MGMT10002 Lecture Notes - Lecture 2: Tigerair, Cost Leadership, Vertical Integration
5 May 2018
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The External Environment and Organisational Goal Setting and Planning – Lecture 2
o External environment: exist outside the boundary of the organisation and have
potential effect on organisation
▪ Organisation
▪ Task environment: competitors, transaction partners and stakeholder interests
▪ General: PEST, indirect and not day to day. International
▪ Both general and task: open environment
▪ Organisational ecosystem: system formed by the interaction amongst a
community of organisations in the environment.
o Porter’s 5 forces
▪ Buyers (buyer power)
▪ Suppliers power
▪ Substitutes
▪ Competitors (potential entrants
▪ Weaker buyers have less information
▪ Suppliers can be the labour market improved through HRM
▪ Vertical integration = expanding to suppliers
o Finding Competitive edge
▪ Differentiation of product
▪ Cost leadership i.e Tigerair
▪ Focus: emphasis on consumer segment
o PEST
▪ Political-legal
▪ Economic
▪ Social- Cultural
▪ Technological
o Natural Dimension: element that occur naturally on Earth, environmental advocates
increase pressure towards the protection of this. Regulations
o Environmental Uncertainty
▪ Managers know what goal they wish to achieve but information about
alternative and future events is incomplete.
o Techniques of Adapting to Change
▪ Forecasting and planning
▪ Boundary-spanning
▪ Inter-organisational partnership
▪ Mergers and joint ventures
o Techniques of Shaping Environment
▪ Advertising and public relations
▪ political activity
▪ trade associations
Industry rivalry
find more resources at oneclass.com
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Document Summary
International: both general and task: open environment, organisational ecosystem: system formed by the interaction amongst a community of organisations in the environment, porter"s 5 forces, buyers (buyer power, suppliers power, substitutes, competitors (potential. Weaker buyers have less information: suppliers can be the labour market improved through hrm, vertical integration = expanding to suppliers, finding competitive edge. Differentiation of product: cost leadership i. e tigerair, focus: emphasis on consumer segment, pest, political-legal, economic, social- cultural, technological, natural dimension: element that occur naturally on earth, environmental advocates increase pressure towards the protection of this. Regulations: environmental uncertainty, managers know what goal they wish to achieve but information about alternative and future events is incomplete, techniques of adapting to change, forecasting and planning, boundary-spanning, mergers and joint ventures. Individual: action plans (blueprint of resource allocation, schedules etc, review progress and take corrective measures (performance dashboards, performance appraisal, limitations: the participation and feedback is often negated.
