Management ch 03 the environment and corporate cultural

Ec onom ic Technological S oc io -C General Environment Task Environment Technological Suppliers... External Environment and UncertaintyAdapt to Environment High Uncertainty Low Uncertai

The Environment and

Organizational Environment

 All elements existing outside the boundary of the organization that have the potential to affect the organization

External Environment

● General environment – affects indirectly

● Task environment

- Affects directly

- Influences operations and performances

● Internal environment – elements within the

organization’s boundaries

Ec on

om ic

Technological

S oc io -C

General Environment

Task Environment

Technological

Suppliers

Key Demographic Trends in U.S.

● By 2050 non-Hispanic whites will make up only about half of the population, down from 74% in 1995; and 69% in 2004

● Baby boomer generation is aging and losing interest in

high-cost goods Generation Y, rival them in size, will soon rival them in buying power.

● The single father household is the fastest growing living

arrangement, which rose 62% in 10 years Two-parent and single-mother households are still much more numerous

● Unprecedented demographic shift = married couple households slipped from 80% in 1950s to just over 50% in 2003 Couples with kids= 25%, with projection 20% by 2010 and 30% of

homes inhabited by someone who lives alone.

Economic Dimension

● General economic health

● Recent Trends

Labor Market Forces

Labor Market Forces Affecting Organizations

today

technology workers

resources – recruitment, education, training

outsourcing, shifting facility locations upon labor dislocations

Adopting to the Environment

External Environment and Uncertainty

Adapt to Environment

High Uncertainty

Low Uncertainty

Low

High

Rate of Change in Factors in Environment

Competitive Intelligence - CI

 What - Activities to get as much information as possible about one’s rivals

 Where - Web sites, commercial databases,

financial reports, market activities, news clippings, trade publications, personal contacts

Interorganizational Partnerships

Shift in paradigm

● Trust, value added to both sides

● Equity, fair dealing, everyone profits

● E-business links to share information and conduct digital transactions

● Close coordination; virtual teams and people on site

● Involvement in partner’s product design and production

● Long-term contracts Business assistance goes beyond the contract

Levels of Corporate Culture

Visible

1 Artifacts, such as dress, office layout, symbols, slogans, ceremonies

2 Expressed values, such as “The Penney Idea,” “The HP Way”

3 Underlying assumptions and deep beliefs, such as “people are lazy and can’t be trusted”

Invisible

Culture that can be seen at the surface level

Deeper values and shared understandings held by

organization members

Environment and Culture

 A big influence on internal corporate culture

is the external environment

 Cultures can vary widely across

organizations

 Organizations within same industry reveal similar cultural characteristics

Corporate Culture Adaptability

Visible Behavior

Expressed Values

Managers pay close attention to all their constituencies, especially customers, and initiate change when needed to serve their legitimate interests, even if it entails taking some risks.

Managers tend to behave somewhat insularly, politically, and bureaucratically As a result, they

do not change their strategies quickly to adjust to or take advantage of changes in their business environments.

Managers care deeply about customers, stockholders, and employees They strongly value people and processes that can create useful change (e.g., leadership initiatives up and down the management hierarchy).

Managers care mainly about themselves, their immediate work group, or some product (or

technology) associated with that work group They value the orderly and risk-reducing management process much more highly than

Four Types of Corporate Cultures

Adaptability Culture

Achievement Culture

Consistency Culture

Involvement Culture

the cultural vision – work procedures and reward systems match and reinforce the values

High-Performance Culture

Creating and maintaining a high-performance culture in today’s turbulent environment and changing

workplace is not easy.

– Managers widely communicate their cultural values through their words and particularly their actions

– Value statements that are not reinforced by management behavior are meaningless or even harmful for employees and the organization

– Cultural leaders uphold their commitment to values during difficult times or crises.