Transcript Chapter One: - Universiti Putra Malaysia

Chapter 3
Corporate Culture and The Environment
The External Environment
The elements of the world constantly change
• The external organizational environment
includes all outside elements that effect the
organization
• General Environment:
– Outer layer that directly affects organization
• Task Environment:
– Sectors that conduct transactions with the
organization
• Internal Environment:
– Elements within the organization boundaries
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
2
3.1 The General, Task, and
Internal Environments
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
3
General Environment:
International
• Globalization influences all other aspects of the
external environment
– New competitors, customers, suppliers
– Changes in social, technological, and economic trends
• All organizations must compete and think globally
• Economic power has shifted to China and India
• The global environment is complex and everchanging
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
4
Technological
 Massive changes for
organizations
 The tool for doing business
 Advances are impacting
organizations and managers
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
5
Sociocultural
Demographic characteristics, norms,
customs, and values
 U.S. Population is aging
 Large influx of immigrants
 Generation Y is entering the
workplace
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
6
Economic
• Economic health of the country/region
– Extended globally with uncertainty
• Consumer purchasing power
• Unemployment rate
• Economic shift impacted small business
although there is still vitality in small business
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
7
Legal-Political
• Government regulation; state, local, and federal
– Political activities
– Government agencies and regulation
• Managers must recognize the power of pressure
groups
– Work to influence companies to behave in a socially
responsible way
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
8
Natural
• Growing importance and pressure
• Organizations must be sensitive to the
environment
• Natural dimension does not have own voice
• Environmental groups advocate action/policy
– Reduce pollution
– Develop renewable energy
– Climate change/global warming
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
9
Task Environment
 Customers
 Competitors
 Suppliers
 Labor Market
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
10
Organization-Environment
Relationship
 The environment creates
uncertainty for managers
 Managers must respond and
design adaptive organizations
 Uncertainty can be managed
through effectiveness
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
12
3.3 Sample External
Environment
SOURCES: “Chinese Ministry of Railways Chooses Nortel Mobile Network,” M2Presswire
(January 29, 2008); Nortel Web site, http:www.nortel.com (accessed May 12, 2010);
J. Weber with A. Reinhardt and P. Burrows, “Racing Ahead at Nortel,” BusinessWeek
(November 8, 1999): 93–99; “Nortel’s Waffling Continues: First Job Cuts, Then Product
Lines, and Now the CEO,” Telephony (May 21, 2001): 12; and M. Heinzl, “Nortel’s
Profits of 499 Million Exceeds Forecast,” The Wall Street Journal, January 30, 2004.
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
13
Adapting to the Environment
 Boundary-spanning roles – link and coordinate
the organization with external environment,
seek:
•
Business intelligence
•
Competitive intelligence
 Interorganizational partnerships – reduce
boundaries and begin collaborating with other
organizations
 Mergers/joint ventures – legal combination of
operations; legal collaboration for specific
project
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
15
3.5 The Shift to a
Partnership Paradigm
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
16
3.1 The General, Task, and
Internal Environments
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
17
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
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
18
3.6 Levels of Corporate Culture
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.
19