Management contributes greatly to any nation's standard of living. As an example, consider the role of management while comparing the wide differences in national income among nations. In the less economically developed countries, few managers have had opportunities to work in large-scale business organizations. Also, these countries have underdeveloped business services, financial institutions, and marketing channels. Due to a lack of skilled workers, engineers, and trained managers, production is often based on obsolete methods. The problem is compounded by a lack of universities, research institutions, and scientists who can adapt new methods to local conditions. In contrast, western Europe and Japan rebuilt rapidly after World War II because of their technical know-how, managerial abilities, and established social institutions.
Obviously, then, management is an important part of the total environment in which we live. It is not only influenced by environmental factors but is also a force in changing them. As shown in figure, social, political, scientific/technological, and economic systems make up these external environments. All of them have major impacts on the growth and development of management. By examining each, it is possible to gain a greater awareness of those variables that interact with management to influence organizational behavior.
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