The external Environment of business refers to the external forces which consist of legal-political, economic and culture, that play a part in influencing the direction that the firms take. The legal element of the environment is the framework of rules laid down by the government which business must operate. The labor laws protect the rights of the NBA players by providing for contracts of employment , compulsory insurance , recognition of National Basketball Association and industrial arbitration.
For Instances , a foreign team player needs a visa issued by the authority of customs in America in order to join the NBA team political background . The part for political environment is that America has a stable government through democratic election . Socialist country like America has to examine their performance as a policies provider in view of their ability to maintain the standard of living in a democratic country . For example, the import of overseas basketball player by NBA is in view of the United States law and political system .
But the international player must proof that he is not a loggerhead to the government. The foreign counterpart must not be bias by local and foreign basketball industries due to the difference of political background and not to go against the government in the United States. The economic environment under the United States operation system is more on market-based policies to achieve government objectives which will have impact on the cost, prices, competitiveness and profitability of business in the socialist country stability.
For instances, the currency rate to pay to the foreign players is the same pay to the players in the United States. This will lead to people to become basketball players as there is a high rate of unemployment in certain countries. Nevertheless, the currency rate of the United States influences the profit of the global organization like the NBA which has the headquarter operation in USA as it creates a financial burden for NBA to recruit more foreign players.
The cultural environment refers to the national culture and tradition of an organization being recognized that it is crucial to the success or failure of an organizations in meeting their goals. The organizational culture is an intangible mixture of rules, relationships, values, customs, lifestyles, attitudes, beliefs, educational standard, population characteristics changes, etc. that individuals are expected to work and to learn the norms and values in the way that we think, live and behave is the outcome of different complex cultural in different country.
For example, there should be group harmony when the foreign players adapt to the NBA-U. S. of culture adoption of what America are like. For example, the Americans are very informal to age difference and social standing. They are direct to talk and never beat around the bush. They are competitive achievers to complete their work. They are independent on their freedom and individualistic on their destiny. They prefer to ask a lot of questions and dislike silence in a conversation. They emphasis on cleanliness to their personal body and own clothing.
They are punctual to attend their appointments and meet up to schedules. The efficiency of the NBA to manage the global world is to do the things right by getting more output from the less inputs. For example, David Stern has engaged Yao Ming from China to be the NBA center of attention. The effectiveness of the NBA to manage the global world is to do the right thing to attain organizational goals. For example, the NBA wants to build a global name for the basketball by recruiting 64 players from 34 countries all over the world.
NBA can make use of the three global attitudes to secure their stand in the global world. For example, there are the ethnocentric attitude, the polycentric attitude and the geocentric attitude. The ethnocentric attitude refers to an organization in which has headquarters in their home country. The advantage is the organization has a simple management structure to run and control tightly within their own country. For example, before the times of David Stern, the NBA only has basketball league in the United States only (Local team player to play in local games).
The polycentric attitude refers to the organization in the host country ( foreign country)which has their own management to run in that country. The advantage is an organization in the host country will have better knowledge of the foreign market and workplace, and gain high support from the host government. For example, the NBA was to open up new network offices globally in order to support the pre-season games league in Europe, Latin America and Asia.
The geocentric attitude refers to the organization has the world focused management resources in their country and in the host country. The advantages are to engage capabilities management to run the organization in their own country and the host country regardless of country origin in order to a have better understanding of the global issues and achieve local and global objectives. For example, the NBA promotes its games and merchandise to supporters through the website visited by overseas. The NBA builds theme restaurant and stores in Asia and Europe.