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Fundamental of Management. Lecture 2

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Fundamental of Management.

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Fundamental of Management. Lecture 2

  1. 1. Lecture 3 Corporate Culture and The Environment
  2. 2. 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. 3. 3.1 The General, Task, and Internal Environments Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 3
  4. 4. 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 ever-changing Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 4
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 10. Task Environment  Customers  Competitors  Suppliers  Labor Market Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 10
  11. 11. 3.2 Environmental Performance Index Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 11
  12. 12. 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
  13. 13. 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
  14. 14. 3.4 External Environment and Uncertainty Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 14
  15. 15. 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
  16. 16. 3.5 The Shift to a Partnership Paradigm Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 16
  17. 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. 17
  18. 18. 3.6 Levels of Corporate Culture Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 18
  19. 19. 3.7 Four Types of Corporate Cultures Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 19
  20. 20. Shaping Corporate Culture for Innovative Response • Corporate culture plays a key role in learning and innovate responses • Bottom-line strategies are successful in the short-term • Successful companies balance culture and performance • Culture is the “glue” that holds the organization together Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 20
  21. 21. 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 Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 21
  22. 22. 3.8 Combining Culture and Performance Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 22
  23. 23. Cultural Leadership 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 Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 23

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