THE SYSTEMS APPROACH TO MANAGEMENT An open system Dependent on
the environmentSpecific interaction with the environmentSubsystem
university library systems, finance marketing, production
salesSynergy the whole system is greater than the sum of its parts
Management should align its organisation with the environment in
which it operates in such a way that it can fully utilise
opportunities and can deal with possible threats. To be able to do
this, managers must first understand the composition and nature of
the organisations environment
COMPOSITION OF THE MANAGEMENT/BUSINESS ENVIRONMENT
Factors/variables (inside/outside) affecting continued
sustainability of an organisationMicroenvironment - organisation
itself, management has almost complete control. Market or task
environment - surrounds the organisation. Macro-environment -
outside the organisation and the market environment
MANAGEMENT/BUSINESS ENVIRONMENT CHARACTERISTICSInterrelatedness
of environmental factorsIncreasing instability Environmental
uncertainty Complexity of the environment Environment is becoming
unpredictable
THE INTERANL OR MICRO-ECONOMIC ENVIRONMENT Main environment in
which management function/operates Environment that management
plans, organises, leads and controls the activities of the
organisation Management process is enacted in this environment to
achieve synergy between the goals of the organisation, the
resources for realising the goals Different levels of
management
THE MARKET OR TAKS ENVIRONMENT The Market Suppliers
Intermediaries Competitors The possibility of new entrants
(competitors) or departuresThe bargaining power of clients and
consumers The bargaining power of suppliersThe availability or lack
of substitutes products The number of existing competitors
MICHAEL PORTERS FIVE FORCES
THE MACRO-ENVIRONMENT Political Environment Economic Environment
Socio-cultural Environment Ecological/physical
EnvironmentTechnological Environment The International
Environment
PREPARING FOR ENVIRONMENTAL CHANGESINFORMATION MANAGEMENT- IS to
make adequate provisions for environmental scanning
STRATEGIC RESPONSES adapting an existing strategy or developing
a new one (mergers, takeovers, joint ventures)
STRUCTURAL CHANGE adapt/redesign an organisational structure
(low level of uncertainty bureaucratic approach where basic rules
and a system of stereotyped actions are sufficient for successful
existence)
SUMMARYOrganisations as systemsSubsystemsInternal
EnvironmentTask EnvironmentExternal EnvironmentActions to mitigate
against environmental changes
