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18/01/2019 09:49:15 AM

The managerial environment- P2

Task environment

The second environment of global environment is task environment. It will effect on operation of the company directly. The task environment is the set of forces and conditions that originate with global suppliers, distributors, customers, and competitors. These forces and conditions affect an organization’s ability to obtain inputs and dispose of its outputs. The task environment contains the forces that have the most immediate and direct effect on managers because they pressure and influence managers on a daily basic.

1. Suppliers

Suppliers are the individuals and companies that provide an organization with input resources such as  raw materials,  component  parts,  or  employees  that  it  needs  to  produce  goods  and services. In return, the supplier receives payment for those goods and services. Managers have to make sure a supply of input resources reliable.

Take Dell Computer, for example. Dell has many suppliers of component parts such as microprocessors (Intel and AMD), disk drives (Quantum and Seagate Technologies) operating systems (Microsoft) and specific applications software (IBM, Oracle, and America Online)

The nature, number, or type of suppliers result in forces that produce opportunities and threats to which managers must respond if their organizations are to prosper. A supplier’s bargaining position is especially strong when (1) the supplier is the sole source of an input and (2) the input is vital to the organization. In contrast, when an organization has many suppliers for a particular input, it is in a relatively strong bargaining position with those suppliers and can demand low- cost, high-quality inputs from them.

The global companies are interested in searching out the lowest-cost, best-quality suppliers no matter where they are. That drives these companies purchase inputs from other companies or countries with lower labor and raw material cost. This trend was known as global outsourcings that have expanded increasingly in many companies as well as countries.

2. Distributors

Distributors are organizations that help other organizations sell their goods or services to customers.  For example, package delivery companies such as FedEx, UPS, and the US Postal Service  became  vital  distributors  for  the  millions  of  items  bought  online  and  shipped  to customers by dot-com companies. The decision that managers make about how to distribute products to customers can have important effects on organizational performance. The nature of distributors and distribution methods can bring opportunities and threat for managers. If distributors become so large and powerful  that  they  can  control  customers’  access  to  a  particular  organization’s  goods  and services, they can threaten the organization by demanding that it reduce the prices of its goods and services. In contrast, the power of a distributor may be weakened if there are many options for the global companies to choose.

3. Customers

Customers are the individuals and groups that buy the goods and services that an organization produces. For example, Dell’s customers can be segmented into several distinct groups: (1) individuals who purchase PCs for home use, (2) small companies, (3) large companies, (4) government agencies, and (5) educational institutions.  Changes in the number and types of customers or in customers’ taste and needs result in opportunities and threats. An organization’s success depends on its response to customers. The most obvious opportunities associated with expanding into the global environment are the prospect of selling goods and services to new customers. However, the global environment has brought a wider range of competitors for those organizations that operate not only in one country.

Competitors

Competitors are organizations that produce goods and services similar to a particular organization’s goods and services. Therefore, competitor is one of the most important forces that an organization confronts in its task environment. Dell’s competitors include other domestic manufacturers of PCs such as Apple and HP, as well as oversea competitors such as Sony and Toshiba, etc. Rivalry between competitors is potentially the most threatening force that managers

must deal with. A high level of rivalry often results in price competition, and falling prices reduce access to resources and lower profits. In addition, fierce competition drives down prices and profits, unethical companies often try to find way to collude with competitors to keep price high. Although extensive rivalry between existing competitors is a major threat to profitability, so is the potential for new competitors to enter the task environment.

When new competitors to enter an industry, they may face with many obstacles such as barriers to entry, economies of scale and brand loyalty.

Nguyen Thi My My