Chapter 2: The Environment: Made up of the General and task Environments
Task Environment
4 External Sectors: Customers Competitors, suppliers, Labor Market
The General Environment- 6 Decisions
Affects all organizations indirectly: International, Technological, Sociocultural, Economic, Legal-Political, Natural
International Dimension
All organizations must compete and think globally (ever-changing). Economic power has shifted to China and India
Cultural Leadership
Defines and uses signals and symbols to influence corporate culture. Leaders communicate through words and actions. Embraces the day-to-day activities that reinforce the cultural vision.
Sociocultural Dimension
Demographic characteristics, norms, customs, and values Growing diversity (Age, education, race, etc) has implications for business
Economic Dimension
Economic health of the country/region Consumer purchasing power, unemployment rate, and interest rate
Legal-Political Dimension
Government regulation; state, local, and federal. Managers must recognize the power of pressure groups.
Natural Dimension
Growing importance and pressure for organizations to be sensitive to environments. (Pollution, Global Warming, Renewable energy)
External Environment
Includes all the things outside of a business that can impact its success
internal environment
Includes all things located inside of an organization that impacts its success. Made up of Employees, Management, and Corporate Culture
Technological Dimension
Massive advancements in a specific industry and society. Advances drive competition and help innovative companies gain market share.
environmental uncertainty
Must respond and design adaptive organizations. Uncertainty
High Performance Culture
Shared adaptive values that guide decisions and practices. Based on solid organizational mission/purpose. Encourages individual employee ownership.
Labor Market
Those that provide labor both skilled and unskilled
Competitors
Those who compete for your resources
Suppliers
Those who provide inputs (i.e raw materials)
Customers (Task Environment)
Those who use/pay for your products or services
Corporate Culture
culture is the set of key values, beliefs, understandings, and norms that members of an organization share (i.e Symbols, Stories, Slogans)
Adapting to the environment
inter-organizational Partnerships, Mergers, Outsourcing
Levels of Corporate Culture
visible- dress, office, symbols, slogans invisible- values, mission, vision