Notes on Business Management
External forces :The term environment means all the forces influencing the life and development of the firm. The external forces are commonly called uncontrollable forces. Management has no direct control over them.
External forces consist of the following: 1. Competitive: Kind and number of competitors, their locations and their activities 2. Distributive: National and international agencies available for distributing goods and services 3. Economic: Variables (such as GNP, unit labor cost, personal consumption expenditure) that influence a firm ability to do business. 4. Socioeconomic :Characteristics and distribution of human population 5. Financial: variables (such as interest rate, inflation rate, taxation) has impact a firm financial decisions. 6. Legal : The many foreign and domestic laws governing how international firms must operate 7. Physical : Elements of nature ( topography, climate and natural resources) 8. Political : Elements of nation’s political climates , nationalism, form of government and international organizations 9. Sociocultural: Elements of culture ( attitudes , beliefs and opinions ) important to international managers 10. Labor : composition , skills and attitudes of labor 11. Technological : the technical skills and equipment that affect how resources are converted to product
Self reference criterion:
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A common cause of the added complexity of foreign environment is manages unfamiliarity with other culture. The unconscious reference to the managers own culture values called self reference criterion, is probably the biggest cause of international business blunders. Successful managers are careful to examine a problem in terms of the local cultural traits as well as their own.
Example : in home country worker ready to work extra hour for extra income but in foreign culture worker may prefer time than money so when production manager facing a
External forces consist of the following: 1. Competitive: Kind and number of competitors, their locations and their activities 2. Distributive: National and international agencies available for distributing goods and services 3. Economic: Variables (such as GNP, unit labor cost, personal consumption expenditure) that influence a firm ability to do business. 4. Socioeconomic :Characteristics and distribution of human population 5. Financial: variables (such as interest rate, inflation rate, taxation) has impact a firm financial decisions. 6. Legal : The many foreign and domestic laws governing how international firms must operate 7. Physical : Elements of nature ( topography, climate and natural resources) 8. Political : Elements of nation’s political climates , nationalism, form of government and international organizations 9. Sociocultural: Elements of culture ( attitudes , beliefs and opinions ) important to international managers 10. Labor : composition , skills and attitudes of labor 11. Technological : the technical skills and equipment that affect how resources are converted to product
Self reference criterion:
-------------------------------------------------
A common cause of the added complexity of foreign environment is manages unfamiliarity with other culture. The unconscious reference to the managers own culture values called self reference criterion, is probably the biggest cause of international business blunders. Successful managers are careful to examine a problem in terms of the local cultural traits as well as their own.
Example : in home country worker ready to work extra hour for extra income but in foreign culture worker may prefer time than money so when production manager facing a