Chapter 2 - The external and internal environment. In this chapter, the learning objectives are: Identify the major components of an organization’s task environment, explain how each component in the task environment impacts the organization, identify the major components of an organization’s general environment, explain how each component in the general environment impacts the organization,. | chapter 2 The External and Internal Environment McGraw-Hill/Irwin Principles of Management © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Learning Objectives Identify the major components of an organization’s task environment. Explain how each component in the task environment impacts the organization. Identify the major components of an organization’s general environment. Explain how each component in the general environment impacts the organization. Discuss the nature of change in the external environment. Outline the main components of the internal environment of an organization and articulate their implications for managerial implications. The Environment of Managers General Environment Task Environment Internal Environment The Manager See Learning Objective 1: Identify the major components of an organization’s task environment. See text page: 28 SWOT Strengths Weaknesses Opportunities Threats See Learning Objective 1: Identify the major components of an . | chapter 2 The External and Internal Environment McGraw-Hill/Irwin Principles of Management © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Learning Objectives Identify the major components of an organization’s task environment. Explain how each component in the task environment impacts the organization. Identify the major components of an organization’s general environment. Explain how each component in the general environment impacts the organization. Discuss the nature of change in the external environment. Outline the main components of the internal environment of an organization and articulate their implications for managerial implications. The Environment of Managers General Environment Task Environment Internal Environment The Manager See Learning Objective 1: Identify the major components of an organization’s task environment. See text page: 28 SWOT Strengths Weaknesses Opportunities Threats See Learning Objective 1: Identify the major components of an organization’s task environment. See text pages: 29 Task Environment Bargaining Power of Suppliers Threat of Entry Threat of Substitutes Bargaining Power of Buyers Intensity of Rivalry Porter’s Competitive Forces Model See Learning Objective 1: Identify the major components of an organization’s task environment. See text pages: 29 Threat of Entry Barriers to entry – factors that might make it costly for potential competitors to enter an industry and compete with firms already in the industry Economies of scale – cost reduction associated with large output Brand loyalty – the preference of consumers for the products of established companies See Learning Objective 2: Explain how each component in the task environment impacts the organization. See text page: 30 Wal-Mart in India? Government policy does not allow foreign retailers to setup shops in India yet, however, Wal-Mart has declared its intentions to enter Indian market as soon as the policy changes. Economies of scales and growth – Wal-Mart’s
