We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!
Presentation is loading. Please wait.
Published byCandace Willis
Modified about 1 year ago
Organizational Environments and Cultures3 © 2012 Cengage Learning
discuss how changing environments affect organizations describe the four components of the general environment explain the five components of the specific environment describe the process that companies use to make sense of their changing environments explain how organizational cultures are created and how they can help companies be successful © 2012 Cengage Learning
External Environmentsdiscuss how changing environments affect organizations describe the four components of the general environment explain the five components of the specific environment describe the process that companies use to make sense of their changing environments External environments are the forces and events outsides a company that have the potential to influence or affect it. © 2012 Cengage Learning
Environmental Change The rate at which a company’s general and specific environments change. Stable slow rate of change Dynamic fast rate of change © 2012 Cengage Learning
Punctuated Equilibrium TheoryStability Dynamic Change Dynamic Change Dynamic Change Although you might think that a company’s external environment would be either stable or dynamic, research suggests that companies often experience both. According to punctuated equilibrium theory, companies go through long, simple periods of stability (equilibrium) during which incremental changes occur, followed by short, complex periods of dynamic, fundamental change (revolutionary periods), which end with a return to stability (new equilibrium) Stability © 2012 Cengage Learning
Environmental ComplexitySimple few environmental factors that affect organizations Complex many environmental factors that affect organizations Environmental complexity refers to the number and intensity of factors in the external environment that affect organizations. Simple environments have few environmental factors that affect organizations, whereas complex environments have many environmental factors that affect organizations. © 2012 Cengage Learning
Resource Scarcity The abundance or shortage of critical resources in an organization’s external environment. © 2012 Cengage Learning
Uncertainty The extent to which managers can understand or predict the external changes and trends affecting their business. © 2012 Cengage Learning
Environmental Change, Environmental Complexity, and Resource Scarcity© 2012 Cengage Learning
General Environment General environment Specific environmentthe economy and the technological, sociocultural, and political/legal trends that indirectly affect all organizations Specific environment unique to a firm’s industry directly affects the way its conducts daily business © 2012 Cengage Learning
General and Specific Environments© 2012 Cengage Learning
Economy A growing economy provides a favorable environment for business growth. Business confidence indices show how confident managers are about future business growth. © 2012 Cengage Learning
Technological ComponentTechnology an umbrella term for the knowledge, tools, and techniques used to transform inputs into outputs Changes in technology can help companies provide better products or produce their products more efficiently. © 2012 Cengage Learning
Sociocultural ComponentDemographic characteristics, general behavior, attitudes, and beliefs of people in a particular society © 2012 Cengage Learning
Demographics: Percentage of Married Women (with Children) Who Work© 2012 Cengage Learning
Political/Legal ComponentThe legislation, regulations, and court decisions that govern and regulate business behavior Many managers are unaware of the potential legal risks associated with traditional managerial decisions like recruiting, hiring, and firing employees. © 2012 Cengage Learning
Specific Environment Customers Competitors SuppliersIndustry regulations Advocacy groups © 2012 Cengage Learning
Customer Component Reactive customer monitoringIdentifying and addressing customer trends and problems after they occur Proactive customer monitoring Identifying and addressing customer needs, trends, and issues before they occur Customers purchase products and services. Companies cannot exist without customer support. Monitoring customers’ changing wants and needs is therefore critical to business success. There are two basic strategies for monitoring customers: reactive and proactive. © 2012 Cengage Learning
Competitor Component Competitors Competitive analysiscompanies in the same industry that sell similar products or services Competitive analysis a process of monitoring the competition that involves identifying competition, anticipating their moves, and determining their strengths and weaknesses Surprisingly, managers often do a poor job of identifying potential competitors because they tend to focus on only two or three well-known competitors with similar goals and resources. Another mistake managers may make when analyzing the competition is to underestimate potential competitors’ capabilities. When this happens, managers don’t take the steps they should to continue to improve their products or services. © 2012 Cengage Learning
Supplier Component Suppliers Supplier dependence vs. Buyer dependencecompanies that provide material, human, financial, and informational resources to other companies Supplier dependence vs. Buyer dependence © 2012 Cengage Learning
Behaviors Opportunistic behavior Relationship behaviorwhen one party benefits at the expense of another Relationship behavior focuses on establishing a mutually beneficial, long-term relationship between buyers and sellers How important is relationship behavior? Researchers examined the relationships between auto suppliers and eight major automakers in Japan, Korea, and the United States and found that, in cases where a lack of trust existed between suppliers and buyers, procurement costs could be as much as five times higher than when parties trusted one another. Furthermore, the least-trusted companies were often the least profitable. © 2012 Cengage Learning
