Management 301 Chapter 3

External Organizational Environment
Includes all outside elements that affect the organization (competitors, resources, technology, economic conditions, task and general environment)
General Environment
Elements that affects organizations indirectly

– Technological
– Uses technology to manage store mobile apps
– Advances drive competition and help innovative companies gain market share
– Natural
– Greenhouse inventories to track emission trends, energy-efficient building design
– Sociocultural
– Focuses on bulk needs of families in suburban communities
– Wide ranges of customers
– Demographic characteristics, norms, customs, and values
– Widespread social equality
– Economic
– Negatively affected by economic slowdown
– Consumer purchasing power
– Interest rates
– Unemployment rates
– Susceptible to fluctuating currency exchange rates
– Legal/Political
– Government regulations
– Managers pushing for increase in government-mandated minimum wage
– Govt-required health insurance
– International
– Strong growth expected in Asian markets

Task Environment
Sectors that conduct transactions with the organization (customers, competitors, suppliers, labor markets)
Organizational Ecosystem
Formed by the interaction among a community of organizations in the environment (all sectors in task and general environments that provides resource and information transactions, flows, and linkages necessary for the organization to thrive)
Internal Environment
Elements within the organization boundaries (current employees, management, corporate culture)
International Dimentsion
Events originating in foreign countries

– New opportunities for U.S. companies in other countries
– New competitors, suppliers, customers
– New technological, social, and economic trends

Managers do not have sufficient information about environmental factors to understand and predict environmental needs and changes

– Managers must respond and design adaptive organizations

Boundary-spanning roles
Link and coordinate the organization with external environment. Seek:

– Business intelligence
– Big data analytics

Interorganizational partnerships
Reduce boundaries and begin collaborating with other organizations
Occurs when two or more organizations combine to become one
Joint ventures
Strategic alliance or program by two or more organizations
Corporate Culture
The set of key values, beliefs, understandings, and norms that members of an organization share such as:

– Symbols
– Stories
– Heroes
– Slogans
– Ceremonies

Visible Culture
Culture that can be seen at the surface level

– Dress, office layout, symbols, slogans, ceremonies

Invisible Culture
Culture which includes deeper values and shared understandings held by organization members
Adaptability Culture
External strategic focus and flexible needs of the environment
Achievement Culture
External strategic focus and stable needs of the environment
Involvement Culture
Internal strategic focus and flexible needs of the environment
Consistency Culture
Internal strategic focus and stable needs of the environment
Cultural Leadership
Defines and uses signals and symbols to influence corporate culture

– Articulate a vision for the organizational culture that employees can believe in
– Heeds the day-to-day activities that reinforce the cultural vision
– Leaders communicate through words and actions

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