Chapter 7: Constraints on managers
L07.1
Definitions
The omnipotent view: Managers are directly responsible for an organization’s success or failure.
The symbolic view: Much of an organization’s success or failure is due to external forces outside
managers’ control.
External Internal
Managers aren’t totally constrained by these two factors since they can and do influence their culture
and environment.
, L07.2
The external environment
Includes those factors and
forces outside the
organization that affect its
performance.
Economic: Factors such as interest rates, inflation, changes in disposable income,
stock market fluctuations, and business cycle stages.
Demographic: Concerned with trends in population characteristics such as age,
race, gender, education level, geographic location, income, and family composition.
Political/legal: Looks at federal, state, and local laws as well as global laws and
laws of other countries. It also includes a country’s political conditions and stability.
Sociocultural: Societal and cultural factors such as values, attitudes, trends,
traditions, lifestyles, beliefs, tastes, and patterns of behavior.
Technological: Scientific or industrial innovations.
Global: encompasses issues associated with globalization and a world economy.
Managers face constraints and challenges from these components because of the impact
they have on jobs and employment, environmental uncertainty, and stakeholder
relationships.
Economic environment
Two significant risks facing business leaders and policy makers over the next
decade: severe income disparity and chronic fiscal imbalances.
However, our acceptance of an ever-increasing income gap may be diminishing.
The Demographic Environment
Baby boomers: born between 1946 and 1964.
Generation Y: born between 1978 and 1994.
Generation X: Youngest group (me).
Demographic age cohorts are important to our study of management because large
numbers of people at certain stages in the life cycle can constrain decisions and
L07.1
Definitions
The omnipotent view: Managers are directly responsible for an organization’s success or failure.
The symbolic view: Much of an organization’s success or failure is due to external forces outside
managers’ control.
External Internal
Managers aren’t totally constrained by these two factors since they can and do influence their culture
and environment.
, L07.2
The external environment
Includes those factors and
forces outside the
organization that affect its
performance.
Economic: Factors such as interest rates, inflation, changes in disposable income,
stock market fluctuations, and business cycle stages.
Demographic: Concerned with trends in population characteristics such as age,
race, gender, education level, geographic location, income, and family composition.
Political/legal: Looks at federal, state, and local laws as well as global laws and
laws of other countries. It also includes a country’s political conditions and stability.
Sociocultural: Societal and cultural factors such as values, attitudes, trends,
traditions, lifestyles, beliefs, tastes, and patterns of behavior.
Technological: Scientific or industrial innovations.
Global: encompasses issues associated with globalization and a world economy.
Managers face constraints and challenges from these components because of the impact
they have on jobs and employment, environmental uncertainty, and stakeholder
relationships.
Economic environment
Two significant risks facing business leaders and policy makers over the next
decade: severe income disparity and chronic fiscal imbalances.
However, our acceptance of an ever-increasing income gap may be diminishing.
The Demographic Environment
Baby boomers: born between 1946 and 1964.
Generation Y: born between 1978 and 1994.
Generation X: Youngest group (me).
Demographic age cohorts are important to our study of management because large
numbers of people at certain stages in the life cycle can constrain decisions and