Industry Regulation ComponentRegulations and rules that govern the practices and procedures of specific industries, businesses, and professions © 2012 Cengage Learning
Federal Regulatory Agencies and CommissionsConsumer Product Safety Commission Department of Labor Environmental Protection Agency Equal Employment Opportunity Commission Federal Communications Commission Federal Reserve System Federal Trade Commission Food and Drug Administration National Labor Relations Board Occupational Safety and Health Administration Securities and Exchange Commission Consumer Product Safety Commission Reduces risk of injuries and deaths associated with consumer products, sets product safety standards, enforces product recalls, and provides consumer education Department of Labor Collects employment statistics and administers labor laws concerning safe working conditions, minimum hourly wages and overtime pay, employment discrimination, and unemployment insurance Environmental Protection Agency Reduces and controls pollution through research, monitoring, standard setting, and enforcement activities Equal Employment Opportunity Commission Promotes fair hiring and promotion practices Federal Communications Commission Regulates interstate and international communications by radio, television, wire, satellite, and cable Federal Reserve System As nation’s central bank, controls interest rates and money supply and monitors the U.S. banking system to produce a growing economy with stable prices Federal Trade Commission Restricts unfair methods of business competition and misleading advertising; enforces consumer protection laws Food and Drug Administration Protects nation’s health by making sure food, drugs, and cosmetics are safe National Labor Relations Board Monitors union elections and stops companies from engaging in unfair labor practices Occupational Safety and Health Administration Saves lives, prevents injuries, and protects the health of workers Securities and Exchange Commission Protects investors in the bond and stock markets, guarantees access to information on publicly traded securities, and regulates firms that sell securities or give investment advice © 2012 Cengage Learning
Advocacy Groups Concerned citizens who band together to try to influence the business practices of specific industries, businesses, and professions Public communication Media advocacy Product boycott The public communications approach relies on voluntary participation by the news media and the advertising industry to send out an advocacy group’s message. Media advocacy is much more aggressive than the public communications approach. A media advocacy approach typically involves framing the group’s concerns as public issues (affecting everyone); exposing questionable, exploitative, or unethical practices; and forcing media coverage by buying media time or creating controversy that is likely to receive extensive news coverage. A product boycott is a tactic in which an advocacy group actively tries to persuade consumers not to purchase a company’s product or service. © 2012 Cengage Learning
Environmental ScanningSearching the environment for important events or issues that might affect an organization. Managers scan the environment to reduce uncertainty. Organizational strategies affect environmental scanning. Environmental scanning contributes to organizational performance. © 2012 Cengage Learning
Interpreting Environmental FactorsThreat or opportunity? Threat managers typically take steps to protect the company from further harm Opportunity managers consider strategic alternatives for taking advantage of those events to improve performance © 2012 Cengage Learning
Acting on Threats and Opportunities: Cognitive MapsBecause it is impossible to comprehend all the factors and changes, managers often rely on simplified models of external environments called cognitive maps. Cognitive maps summarize the perceived relationships between environmental factors and possible organizational actions. For example, the cognitive map shown in Exhibit 3.4 represents a small clothing store owner’s interpretation of her business environment. The map shows three kinds of variables. The first set of variables, shown in blue rectangles, are environmental factors, such as a Wal-Mart or a large mall 20 minutes away. The second set of variables, shown in green ovals, are actions that the store owner might take: follow a low-cost strategy; a good value, good service strategy; or a large selection of the latest fashions strategy. The third set of variables, shown in gold trapezoids, are company strengths (low employee turn-over) and weaknesses (small size). The plus and minus signs on the map indicate whether the manager believes there is a positive or negative relationship between variables. For example, the manager believes that a low-cost strategy won’t work because Wal-Mart and Target are nearby. Offering a large selection of the latest fashions won’t work either—not with the small size of the store and that large mall nearby. However, the manager believes that a good value, good service strategy can lead to success and profits because of the store’s low employee turnover, good knowledge of customers, and reasonable selection of clothes at reasonable prices. © 2012 Cengage Learning
