ORGANIZATION AND ENVIRONMENT. Trouble at Amana In 1967, Amana introduced the first microwave, and...
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Transcript of ORGANIZATION AND ENVIRONMENT. Trouble at Amana In 1967, Amana introduced the first microwave, and...
ORGANIZATION AND ENVIRONMENT
Trouble at Amana
In 1967, Amana introduced the first microwave, and gained 60% of the market. A decade later, its market share declined to 6%. WHY?
Mis-forecast: microwave will SUBSTITUTE for traditional ways of cooking
Misunderstood the market: assumed that the market DOESN’T care about the price
Unprepared for new entrants: Low priced Japanese competitors
The Increase of Gas Price
Tesla Motors’s plan: Produce battery in Thái Lan, transport
to England to assembly, and sell the cars in US. But now, they produce battery in California.
GM: Past several years, SVU and mini-truck
were well sold in China. Now, people are looking for more economy cars.
How Gaz Price Affect Strategies
Reconsidering global strategy Global strategy suggests that firms can
make different components in different countries.
High gaz price means that transportation would be very expensive
Reconsiderting values of the product Gaz consumption becomes a crital factor
How Current Recession Affect Business
Falling stock and slumping dividends Credit impairment and bankruptcy Employee lay-offs and benefit cut Cut to quality Reduce consumer access
Small firms would be more vulnerable to the recession
Environment Factors
… are those that have impacts on the organizational performance but are not directly controlled by the organization
ENVIRONMENT AND STRATEGY
Economic
Political
Technological
Social
ORGANIZATIONAL PERFORMANCE
Global Demographic
Macroenvironment – PEST
Political• Government stability• Taxation policy• Foreign trade
regulations• Social welfare
policies• Legal framework
Economic• Business cycles• GNP trends• Interest rates• Money supply• Inflation• Unemployment• Disposable income
Political Factors: Example
Ranking On “Easy To Do Business”
Rank 155 countries Based on various indicators Surveys law firms/ organizations
Which indicators make up the ranking?
Starting a business• Procedures, time, cost and minimum capital to open a new
businessDealing with licenses• Procedures, time and cost of business inspections and
licensing (construction industry)Hiring and firing workers• Difficulty of hiring index, rigidity of hours of index, difficulty of
firing index, hiring cost and firing costRegistering property• Procedures, time and cost to register commercial real estateGetting credit• Strength of legal rights index, depth of credit information
index
Which indicators make up the ranking? (con.)
Protecting investors
• Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
Paying taxes
• Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share of gross profit
Trading across borders
• Number of documents, number of signatures and time necessary to export and import
Enforcing contracts
• Procedures, time and cost to enforce a debt contract
Closing a business
• Time and cost to close down a business, and recovery rate
IFC Rank Countries on “Easy to do Business”, 2005
20101. Singapore2. New Zeala3. Hong Kong4. U.S.A.12. Thailand15. Japan19. Korea23. Malaysia46. Taiwan89. China93. Vietnam122. Indonesia144. Philippines 145. Cambodia167. Laos
20141. Singapore 2. New Zealand3. Hong Kong5. Korea7. USA18. Malaysia19. Taiwan26. Thailand29. Japan78. Vietnam90. China95. Philippines 114. India135. Cambodia148. Laos
TI’s Ranking on Corruption 2014
2. New Zealand 100. China
7. Singapore 90. India
15. Japan 85. Philippines
17. Hong Kong 119. Vietnam
35. Taiwan 133. Indonesia
50. Malaysia 156. Cambodia
43. South Korea
85. Thailand
The Political Environment Map
Low corruption
High corruption
Easy
Difficult
NZSingapore
HKJapan
TaiwanMalaysia
SK
Thailand
China
India
Vietnam
IndonesiaPhilippines
Macroenvironment – PEST
Socio-cultural• Population demographics• Income distribution• Social mobility• Lifestyle changes• Attitudes to work and
leisure• Consumerism• Levels of education
Technological• Government spending on
research• Government and industry
focus on technological effort• New discoveries
/developments• Speed of technology
transfer• Rates of obsolescence
Figure 22. Forms of corruption, in terms of enterprises’ viewpoints, in last twelve months
17
2.2. Firms’ experiences
In HCM City and Can Tho, a big % of firms paid informal fees each year, and also many firms paid more than 2% of revenue
Some sign of decrease in corruption in HCMC and Dong Thap.
(Source: PCI)
3.2. Transparency: Negotiation with tax was still an important business practice
30 – 40% of firms in Can Tho and HCMC admitted negotiation with tax.
The number fluctuated greatly in Dong Thap
Some sign of improvement in Can Tho 2008 – 2011
Video: Fake Products in China What impacts do counterfeiting products
have on: a) Chinese economy (short and long term)? b) Real products (Chinese and other countries”)? Consumers?
Why is it so hard to stop counterfeiting in China (using PEST model)?
What should managers (Chinese and foreign) do to protect their real products under this situation?