BUSI 310 - Ch. 3: The Organizational Environment and Culture

What are examples of actions and attitudes that provide excellent customer service?

1. Speed of filling and delivering orders 2. Meeting emergency needs 3. Merchandise delivered in good condition 4. Taking back and replacing defective products 5. Installation and repair services / parts 6. Fair service charges

What are the four approaches to organizational structure that companies take to manage uncertainty?

1. Stable and Complex structure 2. Dynamic and Complex structure 3. Stable and Simple structure 4. Dynamic and Simple structure

What two conditions must be present in order for cooperative strategies to make sense?

1. Taking joint action will reduce the organization's costs and risks 2. Cooperation will increase the organization's power

What are five pieces of advice for making useful forecasts?

1. Use multiple forecasts 2. Accuracy diminishes further into the future 3. Collect data carefully 4. Use simple forecasts 5. Surprise events may sabotage the predictions

What are the three layers of organizational culture?

1. Visible Artifacts 2. Values 3. Unconscious Assumptions

Final Consumer

A customer who buys a product for the purpose of use.

An externally oriented and flexible culture is known as an _____________________________?

Adhocracy

External Environment

All relevant forces outside the organization's boundaries, including customers, partners, and suppliers.

Scenarios

Future possibilities (favorable, unfavorable, or middle-ground) that help managers develop contingency plans for what they might do given different outcomes.

Internal Environment

Refers to all relevant forces inside a firm's boundaries, such as its managers, employees, resources, and organizational culture.

Regulators / Regulatory Agencies

Specific government organizations, such as the FCC and the FDA, in a firm's more immediate task environment.

Demographics

Statistical characteristics of a group or population.

Unconscious Assumptions

Strongly held and taken-for-granted beliefs that influence people's behavior in the firm.

Open Systems

Systems that are affected by and in turn affect their external environments.

Merger / Acquisition

Takes place when two or more firms combine, or one firm buys another, to form a single company.

Smoothing

Taking action to level normal fluctuations at the boundaries of the environment.

Values

The underlying qualities and desirable behaviors that are important to the organization.

Cooptation

Absorbing new elements into the organization's leadership structure to avert threats to its stability or existence.

What are the characteristics of a stable and complex organization?

- Decentralized - Bureaucratic - Standardized skills

What are three ways to adapt to the external environment?

1. Adapt 2. Influence 3. Select a New Environment

What are the characteristics of a stable and simple organization?

1. Centralized 2. Bureaucratic 3. Standardized work processes

What are the characteristics of a dynamic and simple organization?

1. Centralized 2. Organic 3. Direct supervision

What are the six ways that managers can influence their environment?

1. Competitive Aggression 2. Competitive Pacification 3. Public Relations 4. Voluntary Action 5. Legal Action 6. Political Action

What are the two factors that contribute to uncertainty?

1. Complexity 2. Dynamism

What are three types of cooperative strategies?

1. Contracts 2. Cooptation 3. Coalition

What are four things that can give clues about company culture?

1. Corporate mission statements and official goals 2. Business practices 3. Symbols, rites, and ceremonies 4. The stories people tell

What are three ways that a company can effectively manage culture?

1. Craft an inspirational vision of "what can be" 2. "Walk the talk" 3. Celebrate and reward members who follow the desired company culture

What are the characteristics of a dynamic and complex organization?

1. Decentralized 2. Organic 3. Mutual adjustment

According to the competing-values model of culture, what are the two juxtaposing spectrums that company culture tends to align itself along?

1. Flexible Processes vs. Control-Oriented Processes 2. Internal Maintenance vs. External Positioning

What are five common barriers to entry?

1. Government Policy 2. Capital Requirements 3. Brand Identification 4. Cost Disadvantages 5. Distribution Channels

What are the two steps to effectively competing with rivals?

1. Identify the competition 2. Analyze how they compete

What are the five components of the macroenvironment?

1. Laws and Regulations 2. Economy 3. Technology 4. Demographics 5. Social Values

What three general considerations help guide management's response to their environment?

1. Managers need to change what matters and can be changed 2. Managers should use the most appropriate response 3. Managers should pursue options that maximize benefit and lower cost.

What kinds of resources do suppliers provide?

