The Environment and Corporate Culture Chapter 3 The Environment and Corporate Culture
The External Environment The elements of the world constantly change The external organizational environment includes all outside elements that effect the organization General Environment: Outer layer that directly affects organization Task Environment: Sectors that conduct transactions with the organization Internal Environment: Elements within the organization boundaries Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
3.1 The General, Task, and Internal Environments Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
General Environment: International Globalization influences all other aspects of the external environment New competitors, customers, suppliers Changes in social, technological, and economic trends All organizations must compete and think globally Economic power has shifted to China and India The global environment is complex and ever- changing Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
Technological Massive changes for organizations The tool for doing business Advances are impacting organizations and managers Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
Demographic characteristics, norms, customs, and values Sociocultural Demographic characteristics, norms, customs, and values U.S. Population is aging Large influx of immigrants Generation Y is entering the workplace Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
Economic Economic health of the country/region Extended globally with uncertainty Consumer purchasing power Unemployment rate Economic shift impacted small business although there is still vitality in small business Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
Legal-Political Government regulation; state, local, and federal Political activities Government agencies and regulation Managers must recognize the power of pressure groups Work to influence companies to behave in a socially responsible way Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
Natural Growing importance and pressure Organizations must be sensitive to the environment Natural dimension does not have own voice Environmental groups advocate action/policy Reduce pollution Develop renewable energy Climate change/global warming Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
Task Environment Customers Competitors Suppliers Labor Market Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
Organization-Environment Relationship The environment creates uncertainty for managers Managers must respond and design adaptive organizations Uncertainty can be managed through effectiveness Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
3.4 External Environment and Uncertainty Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
Adapting to the Environment Boundary-spanning roles – link and coordinate the organization with external environment, seek: Business intelligence Competitive intelligence Interorganizational partnerships – reduce boundaries and begin collaborating with other organizations Mergers/joint ventures – legal combination of operations; legal collaboration for specific project Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
The Internal Environment: Corporate Culture Corporate culture is the set of key values, beliefs, understandings, and norms that members of an organization share Symbols Stories Heroes Slogans Ceremonies Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
3.6 Levels of Corporate Culture Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
3.7 Four Types of Corporate Cultures Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
Shaping Corporate Culture for Innovative Response Corporate culture plays a key role in learning and innovate responses Bottom-line strategies are successful in the short-term Successful companies balance culture and performance Culture is the “glue” that holds the organization together Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
Leaders communicate through words and actions Cultural Leadership Articulate a vision for the organizational culture that employees can believe in Heeds the day-to-day activities that reinforce the cultural vision Leaders communicate through words and actions Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.