Professional Documents
Culture Documents
CH 3
CH 3
CH 3
Managing Business
Environment
Learning Outcomes
ü Contrast the actions of managers according to
the omnipotent and symbolic views.
ü Describe the external environment.
ü Describe the internal environment.
3.1. The Managers’ View
ü Omnipotent View of Management - the view
that managers are directly responsible for an
organization’s success or failure.
to country
PESTLE and SWOT
Michael Porter’s
five forces (1980)
Using the Five-Forces model Analysis
Common Weapons for Competing with Rivals
3.2. External Environment
The External Environment Analysis (Macro-environment
+ Industry analysis) provides the basis for identifying
many of the Opportunities and Threats for the SWOT
Analysis.
3.3 Internal Environment
Strategic Capability
The Resource-Based View of Strategy (RBV)
ü “...The resource-based view emphasizes the
internal capabilities of the organisation in
formulating strategy to achieve a sustainable
competitive advantage.” A Henry, pp. 126
ü Strategic capability is based on the resources
available to the organisation and the competencies
it develops in order to make use of the resources
(Chief Advocates: Hamel & Prahalad(1990);
Rumelt(1991); Barney(1991); Grant(1991)).
Definition of Resources and Capability
v Resource
ü Is a productive input or competitive asset that is
owned or controlled by a company (e.g., a fleet of
oil tankers).
v Capability
ü Is the capacity of a firm to perform some activity
proficiently (e.g., superior skills in marketing). It is a
“firm’s capacity to deploy resources for a desired
end result”.
Resources
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Source: Based on the discussion in Michael E. Porter, Competitive Advantage (New York: Free Press, 1985), pp. 37–43.
Source: Based on the discussion in Michael E. Porter, Competitive Advantage (New York: Free Press, 1985), pp. 37–43.
44
45
The
Competency
framework
Resources
v THRESHOLD RESOURCES – “needed to play”
Those resources that an organisation needs to have in order
to meet the minimum requirements of its customers
ü For example, an airline needs more than a fleet of planes, it
will also need all the supporting structure, including landing
and fly-over rights
v DISTINCTIVE RESOURCES – “needed to win”
“...those resources that criPcally underpin competitive
advantage and that others cannot easily imitate or obtain.”
ü For example, a strong brand name or reputation
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Competencies
v THRESHOLD COMPETENCIES – “needed to play”
Those minimum competences an organisation requires in
order to ensure that resources are deployed efficiently
enough to meet minimum customer requirements
ü For example, an airline will need to ensure its operations
conform to minimum safety standards
v DISTINCTIVE (CORE) COMPETENCIES - “needed to win”
“...the linked set of skills, activities and resources that,
together, deliver customer value, differentiate a business
from its competitors and, potentially, can be extended or
developed .”
ü For example, a high level of marketing expertise 48
3.3 Internal Environment
ü Organizational culture
ü A system of shared meanings and common beliefs held
by organizational members that determines, in a large
degree, how they act towards each other.
ü “The way we do things around here.”: Values, symbols, rituals,
myths, and practices
ü Implications:
v Culture is a perception.
v Culture is shared.
v Culture is descriptive.
Exhibit 3-5 Organizational Culture
How Culture Affects Managers