Internal Environments5. explain how organizational cultures are created and how they can help companies be successful Internal environments consist of the trends and events within an organization that affect the management, employees, and organizational culture. Internal environments are important because they affect what people think, feel, and do at work. The key component in internal environments is organizational culture, or the set of key values, beliefs, and attitudes shared by members of the organization. © 2012 Cengage Learning
Creation and Maintenance of Organizational CulturesPrimary source of organizational culture is the company founder. Organizational culture is sustained by… organizational stories organizational heroes © 2012 Cengage Learning
Keys to an Organizational Culture that Fosters SuccessAdaptability is the ability to notice and respond to changes in the organization’s environment. Company mission is the business’s purpose or reason for existing. In an organizational culture that includes a clear company mission, the organization’s strategic purpose and direction are apparent to everyone in the company. Finally, in a consistent organizational culture, the company actively defines and teaches organizational values, beliefs, and attitudes. Consistent organizational cultures are also called strong cultures because the core beliefs are widely shared and strongly held. © 2012 Cengage Learning
Three Levels of Organizational CultureAs shown in Exhibit 3.6, organizational cultures exist on three levels. On the first, or surface, level are the elements of an organization’s culture that can be seen and observed, such as symbolic artifacts (e.g., dress codes and office layouts) and workers’ and managers’ behaviors. Next, just below the surface, are the values and beliefs expressed by people in the company. You can’t see these values and beliefs, but they become clear if you carefully listen to what people say and observe how decisions are made or explained. Finally, unconsciously held assumptions and beliefs about the company are buried deep below the surface. These are the unwritten views and rules that are so strongly held and so widely shared that they are rarely discussed or even thought about unless someone attempts to change them or unknowingly violates them. Changing such assumptions and beliefs can be very difficult. Instead, managers should focus on the parts of the organizational culture they can control. These include observable surface-level items, such as workers’ behaviors and symbolic artifacts, and expressed values and beliefs, which can be influenced through employee selection. © 2012 Cengage Learning
Changing Organizational CulturesBehavioral addition Behavioral substitution Change visible artifacts Hiring people with values and beliefs consistent with desired culture Corporate cultures are very difficult to change. Consequently, there is no guarantee that any one approach—changing visible cultural artifacts, using behavioral substitution, or hiring people with values consistent with a company’s desired culture—will change a company’s organizational culture. The best results are obtained by combining these methods. Together, these are some of the best tools managers have for changing culture because they send the clear message to managers and employees that “the accepted way of doing things” has changed. © 2012 Cengage Learning
Charlie Wilson’s War This chapter discussed organizational culture as having three levels of visibility. Visible artifacts are at the first level and are the easiest to see. Which visible artifacts did you observe in this sequence? Values appear at the next level of organizational culture. You can infer a culture’s values from the behavior of organizational members. Which values appear in this sequence? Organizational members will unconsciously behave according to the basic assumptions of an organization’s culture. You also infer these from observed behavior. Which basic assumptions appear in this sequence? “Good-Time” Charlie Wilson (Tom Hanks) is a Democratic Congressman from East Texas with a reputation for partying, drinking, and womanizing. When Afghanistan rebels against the Soviet troop invasion in the 1980s, Wilson becomes the unlikely champion of the Afghan cause through his role in two major congressional committees that deal with foreign policy and covert operations. Julia Roberts plays the Houston socialite and conservative political activist Joanne Herring, who urges Wilson to help the rebels. Wilson’s covert dealings with the rebels have some unforeseen and long-reaching effects, however. In this clip from the beginning of the movie, Charlie Wilson is at work in the Capitol Building, on his way to chambers where he’s about to cast a vote. © 2012 Cengage Learning
Camp Bow Wow What aspects of Camp Bow Wow’s corporate culture reflect the surface level of the organizational culture? What aspects reflect the values and beliefs? What aspects reflect the unconsciously held assumptions and beliefs. Why did Camp Bow Wow have to change its culture when it became a national franchise? 3. What impact does Heidi Ganahl’s personal story have on employees at Camp Bow Wow? Camp Bow Wow In ten years, Camp Bow Wow has grown from a single kennel in Denver, Colorado to a $40 million dollar business, with more than 150 locations. The transition from a small family business to a national chain, however, required a shift from a family-based culture to a business- and performance-based culture. A key element of of Camp Bow Wow’s culture is the staff’s deep emotional connection with animals. The connection is immediately apparent at corporate headquarters, where offices are bustling with employees and pets alike. According to founder Heidi Ganahal, “What we do is focus on what’s important to us, and that’s the animals.” © 2012 Cengage Learning
Chapter 3 Organizational Environments and Culture
Chapter 3 Organizational Environments and Cultures Dr. Ellen A. Drost
Chapter 3 Organizational Environments and Cultures
Chapter 3 Organizational Environments and Culture Management Principles Craig W. Fontaine, Ph.D.
