2.1.1 Classifying external elements
Your textbook divides the external elements that affect organisations into two main areas. These divisions provide a useful method of conceptualising the environment, its impact and the organisation's ability to respond. The divisions are:
- the mega-environment
The mega-environment affects the climate in which an organisation's activities take place, but does not affect the organisation directly. Mega-environment influences include technological, economic, sociocultural, political, legal and international factors. These are the broad conditions in societies.
- the task environment
The task environment consists of the specific outside elements with which an organisation interfaces in conducting its business - variables which directly influence an organisation's activities. The task environment includes customers and clients, government agencies, competitors, suppliers and labour supply.
The two environments are clearly explained in the following reading. Note the 10 legal ways to track competitors on page 71.
In your text
Bartol, K M; Martin, D C; Tein, M H and Matthews, G W (2001), pages 63-73.
This following reading based on material adapted from Boris Petrov (1982), 'The advent of the technology portfolio'. It outlines general questions or issues that organisations can consider for the various external elements or issues. Skim read through to get some ideas.
Reading 2.2
Adapted from: Petrov B 'The advent of the technology portfolio.' Reprinted by permission from the Journal of Business Strategy , Fall 1982. Published by Warren, Gorham & Lamont, Inc. Boston , Mass.
An aside: New ways to battle corporate spooks
Though the vast majority of companies don't resort to James Bond tactics when gathering information on competitors, a few just can't resist. Hitachi tried to pay $525,000 to IBM employees for some of the Big Blue's trade secrets in the early 1980s but was caught.
A competitor flew a plane over a Du Pont plant and snapped pictures to help figure out the factory's capacity. More recently, Procter & Gamble has 'charged' that a number of companies used spies to get hold of its secret recipe for soft cookies.
How can you avoid being victimised? Educating employees about the seriousness of leaking sensitive information is a good place to start. Warn your workers about companies that hire head-hunting firms to grill unwitting job candidates on business plans and R & D secrets. Assume that any consulting firm or organisation that calls and says it is doing an industry study is digging up nuggets for the competition. Ben Zour, a senior analyst for business research at Eastman Kodak, says, 'You have to make employees sensitive to the fact that if they leak information, they will lose their jobs'. Or worse, if the breach is serious enough, an employee could face criminal prosecution.
Every company tries to keep competitors from hiring away its best employees. But be careful too about pulling that trick yourself. In a recent case in Scotland , an American electronics firm hired an accomplished marketing manager from a competing multinational. A month later he returned to his old company - with some of the firm's European business plans.
Next to leaks, electronic eavesdropping poses the biggest threat to your trove of secrets. Assume anything you communicate by telex, electronic mail, fax or phone is up for grabs. An estimated seventy foreign governments have the ability to read what multinationals transmit into their countries. Jan Herring, a consultant with Futures Group of Glastonbury , Connecticut , warns that often an American executive will attend an important meeting in, say Japan , and have the conference room swept for electronic bugs, then will return to his hotel and tell his US colleagues the results of the meeting over a phone line tapped by a competitor. Says Herring: 'You find companies that lose by $600 on a $6 million bid, and you wonder why.'
Electronic eavesdropping devices are getting ever more sophisticated. At Spy Shops International in Miami , a particularly popular device is a laser gun that can hear conversations up to a half mile away by measuring sound vibrations in an office window. Another gadget can read your computer screen some two blocks away by picking up radio waves emitted by that machine. Naturally, the store also sells countermeasures: an apparent cigarette pack that vibrates in your pocket when someone who's wired walks in, for example, or a computer that foils wire taps by scrambling messages.
If you discover a bug, don't despair. Companies that resort to illegal or unethical spying are very likely in desperate straits. If you can pinpoint what they're trying to learn by spying on your company, chances are you have spotted a weakness and can strike back.
Source: Adapted from Brian Dumaine. 'Corporate spies snoop to conquer'. Used by permission of Fortune (1988, 7 November), page 72.