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The Environment &Corporate Culture

Chapter 2

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Learning Objectives1. Describe the general and task environments and the

dimensions of each.

2. Explain the strategies managers use to help organizations adapt to an uncertain or turbulent environment.

3. Define corporate culture and give organizational examples.

4. Explain organizational symbols, stories, heroes, slogans, and ceremonies and their relationship to corporate culture.

5. Describe how corporate culture relates to the environment.

6. Define a cultural leader and explain the tools a cultural leader uses to create a high performance culture.

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The External Organizational Environment

All elements existing outside the organization's boundaries that have the potential to affect the organization.

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External Environment’s Two Layers

Task environment. General environment.

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Employees Culture

Management

InternalEnvironment

Technological

Econom

icLegal/Political

Inte

rnat

iona

l

Sociocultural

General Environment

CustomersC

omp

etitors

Lab

or M

ark

et

Suppliers

Task Environment

Ex. 2.1 Location of the Organization’s General, Task, and Internal Environments

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Importance of International Dimension

Provides New: Customers Competitors Suppliers

Shapes: Social trends Technological trends Economic trends

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Technological Dimension

Includes scientific and technological advancements in specific industry and society at large.

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Socio-Cultural Dimension

Demographic characteristics as well as the norms, customs, and values of the general population.

Important characteristics are geographical and population density, age, and education levels.

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Socio-Cultural Dimension (contd.)

Key demographic trends in the United States: Hispanics will make up nearly a quarter of the U.S.

population by the year 2050. Population and the workforce continue to age with

the baby boomers. The fastest-growing living arrangement is single-

father households.

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Organization’s Economic Environment

Consumer purchasing power.

Unemployment rate. Interest rates. Frequency of mergers.

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Legal-Political Government regulations

Local State Federal

Considers political activities designed to influence company behavior.

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Task EnvironmentCustomers

A concern is the power the Internet has given customers.

This new found power enables customers to directly impact organizations in new ways.

Managers are using the Internet to learn about customers.

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Task EnvironmentCompetitors

Each industry is characterized by specific competitive issues.

Competitive wars are being waged worldwide in all industries.

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Task EnvironmentSuppliers

Many companies are now using fewer suppliers while trying to build better relationships.

Traditionally the role has been adversarial; many companies now are looking to cooperation.

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Task Environment Labor Market Factors

1. Growing need for computer-literate information technology workers.

2. The necessity for continuous investment in human resources in order to meet the borderless world.

3. The effects of international trading blocks, automation, and shifting plant locations.

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Ex. 2.3 Adapt toEnvironment

HighUncertainty

LowUncertainty

HighLowLow

High

Number of Factors in Organization Environment

Rate ofChange inFactors in

Environment

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Adapting to the Environment

Boundary-Spanning Inter-organizational Partnership Mergers & Joint Ventures

Preparing the organization for the environment.

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Ex. 2.5 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

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Visible Manifestations

Symbols Stories Heroes Slogans Ceremonies

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Ex. 2.7 Four Types of Corporate Cultures

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Cultural Leadership Influence

1. Cultural leadership articulates a vision for the organizational culture in which employees can believe.

2. Cultural leadership heeds the day-to-day activities that reinforce the cultural vision.