Chapter 4
The Importance of the Management Environment and its
Impact on Managerial Decision-Making
The management environment is complex and interdependent
Change is become more rapid, discontinuous and turbulent
Management mistakes are become increasingly costly
Managers need a means to identify strengths, weaknesses, opportunities and threats within
the environment to empower then to make better critical choices and choose more feasible
courses of action in executing POLC functions.
Process, Systems and Contingency approaches in
management
o Process Approach
o Based on the 4 functions of management, POLC.
o POLC is seen as circular and continuous.
o The process approach focuses on managing the total organisation.
o Systems Approach
o Defines a system as a set of interrelated and interdependent parts arranged in a
manner that produces a unified whole.
o The organisation is therefore in constant interaction with its environment and is
influenced by both the industry-specific and general environments.
o Contingency Approach
o This is based on the systems approach.
o The application of management principles depends on the specific situation that
managers face at a given point in time.
The Structure and Dynamics of the Management
Environment
o The micro-environment can also be referred to as the internal environment and includes the
organisation’s functions, policies, strategies, goals and objectives, resources available and
also designate the area over which the manager has total or full control.
o The market environment is the environment that surrounds the organisation in which
competition within a specific industry takes place.
o The broader environment is called the remote environment.
,
The Importance of the Management Environment and its
Impact on Managerial Decision-Making
The management environment is complex and interdependent
Change is become more rapid, discontinuous and turbulent
Management mistakes are become increasingly costly
Managers need a means to identify strengths, weaknesses, opportunities and threats within
the environment to empower then to make better critical choices and choose more feasible
courses of action in executing POLC functions.
Process, Systems and Contingency approaches in
management
o Process Approach
o Based on the 4 functions of management, POLC.
o POLC is seen as circular and continuous.
o The process approach focuses on managing the total organisation.
o Systems Approach
o Defines a system as a set of interrelated and interdependent parts arranged in a
manner that produces a unified whole.
o The organisation is therefore in constant interaction with its environment and is
influenced by both the industry-specific and general environments.
o Contingency Approach
o This is based on the systems approach.
o The application of management principles depends on the specific situation that
managers face at a given point in time.
The Structure and Dynamics of the Management
Environment
o The micro-environment can also be referred to as the internal environment and includes the
organisation’s functions, policies, strategies, goals and objectives, resources available and
also designate the area over which the manager has total or full control.
o The market environment is the environment that surrounds the organisation in which
competition within a specific industry takes place.
o The broader environment is called the remote environment.
,
