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OVERVIEW

5 November, 2015 - 15:04

This chapter discusses the concept of the environment.

The first part of the chapter, on the macroenvironment, presents a framework for considering how the various aspects of the world environment are organized. Here the biologist's approach to the environment is chosen as the most practical methodology. The biologist conceives of the universe as a continuous interaction between the living organism and its natural surroundings. For the international manager, the universe is a continuous interaction between the people of the world and their physical environment.

The second part of the chapter, on the microenvironment, looks more specifically at a particular organization's external business environment (EBE) and outlines practitioners' attempts to make use of this environment. Because the international EBE encompasses a collection of sovereign nation-states, international managers must be extremely cautious and very well prepared before they begin tinkering with it. The international manager's microenvironment is approached using the well-accepted methodology of environmental scanning. Scanning is a method of gaining knowledge about the external environment by searching it thoroughly and continuously, point by point, in order to form an image of it. This scanning process begins with a more or less casual glance and ends with structured research whose purpose is the solution of a specific problem.

In sum, a scan of the macroenvironment provides the so-called big picture or bird's-eye view, and a scan of the microenvironment zeroes in on the actual pragmatic question: How does the external environment affect managerial decision making?

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LEARNING OBJECTIVES

After studying the material in this chapter, the student should be familiar with the following concepts:

  1. Environment
  2. Macroenvironment
  3. Microenvironment
  4. Food power
  5. Mineral power
  6. Oil power
  7. Ecology
  8. Major religions of the world
  9. Politics and major political alliances
  10. United Nations and its family
  11. NATO and the Warsaw Pact
  12. Economics and major economic alliances
  13. OECD, COMECON, and the Group of 77
  14. First, Second, and Third Worlds
  15. Environmental scanning