1. The Environment and Corporate Culture
Chapter 2

2. The External Environment
The elements of the world constantly change
Environment encompasses all elements outside 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

3. The General Environment

4. General Environment: International
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, ever- changing, and uneven playing field

5. General Environment: Technological
Massive changes for all organizations
Technology has become the tool for doing business
Technology is driving innovation and competition
Advances are impacting organizations and managers

6. General Environment: Sociocultural
Demographic characteristics, norms, customs, and values
The Hispanic population is expected to increase 188%
Generation Y is flooding the workplace with new demands
Single-father households are the fastest-growing type of living arrangement
The U.S. population is continuing to age, companies create products and services for senior market

7. General Environment: Economic
Economic health of the country/region
Consumer buying power
Unemployment Rate
Interest Rates
The global environment has made economic environment complex and uncertain
The recent weakened U.S. economy has had a devastating impact on small businesses

8. General Environment: 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 socially responsible

9. 2010 Environmental Index

10. General Environment: Natural
Organizations must be sensitive to the earth’s diminishing resources
Plants, animals, rocks and natural resources
Natural dimension does not have its own voice
Environmental groups advocate action/policy
Reduce pollution
Develop renewable energy
Reduction of greenhouse gases

11. Task Environment
Customers
Competitors
Suppliers
Labor Market

12. External Environment at Nortel

13. External Environment and Uncertainty

14. Environmental Uncertainty
Uncertainty means that managers do not have complete information
When the environment changes rapidly, there is high uncertainty
Organizations must adapt, managers must be mindful
Open-minded, independent thinkers
Even in certain environments, managers need new ideas

15. Adapting to the Environment
Boundary-spanning roles
Interorganizational partnerships
Mergers/joint ventures
Shift from adversarial orientation to partnership orientation

16. The Shift to a Partnership Paradigm

17. 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

18. Levels of Corporate Culture

19. Four Types of Corporate Cultures

20. Shaping Corporate Culture for Innovative Response
Important to attract, motivate, and retain talented employees
Plays a key role in organization climate toward learning and innovation
Successful companies balance culture and business performance
Shaping and guiding employee behavior

21. Combining Culture and Performance

22. Leaders communicate through words
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