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Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.
Copyright © 2002 by South-Western, a division of Thompson Learning. All rights reserved.

2. Organizational Environment
Includes all elements existing outside the boundary of the organization that have the potential to affect the organization

3. Two Layers of the External Environment
Task environment
General environment

4. Organizational Environment
General Environment
Technological
Task Environment
Customers
International
Internal Environment
Sociocultural
Labor Market
Employees
Culture
Competitors
Management
Suppliers
Legal/Political
Economic

5. Importance of International Dimension
Provides New:
Customers
Competitors
Suppliers
Shapes:
Social trends
Technological trends
Economic trends

6. Socio-Cultural Dimension
Important characteristics are demographical and population density, age, and education levels,norms,values and customs of the population within which the organization exists.

7. Organization’s Economic Environment
Consumer purchasing power
Unemployment rate
Interest rates

8. Legal/Political
Includes forms of government and laws and regulations of the country in which the company operates.

9. Technological
Represents scientific and technological advancements in the industry.

10. Task environment
Customers
Competitors
Suppliers
Labour Market

11. Labor Market Forces Affecting Organizations
Growing need for computer literate information technology workers
The necessity for ongoing investment in human resources
International trading blocks
European Union: “European integration has delivered half a century of stability, peace and economic prosperity. It has helped to raise standards of living, built an internal market, launched the euro and strengthened the Union's voice in the world.”

12. Environmental Uncertainty
Managers don’t have sufficient information about environmental factors to understand and predict environmental needs and changes.

13. External Environment and Uncertainty
High
High
Uncertainty
Adapt to
Environment
Rate of
Change in
Factors in
Environment
Low
Uncertainty
Low
Low
High
Number of Factors in Organization Environment

14. Adopting to the Environment
Boundary-spanning
Inter-organizational partnerships
Mergers or joint ventures

15. Levels of Corporate Culture
Culture that can be seen at the surface level
Visible
1. Artifacts, such as dress, office layout, symbols, slogans, ceremonies
Invisible
2. Expressed values, such as “The Penney Idea,” “The HP Way”
3. Underlying assumptions and deep beliefs, such as “people are lazy and can’t be trusted”
Deeper values and shared understandings held by organization members

16. Visible Manifestations
Symbols
Stories
Heroes
Slogans
Ceremonies

17. Corporate Cultures Adaptive Culture Unadaptive Culture
Visible Behavior
Managers pay close attention to all their constituencies, especially customers, and initiate change when needed to serve their legitimate interests, even if it entails taking some risks.
Managers tend to behave somewhat insularly, politically, and bureaucratically. As a result, they do not change their strategies quickly to adjust to or take advantage of changes in their business environments.
Expressed Values
Managers care deeply about customers, stockholders, and employees. They strongly value people and processes that can create useful change (e.g., leadership initiatives up and down the management hierarchy).
Managers care mainly about themselves, their immediate work group, or some product (or technology) associated with that work group. They value the orderly and risk-reducing management process much more highly than leadership initiatives.
Source: John P. Kotter and Jmaes L. Heskett, Corporate Culture and Performance (New York, The Free Press, 1992), 51.

18. Four Types of Corporate Culture
Needs of the Environment
Flexibility
Stability
Adaptability Culture
Achievement Culture
External
Strategic Focus
Clan Culture
Bureaucratic Culture
Internal

19. Cultural Leadership
A cultural leader defines and uses signals and symbols to influence corporate culture.
Cultural leaders influence culture in two key areas:
Need to articulate a vision that employees can believe in and get excited about
Heeds the day to day activities that reinforce the cultural vision