Management 12e richard draft chapter 03

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Chapter 3 The Environment and Corporate Culture... May not be scanned, copied or

© 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3 The Environment and Corporate Culture

The External Environment

The elements of the world constantly change

 The external organizational environment includes all outside

elements that affect the organization

 General environment:

 Affects organizations indirectly

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The External Environment

3.1 - The General, Task, and Internal

Environments

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3.2 Sample

External

Environment

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General Environment: International

 Managers must consider the international dimension

 Events originating in foreign countries

 New opportunities for U.S companies in other countries

 New competitors, suppliers, customers

 New technological, social, and economic trends

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Technological

 Massive advancements in a specific industry and society

 Advances drive competition and help innovative companies gain market share

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Sociocultural

Demographic characteristics, norms,

customs, and values

 Connected Generation or Generation Z has woven technology into

every aspect of life

 Widespread social equality

 Growing diversity has implications for business

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Economic

 Economic health of the country/region

 Extended globally with uncertainty

 Consumer purchasing power

 Unemployment rate

 Interest rates

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 Government regulation; state, local, and federal

 Political activities

 Government agencies and regulation

 Managers work with lawmakers, educating them about

 products and services

 legislation’s impact on their business strategies

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Natural

 Organizations must be sensitive to the environment

 Growing importance and pressure

 Natural dimension does not have own voice

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3.3 Environmental

Performance Index

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Organization-Environment Relationship

 The environment creates uncertainty for managers

 Managers must respond and design adaptive organizations

 Uncertainty – managers do not have sufficient information about

environmental factors to understand and predict environmental needs

and changes

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3.4 External Environment

and Uncertainty

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Adapting to the Environment

 Boundary-spanning roles – link and coordinate the organization with

external environment, seek:

 Business intelligence

 Big Data analytics

 Interorganizational partnerships – reduce boundaries and begin

collaborating with other organizations

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Adapting to the Environment

 Mergers – occurs when two or more organizations combine to become

one

 Joint ventures – strategic alliance or program by two or more

organizations

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3.5 The Shift to a

Partnership Paradigm

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The Internal Environment: Corporate Culture

Corporate culture is the set of key values, beliefs, understandings, and

norms that members of an organization share

3.6 Levels of Corporate Culture

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3.7 Four Types of

Corporate Culture

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Shaping Corporate Culture for Innovative

Response

 Corporate culture plays a key role in learning and innovate responses to:

 Threats from the external environment

 Challenging new opportunities

 Organizational crises

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Managing the High-Performance Culture

 Bottom-line strategies are successful in the short term

 Successful companies balance culture and business performance

 Culture is the “glue” that holds the organization together

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High-Performance Culture

 Based on solid organizational mission/purpose

 Shared adaptive values that guide decisions and practices

 Encourages individual employee ownership

 Bottom-line results

 Organization’s culture

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3.8 Combining Culture

and Performance

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Cultural Leadership

Defines and uses signals and symbols to influence corporate culture

 Articulate a vision for the organizational culture that employees can

believe in

 Heeds the day-to-day activities that reinforce the cultural vision