Introduction to Understanding the Environment
Well this brings up 3 difficulties:
There’s so much going on that even identifying the influences still may not paint an overall picture of the important influences
Speed of change in these influences is growing ever more rapid
Managers are just people
They oversimplify - by concentrating on what has historically been a key influence
So frameworks have been developed to try and cope with the complexity and challenge natural managerial thinking
The basic idea here is that this forces management to look at all aspects of the environment surrounding them - to help them understand their position within it - and what opportunities and threats may soon occur
Tax policy; Foreign trade regs; Government stability
Business cycles; GNP trend; Interest rates; Money supply; Inflation; Unemployment; Disposable Income
Demographics; Income distribution; Social mobility; Lifestyles; Consumerism; Education levels
Research spending; Government focus; New discoveries; Obsolescence rates
Environmental protection laws; Using up of raw materials; cutting edge e.g. genetically modified goods
Monopoly laws; Employment law
This framework identifies the factors in the categories.
However it’s pretty useless as just a list, so models later on in the course are used to inform and guide analysis.
It cannot quantify effects.