Chapter 3: Organizational environments and cultures

Cognitive Map

Cognitive maps can help managers depict how environmental factors related to possible organizational actions. Creating a cognitive map usually occurs after managers have scanned the environment for events or issues that might affect the organization. Simply listing the threats and opportunities do not show a relationship--positive or negative--between the possible actions and environmental factors.

Surface level

Seen - Symbolic artifact such as dress codes - Workers' and managers' behaviors

To be effective, an organization's culture must _________ the external environment

respond to

4 Components of Business Environment

1. Shareholders 2. Competitors 3. Buyers/ Customers 4. Laws and Regulations

Chinese mining companies supply 97% of the rare-earth materials used in manufacturing television screens. When China announced a decrease in exports of rare-earth materials, Hitachi, a Japanese company, was concerned about a shortage of materials. This is an example of: A. relationship behavior. B. supplier dependence. C. buyer dependence.

B. supplier dependence. Supplier dependence is the degree to which a company relies on a supplier because of the importance of the supplier's product to the company and the difficulty of finding other sources of that product. Hitachi was forced to find another source for the materials needed to produce television screens.

At Aplia, Post-It® notes are used to create "idea boards" or "wallstorms," which reflect the value Aplia places on brainstorming and creativity.

Element of Culture: ARTIFACTS such as Post-It® notes are the physical objects that represent an aspect of an organization's culture.

At your local auto repair shop, people talk about Owen, the legendary auto mechanic who stripped an entire car to find an electrical problem.

Element of Culture: HERO When people hold others up as role models, they are using heroes such as Owen to embody an organization's values. Heroes can be real or mythical, and their actions show others what is expected of them.

In your company, people talk about making deliveries, even on days when the weather was so bad that the post office didn't deliver mail, as a way of emphasizing the value of customer service.

Element of Culture: STORY When people share tales about things that have been done in the past, they are telling stories, such as the tale about making deliveries. These stories capture the essence of the firm's vision and values by showing how people have lived them.

Express value and belief

Heard - what people say - how decision are made and explain

Management at Work In addition to its famous soft drink, PepsiCo also owns Frito-Lay, Quaker, Tropicana, and Gatorade brands. The company owns 22 global brands which each generate over $1 billion in annual revenue. In the early 2000s, PepsiCo recognized that consumers were interested in healthier drink and snack options. As a result PepsiCo. has set targets for reduced sugar, sodium, and fat in their food and beverage products. They have also introduced healthier food items including Quaker Real Medleys portable oatmeal with real fruit and nuts and SmartFood Delight a reduced-fat popcorn. In addition to changes to their current products, PepsiCo. acquired healthier snack and beverage brands including Stacy's Pita Chip Co., Naked Juice, and KeVita. In addition to diversifying their product line, PepsiCo CEO, Indra Nooyi, has increased spending in Research & Development. The company is researching ancient grains, berries, and plants, and hired a former Mayo Clinic endocrinologist to advise PepsiCo on the impact of sugar, salt, and fat on consumers. After scanning the environment, PepsiCo discovered consumers' desire for healthier food options. The company then thought about how this environmental factor related to the possible actions the company could take. Managers at PepsiCo likely depicted these relationships by A. creating a cognitive map. B. listing the threats and opportunities. C.completing an environmental scan.

A. creating a cognitive map. Cognitive maps can help managers depict how environmental factors related to possible organizational actions. Creating a cognitive map usually occurs after managers have scanned the environment for events or issues that might affect the organization. Simply listing the threats and opportunities do not show a relationship--positive or negative--between the possible actions and environmental factors.

Management at Work In addition to its famous soft drink, PepsiCo also owns Frito-Lay, Quaker, Tropicana, and Gatorade brands. The company owns 22 global brands which each generate over $1 billion in annual revenue. In the early 2000s, PepsiCo recognized that consumers were interested in healthier drink and snack options. As a result PepsiCo. has set targets for reduced sugar, sodium, and fat in their food and beverage products. They have also introduced healthier food items including Quaker Real Medleys portable oatmeal with real fruit and nuts and SmartFood Delight a reduced-fat popcorn. In addition to changes to their current products, PepsiCo. acquired healthier snack and beverage brands including Stacy's Pita Chip Co., Naked Juice, and KeVita. In addition to diversifying their product line, PepsiCo CEO, Indra Nooyi, has increased spending in Research & Development. The company is researching ancient grains, berries, and plants, and hired a former Mayo Clinic endocrinologist to advise PepsiCo on the impact of sugar, salt, and fat on consumers. After scanning the environment, Indra Nooyi wanted to use a cognitive map to help her summarize the relationships between the environmental factors and possible actions for PepsiCo. Which of the following would Indra list as potential strategies on a cognitive map? Check all that apply. A. Sugar content in Pepsi Cola is too high B. Acquire healthy snack food brands C. Customers want healthier food and beverage options D. Reduce the amount of sodium in Frito-Lay brand chips and snacks

B. Acquire healthy snack food brands C. Customers want healthier food and beverage options D. Reduce the amount of sodium in Frito-Lay brand chips and snacks When listing potential strategies on a cognitive map, Indra should include acquiring healthy snack food brands and reducing the amount of sodium in Frito-Lay brand chips and snacks. The high sugar content in Pepsi Cola would be listed as a company weakness and customers wanting healthier food and beverage options would be listed as an environmental factor impacting PepsiCo.

Unconscious assumption and belief

Believed - widely share assumption and belief - buried deep below surface - rarely discuss or thought about

Culture can be defined as ___

a set of values, beliefs, and attitudes

PETA, People for the Ethical Treatment of Animals, are calling on a boycott of Hermés for the selling of luxury bags and belts made of alligator and crocodile skin. This product boycott impacts Hermés' ________ of its specific environment.

advocacy group The advocacy group component of the specific environment consists of groups of concerned citizens who band together to try to influence the business practices of specific industries, businesses, and professions.

Apple pays close attention to the design of the new Samsung Galaxy phone. After thinking the designs were too similar, Apple filed a lawsuit for copyright infringement against Samsung. Samsung impacts the _______ of Apple's specific environment.

competitor component The competitor component of the specific environment consists of companies in the same industry that sell similar products or services to customers.