Understanding the Context of Management Understanding the Context of Management

Learning Outcomes Describe the general and task environments and the dimensions of each. Explain the strategies managers use to help organizations adapt to an uncertain or turbulent environment. Define corporate culture and give organizational examples. Explain organizational symbols, stories, heroes, slogans, and ceremonies and their relationship to corporate culture. Describe how corporate culture relates to the environment. Define a cultural leader and explain the tools a cultural leader uses to create a high-performance culture.

Are You Fit for Managerial Uncertainty? The environment in which businesses operate are increasingly dynamic. Some managers cannot respond to environmental surprises. In an uncertain environment, managers need to facilitate new thinking, new ideas and new ways of working.

External Environment General environment – affects indirectly General environment – affects indirectly Task environment Affects directly Influences operations and performances Internal environment – elements within the organization’s boundaries

International Dimension Events originating in foreign countries. Impacts all aspects of the external environment: New competitors New customers New suppliers Today, all companies need to think globally! Portion of the external environment that represents events originating in foreign countries as well as opportunities for U.S. companies in other countries.

Technological Dimension Scientific and technological advances Specific industries Society at large Impact: Organizations Managers Customers

Socio-Cultural Dimension Dimension of the general environment Demographic characteristics Norms Customs Values Today’s demographics are the foundation of the future workforce Demographic trends affect organizations globally Norms Customs Values of population Geographical Distribution Population Density Age Education Levels

Economic Dimension General economic health Recent Trends Economic Dimension General economic health Consumer purchasing power Unemployment rate Interest rates Recent Trends Frequency of mergers and acquisitions Small business sector vitality

Legal-Political Dimension Federal, state, and local government regulations Political activities designed to influence company behavior

Natural Dimension Concern for the environment Concern for the environment The natural dimension has no voice Pressure comes from advocacy and managers Eliminate nonbiodegradable plastic bags from the environment Improving efficiency of plants and factories Investing in cleaner technologies

Changes in these various sectors can create new challenges… Task Environment Sectors that have a direct working relationship with the organization: Customers Competitors Suppliers Labor Market Changes in these various sectors can create new challenges…

Environmental Uncertainty Management must understand and adapt to changes

Adapting to the Environment Boundary-Spanning Roles: coordinating the organization with key elements in the external environment. Inter-organizational Partnerships: collaborating with other organizations. Mergers and Acqusitions: combination of two organizations. Joint Ventures: an alliance of organizations for a specific project.

Partnership Paradigm

The Internal Environment: Corporate Culture Corporate culture should match the needs of the external environment. The importance of corporate culture has been growing. Culture is a pattern of shared values “How things are done around here…”

Culture Symbols Stories Heroes Slogans Ceremonies

Environment and Culture The external environment influences culture. The internal environment should embody the requirements for success. Manager’s must pay attention to culture Recognize the ways culture can help or hurt your department.

Adaptive vs. Unadaptive Corporate Culture

Four Types of Corporate Culture

Combining Culture and Performance