1. Management 11e John Schermerhorn Chapter 4 Environment, Sustainability and Innovation

2. Planning Ahead — Chapter 4 Study Questions 1.What is the external environment of organizations? 2.What are key issues in organization- environment relationships? 3.What are the emerging challenges of sustainability and the environment? 4.How do organizations accomplish innovation?

3. Study Question 1: What is the external environment of organizations? The general or macroenvironment — all of the background conditions in the external environment of the organization including: Economic health of the economy Legal-political norms, customs, social values Socio-cultural philosophy/objectives of political party running the government Technological development and availability of technology Natural environment nature and conditions of environment

4. Figure 4.1 Starbucks general environment

5. Study Question 1: What is the external environment of organizations? The specific (task) environment - actual organizations, groups, and persons with whom an organization interacts and conducts business  Includes important stakeholders such as: CustomersSuppliersCompetitorsRegulatorsOwners

6. Study Question 2: What are key issues in organization-environment relationships?  Customer relationship management  establishes and maintains high standards of customer service in order to strategically build lasting relationships with and add value to customers  Supply chain management  strategic management of all operations relating to an organization’s resource suppliers

7. Figure 4.2 Multiple stakeholders in the environment of an organization

8.  Competitive advantage  a core competency that clearly sets an organization apart from competitors and gives it an advantage over them in the marketplace  Companies may achieve competitive advantage in many ways, including:  Products  Pricing  Customer service  Cost efficiency  Quality  Knowledge Study Question 2: What are key issues in organization-environment relationships?

9.  Customers want:  High quality  Low price  On-time delivery  Great service  Key customer service lessons:  Protect reputation for quality products  Treat customers right

10. Study Question 2: What are key issues in organization-environment relationships?  Environmental uncertainty  a lack of complete information regarding what exists and what developments may occur in the external environment  Two dimensions of environmental uncertainty:  Degree of complexity  Rate of change

11. Figure 4.3 Dimensions of uncertainty

12. Study Question 2: What are key issues in organization-environment relationships?  Organizational Effectiveness  sustainable high performance in using resources to accomplish mission and objectives Systems resource approach focuses on resource acquisition Internal process approach focuses on operations efficiency Goal approach focuses on accomplishing key objectives Strategic Constituencies focuses on stakeholder impact

13. Study Question 3: What are the emerging challenges of sustainability and the environment?  Sustainable development  makes use of environmental resources to support societal needs today while also preserving and protecting them for future generations  Three P’s of organizational performance Profit People Planet

14. Study Question 3: What are the emerging challenges of sustainability and the environment?  Environmental capital – natural resources used to sustain life and produce goods and services for society  Land  Water  Minerals  Green management – managing people and organizations in ways that preserve the natural environment  Reducing energy consumption  Minimizing environmental impact

15. Study Question 3: What are the emerging challenges of sustainability and the environment?  Human sustainability – concern for the effect of management practices on employee physical and psychological well-being  Health and wellness programs  Stress management  Minimizing work-family conflict  Control over work  Fair wages and opportunities

16.  Innovation - process of putting new ideas into practice  Business innovations  Product innovation  Process innovation  Business model innovation Study Question 4: How do organizations accomplish innovation?

17.  Sustainable innovations – reduce carbon footprints and environmental impacts of organizations, their practices and products  Social business innovations – find ways to use business models to address important social problems

18. Study Question 4: How do organizations accomplish innovation?  The innovation process Step 1 Imagining Step 2 Designing Step 3 Experimenting Step 4 Assessing Reverse innovation – innovation can come from any level in the organization or location

19.  Commercializing Innovation - turning new ideas into products services or processes to increase profits through  Greater sales  Reduced costs  3M’s process to develop Post-It Notes is a good example Study Question 4: How do organizations accomplish innovation?

20. Idea creation Initial experimentation Feasibility determination Final application Internal organizational sensitivity External environment and market sensitivity Example of commercializing innovation process

21. Study Question 4: How do organizations accomplish innovation?  Characteristics of innovative organizations  Strategy and culture  Structures  Systems  Staffing and management

22. Chapter 4 Case  Global Green USA: Greener cities for a cooler planet 22