Chapter 2 Organizational Environments and Cultures.
1 Designed & Prepared by B-books, Ltd. MGMT Chuck Williams Chapter 3 Organizational Environments and Cultures.
©2008 by Nelson, a division of Thomson Canada Limited 1 Management Second Canadian Edition Chuck Williams Alex Z. Kondra Conor Vibert Slides Prepared by:
Effective Management, by Williams South-Western College Publishing Copyright © 2002 Chapter 2 Organizational Environments and Cultures.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 1 CHAPTER TWO CHAPTER TWO Management 3rd Edition Chuck Williams Organizational.
Chapter 3 Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved Changing Environments 1 Environmental Change Environmental.
Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Chapter 2 Organizational Environments and Cultures.
Chapter 3 Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 1 Organizational Environments and Cultures Prepared by.
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 1 CHAPTER TWO CHAPTER TWO Organization Environments and Culture Prepared.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1 COMP5331: Web Pub and Web Ad 8. External Analysis Dickson K.W. Chiu PhD, SMIEEE.
1 Chapter 2 with Duane Weaver Constraints on Managers: Organizational Culture and the Environment.
Copyright ©2011 by Cengage Learning. All rights reserved 1 Designed & Prepared by B-books, Ltd. MGMT3 Chuck Williams Chapter 3 Organizational Environments.
Chapter 3 ORGANIZATIONAL CULTURE AND ENVIRONMENT: THE CONSTRAINTS
MGMT 370. Figure 2.1 Organizations that are affected by, and that affect, their environment.
CHAPTER 2 The Environment and Culture of Organizations.
CHAPTER 2 Strategic Planning and the Marketing Environment
The External Environment and Organizational Culture Chapter 02 Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
The Global Marketing Environment. Learning Objectives After studying this chapter, you should be able to: Understand the nature of the marketing environment.
PRINCIPLES OF STRATEGIC MANAGEMENT Environmental Scanning and Strategy Formulation.
CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
Chapter 2 The Environment and Culture of Organizations
The Environment of Management
The External Environment
C H A P T E R © 2007 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin The Global Marketing Environment 2.
Managing in the Global Environment
ORGANIZATIONAL CULTURE AND ENVIRONMENT: THE CONSTRAINTS
Chapter 3 The Organization and Its Environment
Chapter 2: The External Environment: Opportunities, Threats, Industry Competition and Competitor Analysis Overview: The firm’s external environment.
Chapter 3 Organizational Environments and Cultures New Orleans Paper Google Work Walmart Supply FedEX McDonalds Moscow.
Managing in the Global Environment Chapter Four Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Environment of Organizations and Managers
©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
MGNT428 – Business Policy & Strategy Dr. Tom Lachowicz, Instructor
Robert E. Hoskisson Michael A. Hitt R. Duane Ireland
Chapter 2 Situation & Environmental Analysis. COPYRIGHT © 2002 Thomson Learning, Inc. All rights reserved. Components of a Situation Analysis... Internal.
Strategic Management Concepts and Cases
PowerPoint Presentation by Charlie Cook Copyright © 2005 South-Western. All rights reserved. Chapter 2 The Management Environment.
Chapter 2: Constraints and Challenges for the Global Manager
PowerPoint Presentation by Charlie Cook Copyright © 2003 South-Western/Thomson Learning. All rights reserved. Environment: Culture, Ethics, and Social.
Chapter 3 – Understanding Internal & External Environments
© 2006 by South-Western, a division of Thomson Learning. All rights reserved. 2-1 The Environment & Corporate Culture Chapter 2.
Key Environments Marketing Environment
© 2017 SlidePlayer.com Inc. All rights reserved.