Chapter 3The Environment and Culture of OrganizationsChapter 3The Environment and Culture of OrganizationsThe Organization’s Environments- External environment a) General environmenti) Economic, legal, political, socio-culture, international, and technical forcesb) Task environmenti) Specific groups and organizations that affect the firm- Internal environmenta) Conditions and forces present and at work within an organizationThe External Environment- The general environment a) The set of board dimensions and forces in an organization’s surroundings that create its overall contexti) Economic dimension(1) The overall health and vitality of the economic system in which the organization operatesii) Technological dimension(1) The methods available for converting resources into products or servicesiii) Sociocultural dimension(1) The customs, mores, values, and demographic characteristics of the society in which the organization functionsiv) Political-legal dimension(1) The extent of government regulation of business and the general relationship between business and governmentv) International dimension(1) Interacting with global economy - Dimensions of the Task Environmenta) Specific groups affecting the organizationi) Competitors seeking the same resources as the organizationii) Customers who acquire an organization’s products or resourcesiii) Suppliers that provide resources for the organizationiv) Regulators control legislate or influence the organization’s policies or practices(1) Regulatory agencies(2) Interest groupsv) Strategic partners (allies) who are in a joint venture or partnership with the organizationThe Internal Environment- Conditions and stakeholder forces within an organizationa) Owners are persons with legal property rights to a businessb) Board of directors are elected by the stockholders and are charged with overseeing the general management of the firm to ensure that it is run in a way that best serves the stockholders’ interestc) Employees are persons who work for the firm and have vested interest in its continued operation and existenced) Physical work environment is the actual physical environment of the organization and the work that people doThe Organization’s Culture- The importance of Organization Culturea) Culture determines the overall “feel” of the organization, although it may vary across different segments of the organizationb) Culture is a powerful force that can shape the firm’s overall effectiveness and long-term success- Determinants of Organizational Culturea) Organization’s founder (personal values and beliefs) b) Symbols, stories, heroes, slogans, and ceremonies that embody and personify the spirit of the organizationc) Shared experiences that bond organizational members togetherd) Corporate success that strengthens the culturee) Why would someone want to be in one organization over another? Culturei) Culture = A&Mii) Subculture = A&M Galvestoniii) Culture can also push people away – not integratedOrganizational Culture- Managing Organizational culturea) Understand the current culture to understand whether to maintain or change itb) Articulate the culture through slogans, ceremonies, and shared experiencesc) Reward and promote people whose behaviors are consistent with desired cultural values- Changing Organizational Culturea) Develop a clear idea of what kind of culture you want to createb) Adopt new slogan, stories, ceremonies, and purposely break with traditionc) Bring outsider to important management positioni) I.e., Coach Sumlin d) The bigger the company, the harder it is to change its culturee) Mergers or acquisitions i) Movie clip – Chinese company takes over and wants company to exercise, etc(1) Merged with a French company(2) Culture shiftedHow Environments Affect Organizations- Change and Complexitya) Environmental change occurs in two ways:i) Degree to which change in environment is occurringii) Degree of homogeneity or complexity of the environmentb) Uncertaintyi) A driving force that influences organizational decisionsii) Stable: easier to make- Environmental Turbulencea) Unexpected changes and upheavals in the environment of an organizationb) Crisis is the most common form of turbulence i) I.e., all of data has been destroyedEnvironmental Change, Complexity an UncertaintySimpleLeastUncertaintySubwayModerateUncertaintyClothingManufacturersModerateUncertaintyGMMostUncertaintyAT&TComplexStable Dynamic-A lot of technology places are in most uncertainty-Moderate uncertainty: clothing - a lot of change, but can still only wear so muchPorter’s Five Competitive Forcesa) Threat of new entrantsa) Extent to and erase with which competitors can enter marketb) B&N vs. Amazonc) Easy for new thing to pop upb) Competitive rivalrya) Competitive rivalry between firms in an industryb) What their offering or not offering c) Threat of substitute productsa) Extent to which alternative products/services may replace the need for existing products/servicesd) Power of buyersa) Extent to which buyers influence market rivalse) Power of Suppliersa) Extent to which suppliers influence market rivalsb) When there’s more product availability, your prices dropi) Monitor: brings in infoii) Disseminator: shares itA(n) _______ would come under the heading of the economic element of the general environment.a. Increase in unemploymentMake sure we know this aspectDegree of HomogeneityDegree of
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