Organizational Environments and Cultures PDF

CHAPTER Three Part B  Characteristics of Changing External Environments Environmental Change Environmental Complexity Resource Scarcity Uncertainty 1   Environmental Change is the rate at which a company’s environments change ◦ sta...

CHAPTER Three Part B  Characteristics of Changing External Environments Environmental Change Environmental Complexity Resource Scarcity Uncertainty 1   Environmental Change is the rate at which a company’s environments change ◦ stable environments ◦ dynamic environments  Punctuated equilibrium theory ◦ companies cycle through stable and dynamic environments 1.1   Environmental Complexity: the number of external factors in the environment that affect organizations ◦ Simple environments  have few environmental factors ◦ Complex environments  have many environmental factors 1.2   Resource scarcity is the degree to which an organization’s external environment has an abundance or scarcity of critical organizational resources 1.3   Uncertainty is how well managers can understand or predict the external changes and trends affecting their businesses 1.4 6 CHAPTER TWO  Exhibit 2.2 Environmental Uncertainty Environmental Complexity, Environmental Change, & Resource Scarcity Environmental High Uncertainty Medium Low Environmental Complexity Environmental Change Resource Scarcity 1.4 Environmental Characteristics  Organization Specific Environment General Environment 2   Economy  Technological  Sociocultural  Political / Legal 2   Growing vs. shrinking economies  Future economic activity is difficult to predict  Business confidence indices ◦ show how confident managers are about future business growth 2.1  Technology-- Input Knowledge Output Tools Techniques Raw Products Materials Information Services 2.2   Sociocultural Components ◦ Demographic changes ◦ Changes in behavior, attitudes, and beliefs 2.3  Managers must be educated about the laws, regulations, and potential lawsuits that could affect business  Legislation  Regulations  Court decisions 2.3   Customer  Competitor  Supplier  Industry regulation  Advocacy group 3  Monitoring customer wants and needs is critical for business success  Reactive customer monitoring  responding to problems, trends, and events  Proactive customer monitoring  anticipating problems, trends, and events 3.1  Competitive Analysis Deciding who your competitors are Anticipating competitors’ moves Determining competitors’ strengths and weaknesses 3.2  The Ten Commandments for Ethical Decision Making Thou Shalt … Not lie when representing yourself Observe the company’s legal guidelines Not tape-record a conversation Not bribe Not plant eavesdropping devices Not deliberately mislead anyone in an interview Not obtain nor give price information to a competitor Not swap misinformation Not steal a trade secret Not press someone for information if it may jeopardize that 3.2 person’s job or reputation  Buyer Suppliers Supplier Dependence Dependence Opportunistic Behavior Relationship Behavior 3.3   Consists of regulations and rules that govern the business practices and procedures of specific industries, businesses, and professions 3.4   Groups of concerned citizens who band together to try to influence the business practices of specific industries, businesses, and professions  Techniques to try to influence companies  public communications  media advocacy  product boycotts 3.5  Environmental Scanning Evaluating Interpreting External Environmental Factors Environments Acting on Threats and Opportunities 4   Environmental scanning: searching the environment for events or issues that might affect an organization  Scanning the environment:  keeps companies current on industry factors  reduces uncertainty  alters organizational strategies  contributes to organizational performance 4.1   Managers determine what environmental events and issues mean to the organization  Opportunities  Threats 4.2   Managers have to decide how to respond to these environmental factors  Cognitive maps  simplified models of external environments  depicts how managers believe environmental factors relate to possible organizational actions 4.3  Internal environment consists of the trends and events within an organization that affect the management, employees, and organizational culture  important because it affects what people think, feel, and do at work  organizational culture is the set of key values, beliefs, and attitudes shared by organizational members  Company Founder Organizational Stories Organizational Heroes 5.1  Adaptability Consistency Involvement Clear Vision Sales Employee Growth Satisfaction Return on Profits Quality Assets 5.2   Corporate history helps employees and managers understand the people, and events, and changes that shaped a company  Preserves culture and values  Gets people involved in the culture of a company 5.2   Symbolic artifacts 1. Surface SEEN  Behaviors Level  What people say 2. Expressed Values  How decisions HEARD and Beliefs are made  Beliefs and 3. Unconsciously assumptions Held Assumptions BELIEVED  Rarely discussed and Beliefs 5.3  The beliefs and values of Starbucks Coffee ◦ success has to be shared ◦ people are the most significant component ◦ a culture of meaning and loyalty ◦ grassroots decision making   Behavioral addition ◦ is the process of having managers and employees perform a new behavior  Behavioral substitution ◦ is having managers and employees perform a new behavior in place of another behavior  Change visible artifacts ◦ such as the office design and layout, company dress codes, etc. 5.3 1. discuss how changing environments affect organizations. 2. describe the four components of the general environment. 3. explain the five components of the specific environment. 4. describe the process that companies use to make sense of their changing environments. You are the CEO of McDonald’s…  Sales are declining, stores are closing  Competitors are stronger  Food quality is dropping, food preferences have changed  Service is rude and inaccurate How can you deal with these external and internal problems and turn them into opportunities?