Managing In A Global Environment

Two of my article published earlier focused on the relevancy of capitalist internationalizing their venture to survive in the 21st Century market competition which this edition try to define the type of manager that will be relevant in such environment.

If organizations are to adapt to the changing environment their managers must learn to understand the forces that operate in it and how this forces gives rise to opportunities and threats. This paper furthermore seeks to examine why the environment, both domestically and globally has become more open, vibrant and competitive. Also forces in the “task” and “general” environment affect global organization and their managers.

To advance, it will be expedient to define organizational environment according to Contemporary Management Ed.4, (Jones &George) which state “Is a set of forces and conditions outside the organizations boundaries that have the potential to affect the way the organization operate”

We need to understand these forces according to the definition changes over time and thus present managers with opportunity and threats. Opportunities like opening of global market to obtain resource or enter new markets and thereby strengthen their organization. In contrast, the rise of new competitors, global economic recession, or the oil shortage pose threat can devastate resource or sell the organizations goals and services. So the quality of 21st Century manager should be someone who will be able to understand organizational environmental forces and their ability to respond appropriately to those forces.

To identify opportunities and threat caused by forces in the organizational environment, it is helpful for managers to distinguish between the “Task Environment” and the more encompassing “General environment”.

“Task environment” is a set of forces and conditions that originate with suppliers, distributors, customers and competitors. These forces and conditioning affect an organizations ability to obtain inputs and dispose of its outputs. This forces have the most immediate and direct effect on managers because they pressure and influence managers on daily bases.

“General Environment” includes the wide range of economic, technological, scio- cultural, demographic, political, legal and global forces that affect the organization and its task environment. For the Individual managers, opportunities and threat resulting from changes in the general environment are often more difficult to identify and respond to than are events in the task environment. However changes in these forces can have major impacts on managers and their organizations.

“Global forces” are outcomes of changes in international relationship in nation's economic, political, legal and technological system. The most important global forces affecting managers and organization are the increasing of economic integration of countries around the world that has been taking place during the past decade. Free market agreement on Tariffs and Trade (GATT), the North American free trade agreement (NAFTA), the growth of the European Union (EU), African Free trade zone (AFTZ) and Economic Community of West Africa State (ECOWAS) has led to a lowering of barriers to free flow of goods and services between nations. Such falling trade barriers pose a serious threat to the manager because they increase competition in the task environment.

Any idea that the world is composed of set of distinct national countries and markets that separated physically, economically and culturally from one another has vanished. Managers now recognize that, companies exist and compete in a truly global market.

Today to be defined as a good manager you need to regard the global environment as a source of important opportunity and threats that you must respond to.

Vol. 2 “EFFECT OF FREE TRADE ON MANAGERS” as the next publication

Tweneboah Senzu (PhD)
Managing Director of Bastiat Ghana Institute
(Free market Economic Think Tank Institute)
[email protected]
www.bastiatghana.org