1. People 2. Raw Materials 3. Information 4. Financial Capital

What are Porter's Five Forces (the five components of the competitive environment)?

1. Rivals 2. New Competitors 3. Power of Customers 4. Substitute Products or Services 5. Power of Suppliers

Empowerment

A form of decentralized authority in which top-level management gives lower-level managers the authority to make decisions that benefit the firm.

What is a complement product?

A product that is a potential opportunity because customers tend to buy more of it alongside the company's product.

What is a substitute product?

A product that is a threat because customers can use it as an alternative.

Forecasting

An attempt to predict more precisely the changes in and the future values of important variables.

An internally oriented and flexible company culture is known as a _____________________________?

Clan culture

Defenders

Companies that stay within a more limited, stable product domain.

Intermediate Consumers

Consumers who buy raw materials or wholesale products and then sell the finished products to final consumers.

Buffering

Creating supplies of excess resources to meet unpredictable needs.

Political Action

Efforts to influence elected representatives to create a more favorable business environment or limit competition.

Legal Action

Engaging the company in a private legal battle.

Public Relations

Establishing and maintaining favorable images in the minds of people in the environment.

Competitive Aggression

Exploiting a distinctive competence or improving internal efficiency for competitive advantage.

Barriers to Entry

Factors that prevent new companies from entering an industry.

For a company, an environment is attractive if there are ______________ competitors and unattractive if there are ______________ competitors.

Few; many

Switching Costs

Fixed costs buyers face if they change suppliers.

Coalition

Groups that act jointly on political initiatives.

An internally oriented and control-focused company culture is known as a ___________________________?

Hierarchical culture

Benchmarking

Identifying the best-in-class performance by a company in a given area and then comparing your processes with the benchmark company's processes.

Environmental Uncertainty

The idea that managers do not have enough information about the environment to understand or predict the future.

Competitive Pacification

Independent action to improve relations with competitors.

For a company, an environment is attractive if there are ____________ suppliers (who have ____________ bargaining power) and unattractive if there are _____________ suppliers (who have ____________ bargaining power).

Many, low; Few, high

For a company, an environment is attractive if there are _____________ customers (who have ____________ bargaining power) and unattractive if there are _____________ customers (who have ____________ bargaining power).

Many, low; Few, high

An externally oriented and control-focused culture is known as a ___________________________?

Market culture

Environmental Scanning

Monitoring events in the environment by searching and sorting through information.

Contracts

Negotiating an agreement between the organization and another group to exchange goods, services, information, patents, and so on

Divestiture

Occurs when a company sells one or more businesses.

Diversification

Occurs when a firm invests in different types of businesses or products or when it expands geographically to reduce its dependence on a single market or technology.

Flexible Processes

Processes that allow for adaptation in their technical core.

Competitive Environment

The closer, more immediate environment consisting of rivalry among existing competitors and the threat of new entrants.

Prospectors

The companies most likely to engage in strategic maneuvering.

Visible Artifacts

The components of an organization that can be seen and hard, such as office layout, dress, orientation, stories, and written material.

Dynamism

The degree of discontinuous change that occurs within the industry.

Domain Selection

The entrance by a company into another suitable market or industry.

Competitive Intelligence

The information necessary to decide how best to manage in the competitive environment.

Supply Chain Management

The management of the entire network of facilities and people that obtain raw materials from outside the organization, transform them into products, and distribute them to customers.

Macroenvironment

The most comprehensive external environment, which includes the general elements that potentially can affect strategic decisions.

Complexity

The number of issues to which a manager must attend, and the degree to which they are interconnected.

Organizational Culture

The set of assumptions about the organization and its goals and practices that members of the company share.

Voluntary Action

Voluntary commitment to various interest groups, causes, and social problems.

Independent Strategies

When a company acts on its own to influence stakeholders or change some aspect of its current environment.

Strategic Maneuvering

When organizations redefine or change which environment they are in.

Cooperative Strategy

When two or more organizations work together to influence the environment.

For a company, an environment is attractive if there are ________________ entry barriers (a __________ threat) and unattractive if there are ________________ entry barriers (a _____________ threat).

many, low; few, high

For a company, an environment is attractive if there are ___________ substitutes and unattractive if there are ___________ substitutes.

few; many

Company cultures can either be __________________ or ____________________.

strong; weak