1 Explain why the ability to perceive, interpret, and respond appropriately to the organizational environment is crucial for managerial success.

1. What is the Organizational Environment?
   The organizational environment consists of the forces outside the organization that have the potential to affect the way the organization operates.

2 Identify the main forces in a global organization's task and general environments, and describe the challenges that each force presents to managers.

1. Task environment – suppliers, distributors, customers, and competitors that affect the organization's ability to obtain its inputs and find sources for its outputs.
   1. Suppliers – provide input resources (e.g. raw materials, components, workers) that the organization needs.
   2. Distributors – help organizations to sell their goods and services.
   3. Customers – people or companies that buy goods and services from another organization.
   4. Competitors – organizations that sell similar goods and services
2. General environment
   1. Economic forces – interest rates, inflation, unemployment, economic growth.
   2. Technological forces – tools, machines, computers, skills, information, and knowledge that managers use in the design, production, and distribution of goods and services.
   3. Sociocultural forces – forces emanating from the social structure of the society.
   4. Demographic forces – characteristics of people, such as age, gender, ethnic group, race, sexual orientation, and social class.
   5. Political and legal forces – changes produced by new laws and regulations.
   6. Global forces – changes caused by international relationships.

3 Explain why the global environment is becoming more open and competitive and why barriers to the global transfer of goods and services are falling, increasing the opportunities, complexities, challenges, and threats that managers face.

2. The Changing Global Environment
   1. Declining barriers to trade and investment
      1. GATT – General Agreement on Tariffs and Trade – an international treaty that attempted to reduce trade barriers between countries.
   2. Declining barriers of distance and culture – improvements in global communication make communication possible with almost any place in the world
   3. Effects of free trade on managers
      1. NAFTA – North American Free Trade Agreement between the U.S., Mexico, and Canada to reduce trade barriers between their countries.
   4. The role of national culture – countries have very different cultures
      1. Values and norms – values are what a society believes to be good and right, while norms are unwritten rules of conduct that describe appropriate behavior.
      2. Folkways and mores – folkways are routine ways of interacting with others, while mores are norms that are very important to the society's social life.
   5. Hofstede's model of national culture
      1. Individualism vs. collectivism – individualism values individual freedom, while collectivism values the group.
      2. Power distance – are inequalities in the well-being of people due to their physical and intellectual capabilities?
      3. Achievement vs. nurturing – achievement societies value competition and performance, while nurturing societies value close personal relationships and caring for individuals who are weak.
      4. Uncertainty avoidance – the ability to tolerate differences between people.
      5. Long-term vs. short-term – long-term orientation values thrift and persistence, while short-term orientation encourages living for the present.
   6. National culture and global management – management practices that are effective in one country may be ineffective in another country.