorities, and

the physically challenged
are all expected to press
harder for more
employment
opportunities.

Managing Diversity

Managing Diversity

The process of creating an organizational culture

that provides all employees; including women and
minorities, with assistance and opportunities to
help them realize their full potential.

More than EEO

The moral necessity and commitment in going

beyond EEO and affirmative action to create
flexible organizations that encompass and value
diversity. Example- understanding different
employees from different perspective.

The Political-Legal
Environment

The Politicization of Management

Issues management

Ongoing process of identifying, evaluating, and responding to

important social and political issues.
Purposes: minimize surprises and make more systematic
and effective responses to issues.

The Political-Legal
Environment

The Politicization of Management

Issues management

Ongoing process of identifying, evaluating, and responding to

important social and political issues.
Purposes: minimize surprises and make more systematic
and effective responses to issues.

General political responses

Reactive Approach
Neutral Approach
Proactive Approach

Managements Political
Response Continuum

The Political-Legal
Environment

Specific Political Strategies

Campaign financing

Lobbying

Most popular and successful strategy.

Includes formal presentations between managers and
legislators.

Coalition building

Financing preferred political campaigns or individual

candidates.

Building coalition with special interest groups.

Indirect lobbying

Advocacy advertising: Promoting a point of view along with a

product or service which is appreciated by the legislators.

The Economic Environment

Management and economy is closely related.

Three aspects of economic environment of
management:

Jobs
Business Cycle
Global Economy

The Economic Environment

Jobs

Education is essential in getting a highly paid job.

Top 20 highly paid occupations require at least a widely
recognized bachelor degree.

Business Cycle

The up and down movement of an economys ability to

generate wealth.
Business cycles are converging worldwide.

The Economic Environment

Cycle-sensitive decisions

Timed decision about appropriate responses to

changes in the business cycle is necessary for:

reducing the chances that a firms assets and resources

will be underutilized or wasted in economic downturns.
taking advantage of opportunities that will arise during
periods of rapid expansion of the economy.

Business Cycles Affect

Managerial Decisions

The Technological
Environment

Technology

All the tools and ideas available for extending the

natural and mental reach of humankind.
Technology is facilitating the evolution of the
information age.
Information has become a valuable strategic
resource for gaining competitive advantage.

The Technological

The Innovation Process

Environment

The systematic and practical application of a new

idea.

Steps in the Innovation Process

Conceptualization: when a new idea occurs to

someone.
Product technology: creation of a working
prototype.
Production technology: development of a
profitable production process.

The Three-Step Innovation

Process

The Technological
Environment

Innovation Lag

The time it takes for a new product to be translated

into satisfied demand.

Shortening Innovation Lag

Goal setting: creating a sense of urgency and

purpose.
Empowerment: pushing decision-making
authority down to the level of the decision.
Concurrent engineering: using a team approach
to product design involving specialists from all
functional areas including research, production,
and marketing.

Promoting Innovation
Through Intrapreneurship

Intrapreneur

An employee who takes personal responsibility for

pushing an innovative idea through a large
organization. example: Rahimafrooz.

Fostering Intrapreneurship

Focus on results of teamwork.

Reward innovation and risk taking.
Tolerate and learn mistakes.
Remain flexible and change-oriented.

Thank You All!