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Ch03 the environment and corporate culture

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  • 1. 0The Environment and Corporate Culture CHAPTER 3
  • 2. 0 Learning Objectives  Describe the general and task environments and the dimensions of each.  Explain the strategies managers use to help organizations adapt to an uncertain or turbulent environment.  Define corporate culture and give organizational examples.  Explain organizational symbols, stories, heroes, slogans, and ceremonies and their relationship to corporate culture.2 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 3. 0 Learning Objectives (contd.)  Describe how corporate culture relates to the environment.  Define a cultural leader and explain the tools a cultural leader uses to create a high- performance culture.3 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 4. 0 Organizational Environment  All elements existing outside the boundary of the organization that have the potential to affect the organization4 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 5. 0 External Environment ● General environment – affects indirectly ● Task environment - Affects directly - Influences operations and performances ● Internal environment – elements within the organization’s boundaries5 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 6. 0 Organizational Environments Exhibit 3.16 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 7. 0 International Dimension ● Portion of the external environment that represents events originating in foreign countries as well as opportunities for U.S. companies in other countries.7 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 8. 0 Technological Dimension  Scientific and technological advances – Specific industries – Society at large  Impact – Competition – Relationship with Customers – Medical advances – Nanotechnology advances8 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 9. 0 Socio-Cultural Dimension  Dimension of the general environment – Demographic characteristics – Norms – Customs – Values9 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 10. 0 Economic Dimension ● General economic health ● Consumer purchasing power ● Unemployment rate ● Interest rates ● Recent Trends ● Frequency of mergers and acquisitions ● Small business sector vitality10 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 11. 0 Legal-Political Dimension  Dimension of the general environment that includes federal, state, and local government regulations and political activities designed to influence company behavior.11 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 12. 0 Task Environment Sectors that have a direct working relationship with the organization ● Customers ● Competitors ● Suppliers ● Labor Market12 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 13. 0 Labor Market Forces Labor Market Forces Affecting Organizations today ● Growing need for computer literate information technology workers ● Necessity for ongoing investment in human resources – recruitment, education, training ● Effects of international trading blocks, automation, outsourcing, shifting facility locations upon labor dislocations13 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 14. 0 Adapting to the Environment  Boundary-spanning  Inter-organizational partnerships  Mergers and joint ventures14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 15. 0 External Environment and Uncertainty Exhibit 3.3 High Adapt to High Environment Rate of Uncertainty Change in Factors in Environment Low Uncertainty Low Low High Number of Factors in Organization Environment15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 16. 0 Interorganizational Partnerships Shift in paradigm to a partnership orientation ● Trust, value added to both sides ● Equity, fair dealing, everyone profits ● E-business links to share information and conduct digital transactions ● Close coordination; virtual teams and people on site ● Involvement in partner’s product design and production ● Long-term contracts ● Business assistance goes beyond the contract16 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 17. 0 Culture  The set of key values, beliefs, understandings, and norms that members of an organization share.17 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 18. 0 Levels of Corporate Culture Exhibit 3.5 Culture that can be Visible seen at the 1. Artifacts, such as dress, office surface layout, symbols, slogans, level ceremonies Invisible 2. Expressed values, such as “The Deeper values Penney Idea,” “The HP Way” and shared understandings 3. Underlying assumptions and deep held by beliefs, such as “people are lazy organization and can’t be trusted” members18 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 19. 0 Visible Manifestations  Symbols  Stories  Heroes  Slogans  Ceremonies19 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 20. 0 Environment and Culture  A big influence on internal corporate culture is the external environment  Cultures can vary widely across organizations  Organizations within same industry reveal similar cultural characteristics20 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 21. 0 Corporate Culture Adaptability Adaptive Culture Unadaptive Culture Visible Behavior Managers pay close attention to Managers tend to behave all their constituencies, especially somewhat insularly, politically, and customers, and initiate change bureaucratically. As a result, they when needed to serve their do not change their strategies legitimate interests, even if it quickly to adjust to or take entails taking some risks. advantage of changes in their business environments. Managers care deeply about Managers care mainly about Expressed Values customers, stockholders, and themselves, their immediate work employees. They strongly value group, or some product (or people and processes that can technology) associated with that create useful change (e.g., work group. They value the orderly leadership initiatives up and down and risk-reducing management the management hierarchy). process much more highly than leadership initiatives. Source: John P. Kotter and James L. Heskett, Corporate Culture and Performance (New York, The Free Press, 1992), 51.21 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 22. 0 Four Types of Corporate Cultures Exhibit 3.7 Needs of the Environment Flexibility Stability External Achievement Adaptability Culture Strategic Focus Culture Involvement Consistency Culture Culture Internal22 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 23. 0 High-Performance Culture A culture that  Is based on a solid organizational mission or purpose  Embodies shared adaptive values that guide decisions and business practices, and  Encourages individual employee ownership of both bottom-line results and the organization’s cultural backbone23 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.
  • 24. 0 Cultural Leadership ● Articulates a vision that employees can believe in ● Defines and communicates central values that employees believe in ● Values are tied to a clear and compelling mission, or core purpose ● Heeds the day-to-day activities that reinforce the cultural vision – work procedures and reward systems match and reinforce the values24 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved.

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