Compensation:

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MEA
Compensation MacroEnvironmental Analysis Dr.
B. Wayne Rockmore, APS
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Looking Ahead

• This Week
• Finalize Team (Max 5) Assignments
• Create a Team (Company) Name
• Macroenvironmental Analysis (MEA)
• Environmental Organization Link Framework
• Next Class
• Compensation Strategy
• Internal Labor Markets

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MAN 4330Todays Agenda
Macroenvironmental Analysis (MEA) Environmental
? Organizational Link Framework
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Complexity of the Dynamic and Hostile Global
Environment
Economic Crisis in Asia, Russia and Latin America
European Common Market
Euro Currency
Worldwide Privatization of Industry
Explosion of Technology
Difficulty Attracting and Retaining Key
Managerial and Technical Personnel
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Levels of Environment

• Macro (General) environment economic, social,
  and demographic sectors that indirectly affect
  the organization
• Task environment those environmental sectors
  that are either directly affected by or have
  effect on the organization through their
  influence on operations and goal attainment
• Perceived Task Environment (PTE) those
  environmental elements that the organization
  believes will influence its goal attainment.

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Categorizing Task EnvironmentsTwo Dimensions

• 1) Homogeneity or heterogeneity of environment
  sectors that the organization has to manage
  (reflects relative complexity)
• 2) The relative changeability or rapidness of
  change among the environmental sectors (reflects
  uncertainty or lack of predictability decision
  makers face

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Examples of Relatively Simple Complex
Environment Sectors
Environment Customers Suppliers Government
Regs Technology Economy Labor Supply Unions
Simple One type customer Limited
suppliers Limited requirements Routine,
limited Little effect on Org. Homogenous,
ample Not a factor, limited
Complex Many type customers Multiple
suppliers Many requirements Variable in ,
scope Variable effect on Org. Heterogeneous,
variable Ranges from not a factor to influential
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MEA ENVIRONMENTAL SEGMENTS

• POLITICAL
• Special Interest Groups
• Regulatory

• SOCIAL
• Demographics
• Life-styles
• Values

PTE

• TECHNOLOGICAL
• Pacing
• Key
• Base

• ECONOMIC
• Cyclical
• Structural

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Three Goals of MEA

• Identify and Understand existing and potential
  changes in the Macroenvironment
• Integrate relevant environmental information into
  the organizations decision-making process
• Stimulate Strategic Thinking (develop, evaluate,
  and select strategic alternatives a strategic
  decision)

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MACROENVIRONMENTAL ANALYSIS (MEA)
Competition
Natural Environment
TASK ENV
Public Image
Customers
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Regulatory (Government / Courts)
Economic Conditions
PTE
Suppliers
Special Interest Groups
Labor Market (Critical Skill) Availability
Technology Criticality Rate of Change
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ENVIRONMENTAL ? ORGANIZATIONAL LINK FRAMEWORK
PERCEIVED TASK ENVIRONMENT
FIRM PERFORMANCE
STRATEGY
STRUCTURE
RESOURCE VALUATION (/-)
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ENVIRONMENTAL ASSESSMENT AND UNCERTAINTY
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