© 2015 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

© 2015 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

© 2015 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 Organizational Ecosystem includes organizations In all sectors of the task and general environments that provide the resource and information transactions, flows, and linkages necessary for an organization to survive.

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  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 5

© 2015 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 power has shifted to China and India  The global environment is complex and ever-changing 6

© 2015 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

© 2015 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 C has woven technology into every aspect of life  U.S. population is aging  Growing diversity has implications for business 8

© 2015 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

© 2015 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 must recognize the power of pressure groups  Work to influence companies to behave in a socially responsible way 10

© 2015 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

© 2015 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

© 2015 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

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Customers  Competitors  Suppliers  Labor Market 14

© 2015 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

© 2015 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 16

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17

© 2015 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  Competitive intelligence  Interorganizational partnerships – reduce boundaries and begin collaborating with other organizations 18

© 2015 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 19

© 2015 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

© 2015 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 21

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23

© 2015 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 24

© 2015 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 performance  Culture is the “glue” that holds the organization together 25

© 2015 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 26

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27

© 2015 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 28