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Management Practices

Management Practices. Lecture-7. Recap. Economic Forces Availability of credit Interest rates Social, cultural, demographic and environmental forces Life expectancy rates Per capita income. Today’s Lecture. Political, Govt., & Legal Forces Technological Forces

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Management Practices

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  1. Management Practices Lecture-7

  2. Recap • Economic Forces • Availability of credit • Interest rates • Social, cultural, demographic and environmental forces • Life expectancy rates • Per capita income

  3. Today’s Lecture • Political, Govt., & Legal Forces • Technological Forces • Revolutionary technological forces • Internet changes the nature of opportunities and threats • Competitive Forces • Collection and evaluation of information on competitors

  4. Political, Govt., & Legal Forces • Political, Governmental, and Legal Factors Represent Key Forces • Federal, state, local, and foreign governments are major regulators, deregulators, subsidizers, employers, and customers of organizations. • Political, governmental, and legal factors therefore can represent key  opportunities or threats for both small and large organizations • For industries and firms that depend heavily on government contracts or subsidies, political forecasts can be the most important part of an external audit.

  5. Political, Govt., & Legal Forces • Government Regulations • Key opportunities & key threats • Tax rates • Lobbying efforts • Patent laws

  6. Political, Govt., & Legal Forces Increasing Global Interdependence • Impact of political variables • Formulation of Strategies • Implementation of Strategies • Strategists in a global economy • Forecast political climates • Legalistic skills • Diverse world cultures

  7. Political, Govt., & Legal Forces Globalization of Industry • Worldwide trend toward similar consumption patterns • Global buyers & sellers • E-commerce • Instant transmission of money & information across continents

  8. Key Political, govt., & legal variables • Government regulation/deregulation • Tax law changes • Special tariffs • Political Action Committees (PACs) • Voter participation rates • Number of patents • Changes in patent laws • Environmental protection laws • Equal employment legislation

  9. Key Political, govt., & legal variables • Import-export regulations • Political conditions in other countries • Government budgets • World oil, currency, & labor markets • Location and severity of terrorist activities

  10. Technological Forces Revolutionary technological forces: • Profound impact on organizations • Internet • Semiconductors • XML technologies • UWB communications

  11. Technological Forces Internet changes the nature of opportunities and threats -- • Alters life cycle of products • Increases speed of distribution • Creates new products and services • Eases limitations of geographic markets • Alters economies of scale • Changes entry barriers

  12. Technological Forces • Altering the life cycles of products by • Increasing the speed of distribution • Creating new products and services • Erasing limitations of traditional • Geographic markets • Changing the historical tradeoff between production standardization and flexibility

  13. Competitive Forces • Collection and evaluation of information on competitors is essential for successful strategy formulation • Virtually competition in all industries can be described as intense.

  14. Competitive Forces Identifying rival firms • Strengths • Weaknesses • Capabilities • Opportunities • Threats • Objectives • Strategies

  15. Competitive Forces Key Questions About Competitors: • Their strengths • Their weaknesses • Their objectives and strategies • Their responses to all external variables (e.g. social, political, demographic, etc.) • Their vulnerability to our alternative strategies

  16. Competitive Forces Key Questions About Competitors: • Our vulnerability to successful strategic counterattack • Our product and service positioning relative to competitors • Entry and exit of firms in the industry • Key factors for our current position in industry • Sales and profit rankings of competitors over time • Nature of supplier and distributor relationships • The threat of substitute products or services

  17. Competitive Forces 7 Characteristics of most competitive U.S. firms: • Market share matters • Understand what business you are in • Broke or not, fix it • Innovate or evaporate • Acquisition is essential to growth • People make a difference • No substitute for quality

  18. Summary • Political, Govt., & Legal Forces • Technological Forces • Revolutionary technological forces • Internet changes the nature of opportunities and threats • Competitive Forces • Collection and evaluation of information on competitors

  19. Next Lecture • Decision Making • Types of Decision Making • Models of Decision Making • Devil’s Advocacy and Dialectical Inquiry

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