Ten Elements of the External Business Environment

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Ten Elements of the External Business Environment
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1. Government Regulation

• Traditional Industry Regulation - ICC, CAB, FCC
• New Regulation - CPSC, OSHA, EEOC
• Markets and Competition - Anti-Trust

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2. Energy and the Physical Environment

• EPA- Environmental Protection Agency

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3. Labor and Human Resources

• Labor Movement
• Diverse Workforce
• Immigration Policy
• Public Sector Unions

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4. Technology

• Robotics and Plant Automation
• Computers in the Office
• Elimination of Jobs

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5. Welfare and the Provision of Public Services

• Public Service Provision - Roads, Sewer, Water,
  etc..
• Welfare - Welfare Reform
• Social Security

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6. Inflation, Unemployment and the National Output

• Overall Economic Conditions
• GDP, Unemployment Rate, CPI, i rates, Stock
  Market
• Fiscal Policy
• Monetary Policy

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7. Regional and Local Issues

• Politics and Public Policy
• Growth and Development or Decline
• New Industry

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8. International Events

• Globalization of Industry
• International Trade
• End of Communism
• Wars, International Strife

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9. The Political System

• Public Policy Affects All Elements of the
  External Environment of Business
• Course of Public Policy is Crucial
• Liberal, Conservative
• Democrat, Republican, Independent

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10. Social Responsibility and Ethics

• Concerns Business Response
• Social Responsibility - What is it?
• Ethics

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Implications for Management

• Planning
• Organizing
• Controlling
• Staffing/Rewarding

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Pullman Standard Corporation

• Largest Railcar Manufacturer in US
• 1980
• Sales 800 Mill per Year
• 5,000 Employees
• 1982
• Sales 0
• 25 Employees

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How Could This Happen?

• 1972 Russian Wheat Deal
• Grain Backed Up at Gulf Ports
• ICC - Allocated Hopper Cars to Small Shippers
• Tax Shelters
• Oil Price Increases

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Result - Tremendous Increase in Demand for
Railcars

• Pullman Produced Railcars as Fast as it Could

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1980s Changes

• Soviet Invasion of Afghanistan
• Wheat Deal became Grain Embargo

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1980s Changes

• ICC Removed Restrictions on Grain Hopper Cars
• Staggers Rail Act of 1980
• Tax Laws Changed
• Economy - Recession
• End to Increase in Oil Prices
• Internal Factors

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Result

• Pullman Closed its Doors in Two Years
• 25 Employees
• Zero Sales

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