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