1. The Environment and Corporate Culture
Chapter 3
The Environment and Corporate Culture

2. The External Environment
The elements of the world constantly change
The external organizational environment includes all outside elements that effect the organization
General Environment:
Outer layer that indirectly affects organization
Task Environment:
Sectors that conduct transactions with the organization
Internal Environment:
Elements within the organization boundaries
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3. 3.1 The General, Task, and Internal Environments
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4. General Environment: International
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
Economic power has shifted to China and India
The global environment is complex and ever- changing
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5. Technological Massive changes for organizations
The tool for doing business
Advances are impacting organizations and managers
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6. Demographic characteristics, norms, customs, and values
Sociocultural
Demographic characteristics, norms, customs, and values
U.S. Population is aging
Large influx of immigrants
Generation Y is entering the workplace
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7. Economic Economic health of the country/region
Extended globally with uncertainty
Consumer purchasing power
Unemployment rate
Economic shift impacted small business although there is still vitality in small business
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8. 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 in a socially responsible way
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9. Natural Growing importance and pressure
Organizations must be sensitive to the environment
Natural dimension does not have own voice
Environmental groups advocate action/policy
Reduce pollution
Develop renewable energy
Climate change/global warming
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10. Task Environment Customers Competitors Suppliers Labor Market
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11. Organization-Environment Relationship
The environment creates uncertainty for managers
Managers must respond and design adaptive organizations
Uncertainty can be managed through effectiveness
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12. 3.4 External Environment and Uncertainty
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13. Adapting to the Environment
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
Mergers/joint ventures – legal combination of operations; legal collaboration for specific project
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14. Production Technology Organisational Structure Physical Facilities
Internal Environment
Corporate Culture
Production Technology
Organisational Structure
Physical Facilities
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15. The Internal Environment: Corporate Culture
Culture is defined as the set of key values, beliefs, understandings, and norms that members of an organization share
Symbols
Stories
Heroes
Slogans
Ceremonies
Object, Act, or event that conveys meaning to others is called symbol.
Narrative based on true events is story.
Figure who exemplifies the deed, character, attributes of a strong culture is Hero.
Sayings to convey special meaning is Slogan.
Special event for the benefit of the audience is Ceremony.
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16. 3.6 Levels of Corporate Culture
Values and understanding shared by the members of the organisation are part of invisible culture.
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17. 3.7 Four Types of Corporate Cultures
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18. Shaping Corporate Culture for Innovative Response
Corporate culture plays a key role in learning and innovate responses
Bottom-line strategies are successful in the short-term
Successful companies balance culture and performance
Culture is the “glue” that holds the organization together
Innovative response to threats from the external environments, challenging new opportunities, or organisational crisis.
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19. Leaders communicate through words and actions
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
Leader defines and communicate the values the employees believe in and work on it.
Leader makes sure that work procedure and reward system match and reinforce the value.
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