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