A summary in Question and answer form of Chapter 4 in the contemporary management principles textbook. The summaries include textbook information, textbook summaries and questions, lecture notes and learning activities.
HBMN130-1 – Unit 3 – Chapter 4
1. What is the importance of the management environment when making management
decisions?
• The management environment is complex and interdependent
• Changes are becoming more rapid, discontinuous and turbulent
• Management mistakes are becoming increasingly costly
• Managers need a way to identify strengths, weaknesses, opportunities and threats within the
environment to empower them to make better critical choices and choose more feasible courses of
action in executing planning, organising, leading and controlling functions.
2. What are the different approaches to management?
• The process approach
• The systems approach
• The contingency approach
3. Describe the process approach to management
• Based on the four main functions of management
• Performance of the planning, organising, leading and controlling functions within an organisation is
circular and continuous
• The process approach focuses on managing the total organisation.
4. Describe the systems approach to management
• Defines a system as a set of interrelated and interdependent parts arranged in a manner that
produces a unified whole
• Systems can be closed or open
• The organisation, which is a system in its own right, is there for a constant interaction with its
environment and is influenced by both the industry – specific and general environments.
5. Describe the contingency approach to management
• Based on the systems approach
• Application of management principles depends on the specific situation that managers face at a
given point in time.
, 6. Describe the relationship between the modern business organisation and its
environment
• Input: Organisation receives inputs from the environment such as human resources, capital,
technology and information
• Transformation: Organisation transforms inputs to outputs using technology. Operating systems,
administration systems, control systems and management processes
• Outputs: Organisations produces outputs in the form of products or services and sells them at a
profit or in some cases a loss. This creates job opportunities
7. Name the different structures and dynamics of the management environment.
• The micro environment / The internal environment
• The macro environment / external environment
o Market environment
o Remote environment
8. Describe the micro – environment and name its components
• The organisation itself over which management has full control
• The components of this environment is:
o Resources
o Organisational functions
o Policies
o Strategies
o Goals and objectives
9. Describe the macro environment and name its components
• Area outside of the organisation over which management has no control over
• The components of this environment is:
o Market environment
o Remote environment
10. Describe the market environment and name its components
• Environment that surround the organisation in which the competition within a specific industry
takes place
• Lies between the micro environment and the remote environment and forms a buffer between the
organisation and the remote environment
• The components of this environment is as follows:
o Customers
o Suppliers
o Intermediaries
o Competition
o Labour marker and the labour union
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