Chapter 3 - Organizational Culture

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The elements of the world constantly change
All outside elements that affect the
organization
General environment: Affects organizations
indirectly
Task environment: Sectors that conduct
transactions with the organization
Organizational ecosystem: Formed by the
interaction among a community of
organizations in the environment
Internal environment: Elements within the
organization boundaries
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Globalization influences all other aspects of the
external environment
New competitors, customers, suppliers
Changes in social, technological, and economic
trends
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All organizations must compete and think
globally
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Economic power has shifted to China and India
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The global environment is complex and everchanging
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Massive scientific & technological
advancements in a specific industry and
society
 Massive changes for org. & industries
 Drive competition and help innovative
companies gain market share
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Examples: Internet access, smart phone,
laptop, videoconference, etc.
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Demographic characteristics, norms,
customs, and values
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Connected Generation or Generation C
has woven technology into every aspect
of life
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U.S. population is aging
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Growing diversity has implications for
business
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Economic health of the country/region
Extended globally with uncertainty
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Consumer purchasing power
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Unemployment rate  inflation
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Interest rates – Discount rate, federal funds
rate, prime rate
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Government regulations; state, local, and
federal government agencies
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Political activities
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Managers must recognize the power of
pressure groups (interest groups)
Work to influence companies to behave in a
socially responsible way
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Organizations must be sensitive to the
environment
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Growing importance and pressure
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Natural dimension does not have own voice
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Environmental groups advocate action/policy
Reduce pollution
Develop renewable energy
Global warming
Sustainable use of scarce resources
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Customers
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Competitors
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Suppliers
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Labor Market
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The environment creates uncertainty for
managers
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Managers must respond and design
adaptive organizations
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Uncertainty – managers do not have
sufficient information about environmental
factors to understand and predict
environmental needs and changes
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Boundary-spanning roles – link and coordinate the
organization with external environment, seek:
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Business intelligence
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Competitive intelligence
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Interorganizational partnerships – reduce
boundaries and begin collaborating with other
organizations
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M& A (Mergers & Acquisitions) – occurs when two
or more organizations combine to become one
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Joint ventures – strategic alliance or program by
two or more organizations
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Corporate culture is the set of key values, beliefs,
understandings, and norms that members of an
organization share
Symbols
Stories
Heroes
Slogans
Ceremonies
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Comparative Study b/w Korean Corporate
Culture & American Corporate Culture in
the Automobile Industry
Impacts of cultural differences on supply
chain management (SCM).
 SCM is considered a key to success of
Hyundai. Is it really true? We want to
investigate the real stories.
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Adaptability C.  autonomy
 Adaptability vs. Achievement
= flexibility vs. stability
 Involvement
 Consistency
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© 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.
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Corporate culture  attracting, motivating,
and keeping good employees
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People (employees) & how they are treated
 Increasing the firm value the most
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Corporate culture plays a key role in learning
and innovate responses to threats from the
external environment, challenging new
opportunities, or organizational crises
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Bottom-line strategies are successful in the short
term
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Successful companies balance culture and
performance
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Culture is the “glue” that holds the organization
together
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Based on solid organizational mission/purpose
Shared adaptive values that guide decisions and
practices
Encourages individual employee ownership of:
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 Bottom-line results
 Organization’s culture
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Defines and uses signals and symbols to
influence corporate culture
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Articulate a vision for the organizational
culture that employees can believe in
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Heeds the day-to-day activities that
reinforce the cultural vision
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Leaders communicate through words and
actions
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