Night 2 – Tuesday October 5, 2010 Systems Model and Organization Mission and Environment
Major Components of an Organizational System • Inputs • Processes • Outputs or Outcomes • Feedback
Elements of an Open System • Inputs (or resources) • Outputs • Technology • Environment • Purposes • Behavior and processes • Culture • Structure
Organization as an Open System PurposesCulture Behavior and Processes Technology Structure Environment INPUTS Environment OUTPUTS
Weisbord’s Six-Box Model 1. PURPOSES What “Business” are we in? 2. STRUCTURE How do we divide up the work? 3. RELATIONSHIPS How do we manage conflict (coordinate) among people? With our technologies? 5. LEADERSHIP Is someone keeping the boxes in balance? 4. REWARDS Is there an incentive for doing all that needs doing? 6. HELPFUL MECHANISMS Have we adequate coordinating technologies?
Mission: Broad vs. Narrow • Broad Definition • Furniture • Telecommunications • Beverages • Global mail delivery • Travel & tourism • Narrow Definition • Wrought-iron lawn furniture • Long-distance telephone service • Soft drinks • Overnight package delivery • Caribbean cruises
External Environments • Mega Environment • Technological environment • Economic environment • Legal-Political environment • Sociocultural environment • International environment • Task Environment • Customers/Clients • Competitors • Suppliers • Labor Supply • Government
The Technological Environment • The technological environment represents the application of knowledge in science, inventions, and innovations to marketing. • Applying technology helps Fidelity improve customer service
Economic Environment • Inflation: The devaluation of money by reducing what it can buy through persistent price increases. • Deflation: Falling prices, better? • Unemployment • Discretionary Income
The Legal-Political Environment • The Political Environment • Includes laws, governmental agencies, and pressure groups that impact organizations and individuals.
The Legal-Political Environment • The Political Environment • Key trends include: • Increased legislation to protect businesses as well as consumers. • Changes in governmental agency enforcement. • Increased emphasis on ethical behavior and social responsibility.
The Sociocultural Environment • The Cultural Environment • Is composed of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors.
The Sociocultural Environment • Core beliefs are persistent • Passed from parents to children; reinforced by society • Shape attitudes and behavior • Secondary cultural values change and shift more easily • Society’s cultural values are expressed through people’s views of: • Themselves • Others • Organizations • Society • Nature • The Universe The Cultural Environment
The International Environment • Globalization • Anti-Globalization • Tariffs • Free Trade Agreements • Currency Fluctuations
The Competitive Environment The Economy at Large Legislation and Regulation Technology Suppliers Substitutes COMPANY Rival Firms Buyers New Entrants Societal Values and Lifestyles Population Demographics IMMEDIATE INDUSTRY AND COMPETITIVE ENVIRONMENT
Five ForcesModel of Competition Substitute Products (of firms in other industries) Suppliers of Key Inputs Rivalry Among Competing Sellers Buyers Potential New Entrants
Strengths Weaknesses Opportunities Threats • Powerful strategy • Strong financial condition • Strong brand name image/reputation • Widely recognized market leader • Proprietary technology • Cost advantages • Strong advertising • Product innovation skills • Good customer service • Better product quality • Alliances or JVs • No clear strategic direction • Obsolete facilities • Weak balance sheet; excess debt • Higher overall costs than rivals • Missing some key skills/competencies • Subpar profits • Internal operating problems . . . • Falling behind in R&D • Too narrow product line • Weak marketing skills • Serving additional customer groups • Expanding to new geographic areas • Expanding product line • Transferring skills to new products • Vertical integration • Take market share from rivals • Acquisition of rivals • Alliances or JVs to expand coverage • Openings to exploit new technologies • Openings to extend brand name/image • Entry of potent new competitors • Loss of sales to substitutes • Slowing market growth • Adverse shifts in exchange rates & trade policies • Costly new regulations • Vulnerability to business cycle • Growing leverage of customers or suppliers • Reduced buyer needs for product • Demographic changes SWOT Analysis