The Environment &
Corporate Culture
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Organizational Environment
• All elements existing outside the organization's
boundaries that have the potential to affect the
organization.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
External Environment’s
Two Layers
 Task environment.
 General environment.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Organizational
Environment
General Environment
Technological
Task Environment
Internal
Environment
Employees
Culture
Management
Competitors
Labor Market
Customers
Suppliers
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Importance of
International Dimension
Provides New:
– Customers
– Competitors
– Suppliers
Shapes:
– Social trends
– Technological trends
– Economic trends
Developed by Cool Pictures & MultiMedia Presentations
The WTO will dramatically change
the international dimension.
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Technological Dimension
• Includes scientific and
technological advancements in
specific industry and society at
large.
Today computers are practically
taken for granted as one of the
minimum tools for doing
business.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Socio-Cultural Dimension
• Demographic characteristics as well as the norms, customs, and values of
the general population.
• Important characteristics are geographical and population density, age, and
education levels.
• Key demographic trends in the United States:
 African Americans and 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 fastest-growing living arrangement is single-father households.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Organization’s
Economic Environment
• Consumer purchasing
power.
• Unemployment rate.
• Interest rates.
• Frequency of mergers.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Legal-Political
• Government regulations
– Local
– State
– Federal
• Considers political activities designed to influence
company behavior.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Task Environment
Customers
• A concern is the power the internet
has given customers.
• This new found power enables
customers to directly impact
organizations in new ways.
• Managers are using the internet to
learn about customers.
Employees and disgruntled customers
can quickly damage a firm’s reputation
and sales.
SOURCE:www.untied.com web site
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Task Environment
Competitors
• Each industry is characterized by specific
competitive issues.
• Part of the new workplace involves competitors
working together.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Task Environment
Suppliers
• Many companies are now using fewer suppliers
while trying to build better relationships.
• Traditionally the role has been adversarial many
companies are looking to cooperation.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Task Environment
Labor Market Factors
1. Growing need for computer-literate information
technology workers.
2. The necessity for continuous investment in human
resources in order to meet the borderless world.
3. The effects of international trading blocks,
automation, and shifting plant locations.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
External Environment and Uncertainty
High
High
Uncertainty
Adapt to and
Influence
Environment
Rate of
Change in
Factors in
Environment
Low
Uncertainty
Low
Low
High
Number of Factors in
Organization Environment
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Adapting to the Environment




Boundary-Spanning
Inter-organizational Partnership
Mergers & Joint Ventures
Flexible Structure
Preparing the organization
for the environment.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
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
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Visible Manifestations
•
•
•
•
•
Developed by Cool Pictures & MultiMedia Presentations
Symbols
Stories
Heroes
Slogans
Ceremonies
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Four Types of Corporate Culture
SOURCES: Based on Daniel R.
Denison and Aneil K. Mishra, “Toward
a Theory of Organizational Culture and
Effectiveness,” Organization Science 6
no. 2 (March-April 1995): 204-223;
Robert Hooijberg and Frank Petrock,
“On Cultural Change: Using the
Competing Values Framework to Help
Leaders Execute a Transformational
Strategy,” Human Resource
Management 32, no. 1 (1993): 29-50;
and R.E. Quinn, Beyond Rational
Management: Mastering the Paradoxes
and Competing Demands of High
Performance (San Francisco: JosseyBass, 1988).
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Cultural Leadership Influence
1. Cultural leadership articulates a vision for the
organizational culture in which employees can
believe.
2. Cultural leadership heeds the day-to-day activities
that reinforce the cultural vision.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.