1. The Environment and Corporate Culture
Chapter 2
The Environment and Corporate Culture 1

2. General Environment
The layer of the external environment that affects the organization indirectly. 3

3. General Environment Technological Task Environment International
The layer of the external environment that directly influences the organization’s operations and performance.
Sociocultural
Legal/Political
Economic 9

4. Organization’s Internal Environment
General Environment
Technological
Task Environment
International
Customers
Sociocultural
Organization’s Internal Environment
Labor Market
Competition
Employees
Culture
Management
Suppliers
Legal/Political
Economic 14

5. The Organization-Environment Relationship

6. Three Strategies for Coping with High Uncertainty
1. Adapt the organization to the changes in the environment
2. Influence the environment to make it more compatible with organizational needs.
3. Moving from one environment to another (“Domain Shift”) 16

7. Adapting to the Environment
Boundary-spanning roles link and coordinate the organization with key elements in the external environment
Forecasting = spotting trends that enable managers to predict future events
Flexible structure---
Organic (non-bureaucratic) structure
Has few rules and regulations
Decentralized Decision Making 17

8. Mergers and Joint Ventures Also Reduce Uncertainty
Merger occurs when two or more organizations combine to become one
Joint venture is a strategic alliance by two or more organizations. 20

9. Influencing the Environment
Advertising
Public relations
Political activity
Trade associations 21

10. Domain Shifts Acquisitions Divestures New Product Creation
Old Product Discontinuance
Geographical Moves

11. Corporate Culture
Key values, beliefs, understandings, and norms shared by members of an organization. 22

12. Culture that can be seen at the surface level
Visible
Artifacts such as dress, office layout, symbols, slogans, ceremonies
Invisible
Expressed values such as “The Penney Idea,” “The H-P Way”
Underlying assumptions and deep beliefs such as “people are lazy and can’t be trusted”
Deeper values and shared understandings held by organization members. 27

13. Types of Cultures
There are many classification systems, including those based on:
Risk Tolerance
Communication Patterns
Types of Control
Coordination Techniques
Reward Systems
Open-Systems Focus 33

14. Four Types of Corporate Cultures

15. Four Types of Corporate Cultures
Fast-Changing External Environment
Adaptability Culture
Puts customers first, stressing innovation, risk taking,
Little stress on people, teamwork
Involvement Culture
Emphasizes employee participation in determining changes in response to the environment
Much stress on employee well-being,
teamwork

16. Four Types of Corporate Cultures
Stable External Environment
Achievement Culture
Puts customers first, stressing
competition, hard work
Consistency Culture
Emphasizes following rules, being careful

17. High-Performance Culture
Based on solid mission / clear agreed upon purpose
Fast changing environment provides opportunities
Has shared adaptive values
Employee involvement encouraged
(i.e., Balances needs of Customers and needs of Employees

18. Sources of Culture Founder Change Agents Experience
National, Regional Culture

19. Why Change a Culture? To keep up with the competition
To meet customer needs
Your company is doing poorly
Your company is growing rapidly

20. Maintaining/Changing Culture
Cultural Leadership
Communicate
Reward
Set Examples