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

2. Planning Ahead — Chapter 4 Study Questions
What is the external environment of organizations?
What are key issues in organization-environment relationships?
What are the emerging challenges of sustainability and the environment?
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:
Customers
Suppliers
Competitors
Regulators
Owners

6. Customer relationship management
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
Study Question 2: What are key issues in organization-environment relationships?
Competitive advantage
a core competency that clearly sets an organization apart from competitors and gives it an advantage over them in the marketplace

9. Companies may achieve competitive advantage in many ways, including:
Study Question 2: What are key issues in organization-environment relationships?
Companies may achieve competitive advantage in many ways, including:
Products
Pricing
Customer service
Cost efficiency
Quality
Knowledge

10. Customers want: High quality Low price On-time delivery Great service
Study Question 2: What are key issues in organization-environment relationships?
Customers want:
High quality
Low price
On-time delivery
Great service

11. Key customer service lessons:
Study Question 2: What are key issues in organization-environment relationships?
Key customer service lessons:
Protect reputation for quality products
Treat customers right

12. Environmental uncertainty
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

13. Figure 4.3 Dimensions of uncertainty

14. Organizational Effectiveness
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

15. Sustainable development
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

16. Three P’s of organizational performance
Study Question 3: What are the emerging challenges of sustainability and the environment?
Three P’s of organizational performance
Profit
People
Planet

17. 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

18. Study Question 3: What are the emerging challenges of sustainability and the environment?
Green management – managing people and organizations in ways that preserve the natural environment
Reducing energy consumption
Minimizing environmental impact

19. 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

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

21. Study Question 4: How do organizations accomplish innovation?
Sustainable innovations – reduce carbon footprints and environmental impacts of organizations, their practices and products

22. Study Question 4: How do organizations accomplish innovation?
Social business innovations – find ways to use business models to address important social problems

23. 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

24. Study Question 4: How do organizations accomplish innovation?
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

25. Study Question 4: How do organizations accomplish innovation?
Idea creation
Initial experimentation
Feasibility determination
Final application
External environment and market sensitivity
Example of commercializing innovation process
Internal
organizational
sensitivity

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

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

28. For activities and assessments, please visit…