Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 1 CHAPTER TWO CHAPTER TWO Organization Environments and Culture Prepared by Deborah Baker Texas Christian University Effective Management 2nd Edition Chuck Williams Effective Management 2nd Edition Chuck Williams
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 2 CHAPTER TWO Changing Environments Environmental Change Environmental Complexity Resource Scarcity Uncertainty Environmental Change Environmental Complexity Resource Scarcity Uncertainty Characteristics of Changing External Environments 1
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 3 CHAPTER TWO Environmental Change Environmental Change is the rate at which a company’s environments change stable environments dynamic environments Punctuated equilibrium theory companies cycle through stable and dynamic environments 1.1
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 4 CHAPTER TWO Uncertainty Uncertainty is how well managers can understand or predict the external changes and trends affecting their businesses high low 1.4
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 5 CHAPTER TWO Business B Customers Competitors Suppliers Industry Regulation Advocacy Groups Business A Customers Competitors Suppliers Industry Regulation Advocacy Groups Sociocultural Component Economy Political/Legal Component Technological Component Adapted from Exhibit 2.3 Specific Environment General Environment General & Specific Environments
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 6 CHAPTER TWO General Environment 2 Organization Specific Environment General Environment
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 7 CHAPTER TWO Making Sense of Changing Environments Acting on Threats and Opportunities Interpreting Environmental Factors Environmental Scanning EvaluatingExternalEnvironmentsEvaluatingExternalEnvironments 4
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 8 CHAPTER TWO Environmental Scanning Environmental scanning: searching the environment for events or issues that might affect an organization Scanning the environment: keeps companies current on industry factors reduces uncertainty alters organizational strategies contributes to organizational performance 4.1
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 9 CHAPTER TWO Internal Environments Internal environment consists of the trends and events within an organization that affect the management, employees, and organizational culture important because it affects what people think, feel, and do at work organizational culture is the set of key values, beliefs, and attitudes shared by organizational members
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 10 CHAPTER TWO Successful Organizational Cultures D.R. Denison & A.K. Mishra, Organization Science 6(1995):
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 11 CHAPTER TWO Levels of Organizational Culture Symbolic artifacts Behaviors Symbolic artifacts Behaviors 1. Surface Level SEEN What people say How decisions are made What people say How decisions are made 2. Expressed Values and Beliefs HEARD Beliefs and assumptions Rarely discussed Beliefs and assumptions Rarely discussed 3. Unconsciously Held Assumptions and Beliefs BELIEVED Adapted from Exhibit
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 12 CHAPTER TWO Changing Organizational Cultures Behavioral addition is the process of having managers and employees perform a new behavior Behavioral substitution is having managers and employees perform a new behavior in place of another behavior Change visible artifacts such as the office design and layout, company dress codes, etc. 5.3