Understanding Management First Canadian Edition Slides prepared by Janice Edwards College of the Rockies Copyright © 2009 Nelson Education Ltd. 1

The Environment and Corporate Culture Chapter 2 Chapter 2 The Environment and Corporate Culture Copyright © 2009 Nelson Education Ltd..

Learning Objectives 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. Copyright © 2009 Nelson Education Ltd..

The External Organizational Environment The External Organizational Environment All elements existing outside the organization's boundaries that have the potential to affect the organization. Copyright © 2009 Nelson Education Ltd..

External Environment’s Two Layers External Environment’s Two Layers General environment. Task environment. Copyright © 2009 Nelson Education Ltd..

Ex. 2.1 Location of the Organization’s General, Task, and Internal Environments

Importance of International Dimension Importance of International Dimension Provides new: Customers Competitors Suppliers Labour market Shapes: Sociocultural trends Technological trends Economic trends Copyright © 2009 Nelson Education Ltd..

Technological Dimension Technological Dimension Includes scientific and technological advancements in specific industry, and society at large. Copyright © 2009 Nelson Education Ltd..

Sociocultural Dimension Sociocultural Dimension Demographic characteristics, and the norms, customs, and values of the general population. Important characteristics are geographical distribution and population density, age, and education levels. Copyright © 2009 Nelson Education Ltd..

Sociocultural Dimension (Cont’d) Sociocultural Dimension (Cont’d) Key demographic trends in Canada: Visible minorities will make up 20% of the Canadian population by the year 2016. The baby boomers are approaching retirement and losing interest in high-cost goods. Traditional married couple households (mother, father, and children) have slipped from 55% in 1981 to 44% in 2001. Copyright © 2009 Nelson Education Ltd..

Organization’s Economic Environment Organization’s Economic Environment Influenced by: Consumer purchasing power Unemployment rate Interest rates Complexity creates uncertainty for managers Copyright © 2009 Nelson Education Ltd..

Legal-Political Environment Legal-Political Environment Influenced by: Government regulations Municipal Provincial Federal Considers political activities designed to influence company behaviour. Copyright © 2009 Nelson Education Ltd..

Task Environment: Customers Task Environment: Customers Customers have increased power via the Internet. Customers can directly impact organizations in new ways. Managers are using the Internet to learn about customers. Copyright © 2009 Nelson Education Ltd..

Task Environment: Competitors Task Environment: Competitors Each industry is characterized by specific competitive issues. Competitive wars are being waged worldwide in all industries. Copyright © 2009 Nelson Education Ltd..

Task Environment: Suppliers Task Environment: Suppliers Many companies are now using fewer suppliers while trying to build better relationships with them. Traditionally the role has been adversarial; many companies now are looking to cooperation. Copyright © 2009 Nelson Education Ltd..

Task Environment: Labour Market Factors Task Environment: Labour Market Factors Growing need for computer-literate information technology workers. The necessity for continuous investment in human resources in order to meet the demands of the borderless world. The effects of international trading blocs, automation, and shifting plant locations. Copyright © 2009 Nelson Education Ltd..

Ex. 2.3 The External Environment and Uncertainty Ex. 2.3 The External Environment and Uncertainty Copyright © 2009 Nelson Education Ltd.

Strategies to Adapt to the Environment Strategies to Adapt to the Environment Boundary-spanning roles Inter-organizational partnership Mergers & joint ventures Copyright © 2009 Nelson Education Ltd..

Ex. 2.5 Levels of Corporate Culture Copyright © 2009 Nelson Education Ltd..

Visible Manifestations of Corporate Culture Visible Manifestations of Corporate Culture Symbols Stories Heroes Slogans Ceremonies Copyright © 2009 Nelson Education Ltd..

Ex. 2.7 Four Types of Corporate Cultures Ex. 2.7 Four Types of Corporate Cultures Copyright © 2009 Nelson Education Ltd..

Cultural Leadership Influence Cultural Leadership Influence Cultural leadership articulates a vision for the organizational culture in which employees can believe. Cultural leadership heeds the day-to-day activities that reinforce the cultural vision. Copyright © 2009 Nelson Education Ltd..