The Environment and Corporate Culture_03

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

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Chapter 3
The Environment and Corporate Culture

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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

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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

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3.1 - The General, Task, and
Internal Environments
4

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3.2 Sample
External
Environment

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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

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Technological
Massive advancements in a specific
industry and society
Advances drive competition and help
innovative companies gain market share

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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

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Economic
Economic health of the country/region
Extended globally with uncertainty
Consumer purchasing power
Unemployment rate
Interest rates

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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

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Natural
Organizations must be sensitive to the
environment
Growing importance and pressure
Natural dimension does not have own
voice

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Natural
Environmental groups advocate
action/policy
Reduce pollution
Develop renewable energy
Global warming
Sustainable use of scarce resources

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3.3 Environmental
Performance Index

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Organization-Environment
Relationship
The environment creates uncertainty for
managers
Managers must respond and design
adaptive organizations
Uncertainty – managers do not have
sufficient information about environmental
factors to understand and predict
environmental needs and changes

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3.4 External Environment
and Uncertainty

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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

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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

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3.5 The Shift to a
Partnership Paradigm

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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

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3.6 Levels of Corporate
Culture

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3.7 Four Types of
Corporate Culture

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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

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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

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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

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3.8 Combining Culture
and Performance

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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