MANAGEMENT
RICHARD L. DAFT
The Environment and
Corporate Culture
CHAPTER 3
chapter3
Learning Outcomes
• Describe the general and task environments and the dimensions
of each.
• Explain the strategies managers use to help organizations adapt to
an uncertain or turbulent environment.
• Define corporate culture and give organizational examples.
• Explain organizational symbols, stories, heroes, slogans, and
ceremonies and their relationship to corporate culture.
• Describe how corporate culture relates to the environment.
• Define a cultural leader and explain the tools a cultural leader uses
to create a high-performance culture.
3
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chapter3
Are You Fit for Managerial
Uncertainty?
• The environment in which businesses
operate are increasingly dynamic
• Some managers cannot respond to
environmental surprises
• In an uncertain environment, managers
need to facilitate new thinking, new ideas
and new ways of working
4
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chapter3
External Environment
● General environment – affects indirectly
● Task environment
- Affects directly
- Influences operations and performances
● Internal environment – elements within the
organization’s boundaries
5
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chapter3
International Dimension
• Events originating
● Portion ofinthe
foreign
external
countries
environment that
• Impacts allrepresents
aspects ofevents
the external
environment
originating in foreign
countries as well as
– New competitors
opportunities for U.S.
– New customers
companies in other
countries.
– New suppliers
• Today, all companies globally
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6
chapter3 Technological Dimension
• Scientific and technological advances
– Specific industries
– Society at large
• Impact:
– Organizations
– Managers
– Customers
•
•
•
•
•
•
•
•
•
Desktop computers
Networks
Internet Access
Handheld devices
Videoconferencing
Cell phones
Laptop
WiFi
Medical advances
7
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chapter3 Socio-Cultural Dimension
• Dimension of the general
environment
• Today’s demographics
– Demographic
are the foundation
of thecharacteristics
– Norms
future workforce
– Norms
– Customs
– Values
• Demographic
trends
affect organizations
globally
–
–
–
–
–
–
Customs
Values of population
Geographical Distribution
Population Density
Age
Education Levels
8
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Economic Dimension
● General economic health
● Consumer purchasing power
● Unemployment rate
● Interest rates
● Recent Trends
● Frequency of mergers and
acquisitions
● Small business sector vitality
9
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chapter3 Legal-Political Dimension
• Federal, state, and local government
regulations
• Political activities designed to
influence company behavior
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chapter3
Natural Dimension
• Concern for the environment
• The natural dimension has no voice
• Pressure comes from advocacy and managers
– Eliminate nonbiodegradable plastic bags from the
environment
– Improving efficiency of plants and factories
– Investing in cleaner technologies
11
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Task Environment
Sectors that have a direct working relationship with
the organization:
 Customers
 Competitors
 Suppliers
Changes in
these various
sectors can
create
tremendous
challenges…
 Labor Market
12
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External Environment
13
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Environmental Uncertainty
Management
must adapt to
changes
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Adapting to the
Environment
• Boundary-Spanning Roles: coordinating
the organization with key elements in the
external environment
• Interorganizational Partnerships:
collaborating with other organizations
• Mergers: combination of two
organizations
• Joint Ventures: an alliance of
organizations for a specific project
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15
chapter3
Partnership Paradigm
16
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The Internal Environment:
Corporate Culture
• Corporate culture should match the needs
of the external environment
• The importance of corporate culture has
been growing
• Culture is a pattern of shared values
• “how things are done”
17
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•
•
•
•
•
Culture
Symbols
Stories
Heroes
Slogans
Ceremonies
18
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chapter3 Environment and Culture
• The external environment influences
culture
• The internal environment should embody
the requirements for success
• Manager’s must pay attention to culture
– Recognize the ways culture can help or hurt
your department
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Adaptive vs. Unadaptive
Corporate Culture
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Four Types of
Corporate Culture
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Shaping Corporate Culture
for Innovative Response
How people are treated increases
a company’s value
Culture attracts, motivates and
retains talent
Corporate culture enables learning
and innovation
22
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Combining Culture and
Performance
23
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Cultural Leadership
• Articulate a vision for the organizational culture
that employees can believe in
• The cultural leader heeds the day-to-day
activities that reinforce the cultural vision
• Managers communicate the cultural values
through words and actions
• Cultural leaders uphold their commitment to
values during difficult times
24
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