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CHAPTER 3 LECTURE NOTES
1. General Environment (also called macro or social) environmental factors pp. 64-69
Model on p. 64, Slides 5-11
Technological, sociocultural, economic, legal/political, and
international (In a multinational company the general
environmental factors change with each country/region.)
2. Task Environment (also called competitive or micro) environmental factors. pp. 6972 Slide 12
Factors that affect how a company competes within an industry
competitors, suppliers, labor supply, and customers (See note following.)
Author shows customers, but customers are often shown at the core of the model,
served by the organization’s workers and owners/shareholders.
The model on page 72 of the text is only one way to model the environmental factors.
Where do the owners/shareholders belong in this model?
Another way to model environmental factors is to show the customer at the center—
called “The Customer Core.” (See next page.) In the next circle surrounding the customer
are employees and owners. Customers are directly served by employees (including
management) and the owners’ investment in the business(with an expectation of return on
the investment and earnings from the business). Then the next level, a larger circle are
environmental factors (comparable to the Task Environment in the textbook) including
suppliers, competitors, and labor market, as well as regulators. Although regulators are
in the legal arena, some are so pertinent to the day-to-day operations of businesses, that
they filter from the general environment to the task environment. The FDA for the
packaged food industries and pharmaceuticals are examples of regulators being in both
the general and task environments. Lastly, in the outer area are the general
environmental factors—economic, legal-political, socio-cultural, and technological. In
the “Customer Core” model international is not shown because according to the nation
where business is done, many of the environmental factors change.
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CUSTOMER
CORE
GENERAL ENVIRONMENT
ECONOMIC
LEGAL-POLITICAL
SOCIAL-CULTURAL
TECHNOLOGICAL
EMPLOYEES
AND OWNERS
TASK ENV.
SUPPLIERS,
COMPETITORS
LABOR MKT.
REGULATORS
GENERAL ENVIRONMENT
ECONOMIC
LEGAL-POLITICAL
SOCIAL-CULTURAL
TECHNOLOGICAL
3. The importance of the external environment on organizations and environmental
Forces pp. 72-85, model p. 72 Slides 13-15.
Uncertainty in the environment (general and task) is determined by the number
of factors in the organization’s environment and the rate of change in these
factors. Many industries are in more dynamic environments, and
flexibility is critical.
4. The internal environment and Organizational/Corporate Culture pp. 75-85 Slides 17 24
Some cultural factors are visible, others are invisible (p. 76)
The culture of an organization is shaped through stories, symbols, heroes, slogans,
and ceremonies. These evolve to form the attitudes, opinions, beliefs, and
values in an organization.
Culture is the “personality” of an organization—what it is like to work and do
business there.
Deal and Kennedy (ref. #58 in chapter, but not explained) classifies cultures
as Win-Win--Individual Performance (sales organizations for example),
You Bet Your Company (GE and others with long-term, high capital
investment projects), Work-Hard, Play-Hard (Xerox and most sales
organizations), and Process cultures (bureaucracies--government).
Other classifications on page 79 include the following:
Adaptability, Achievement, Involvement, and Consistency