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Organizational Environment
Includes all elements existing outside the boundary of the organization that have the potential to affect the organization
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Two Layers of the External Environment
Task environment General environment
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Organizational Environment
General Environment
Technological
Task Environment
tiona l
Customers
l ultura Socioc
Inter na
Labor Market
Internal Environment Employees Culture
Competitors
Management
Le
Suppliers
ga l/P ol iti
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l
o Ec
n
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ic
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Importance of International Dimension
Provides New: Customers Competitors Suppliers Shapes: Social trends Technological trends Economic trends
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Socio-Cultural Dimension
Important characteristics are geographical and population density, age, and education levels. Key demographic trends in the United States: Hispanics will make up nearly a quarter of the U.S. population by the year 2050. Population and the workforce continue to age with the baby boomers. The single father is the fastest growing living arrangement. The U.S. will continue to receive large numbers of immigrants especially from Asia and Mexico.
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Organization's Economic Environment Consumer purchasing power Unemployment rate Interest rates
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Labor Market Forces Affecting Organizations 1. Growing need for computer literate information technology workers 2. The necessity for ongoing investment in human resources 3. 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."
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External Environment and Uncertainty
High High Uncertainty
Adapt to Environment
Rate of Change in Factors in Environment
Low Uncertainty Low Low
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High
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Number of Factors in Organization Environment
Adopting to the Environment
Boundary-spanning Inter-organizational partnerships Mergers or joint ventures
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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
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Visible Manifestations Symbols Stories Heroes Slogans Ceremonies
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Corporate Cultures
Adaptive 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 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).
Unadaptive Culture
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...