© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The elements of the world constantly change  The external organizational environment includes all outside elements that affect the organization  General environment:  Affects organizations indirectly 2

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Task environment:  Sectors that conduct transactions with the organization  Organizational ecosystem:  Formed by the interaction among a community of organizations in the environment  Internal environment:  Elements within the organization boundaries 3

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4

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 Managers must consider the international dimension  Events originating in foreign countries  New opportunities for U.S. companies in other countries  New competitors, suppliers, customers  New technological, social, and economic trends 6

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Massive advancements in a specific industry and society  Advances drive competition and help innovative companies gain market share 7

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Demographic characteristics, norms, customs, and values  Connected Generation or Generation Z has woven technology into every aspect of life  Widespread social equality  Growing diversity has implications for business 8

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Economic health of the country/region  Extended globally with uncertainty  Consumer purchasing power  Unemployment rate  Interest rates 9

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Government regulation; state, local, and federal  Political activities  Government agencies and regulation  Managers work with lawmakers, educating them about  products and services  legislation’s impact on their business strategies 10

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Organizations must be sensitive to the environment  Growing importance and pressure  Natural dimension does not have own voice 11

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Environmental groups advocate action/policy  Reduce pollution  Develop renewable energy  Global warming  Sustainable use of scarce resources 12

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  The environment creates uncertainty for managers  Managers must respond and design adaptive organizations  Uncertainty – managers do not have sufficient information about environmental factors to understand and predict environmental needs and changes 14

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Boundary-spanning roles – link and coordinate the organization with external environment, seek:  Business intelligence  Big Data analytics  Interorganizational partnerships – reduce boundaries and begin collaborating with other organizations 16

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Mergers – occurs when two or more organizations combine to become one  Joint ventures – strategic alliance or program by two or more organizations 17

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Corporate culture is the set of key values, beliefs, understandings, and norms that members of an organization share  Symbols  Stories  Heroes  Slogans  Ceremonies 19

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Corporate culture plays a key role in learning and innovate responses to:  Threats from the external environment  Challenging new opportunities  Organizational crises 22

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Bottom-line strategies are successful in the short term  Successful companies balance culture and business performance  Culture is the “glue” that holds the organization together 23

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Based on solid organizational mission/purpose  Shared adaptive values that guide decisions and practices  Encourages individual employee ownership  Bottom-line results  Organization’s culture 24

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Defines and uses signals and symbols to influence corporate culture  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 26