Chapter The Environment and Corporate Culture © 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 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 © 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 The External Environment Task environment: Sectors that conduct transactions with the organization Organizational ecosystem: Formed by the interaction among a community of organizations in the environment Internal environment: Elements within the organization boundaries © 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 3.1 - The General, Task, and Internal Environments © 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 3.2 Sample External Environment © 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 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 © 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 Technological Massive advancements in a specific industry and society Advances drive competition and help innovative companies gain market share © 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 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 © 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 Economic Economic health of the country/region Extended globally with uncertainty Consumer purchasing power Unemployment rate Interest rates © 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 Legal-Political 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 10 © 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 Natural Environmental groups advocate action/policy Reduce pollution Develop renewable energy Global warming Sustainable use of scarce resources 12 © 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 3.3 Environmental Performance Index 13 © 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 Organization-Environment Relationship The environment creates uncertainty for managers Managers must respond and design adaptive organizations Uncertainty – managers not have sufficient information about environmental factors to understand and predict environmental needs and changes 14 © 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 3.4 External Environment and Uncertainty 15 © 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 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 16 © 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 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 17 © 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 3.5 The Shift to a Partnership Paradigm 18 © 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 The Internal Environment: Corporate Culture Corporate culture is the set of key values, beliefs, understandings, and norms that members of an organization share Symbols Stories Heroes Slogans Ceremonies 19 © 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 3.6 Levels of Corporate Culture 20 © 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 3.7 Four Types of Corporate Culture 21 © 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 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 22 © 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 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 23 © 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 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 24 © 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 3.8 Combining Culture and Performance 25 © 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 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 Leaders communicate through words and actions 26 © 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