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MANAGEMENT

RICHARD L. DAFT

The Environment and Corporate Culture

CHAPTER 3

Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

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Learning Outcomes

• Describe the general and task environments and the dimensions of each.

• Explain the strategies managers use to help organizations adapt to an uncertain or turbulent environment.

• Define corporate culture and give organizational examples.

• Explain organizational symbols, stories, heroes, slogans, and ceremonies and their relationship to corporate culture.

• Describe how corporate culture relates to the environment.

• Define a cultural leader and explain the tools a cultural leader uses to create a high-performance culture.


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Are You Fit for Managerial

Uncertainty?• The environment in which businesses

operate are increasingly dynamic

• Some managers cannot respond to environmental surprises

• In an uncertain environment, managers need to facilitate new thinking, new ideas and new ways of working


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External Environment

● General environment – affects indirectly

● Task environment- Affects directly- Influences operations and performances

● Internal environment – elements within the organization’s boundaries


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International Dimension

● Portion of the external environment that represents events originating in foreign countries as well as opportunities for U.S. companies in other countries.

• Events originating in foreign countries

• Impacts all aspects of the external environment

– New competitors

– New customers

– New suppliers

• Today, all companies globally


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Technological Dimension

• Scientific and technological advances– Specific industries– Society at large

• Impact:– Organizations– Managers– Customers

• Desktop computers• Networks• Internet Access• Handheld devices• Videoconferencing• Cell phones• Laptop• WiFi• Medical advances


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Socio-Cultural Dimension

• Dimension of the general environment– Demographic characteristics– Norms– Customs– Values

• Today’s demographics are the foundation of the future workforce

• Demographic trends affect organizations globally

– Norms– Customs– Values of population– Geographical Distribution– Population Density– Age– Education Levels


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Economic Dimension

● General economic health● Consumer purchasing power● Unemployment rate● Interest rates

● Recent Trends● Frequency of mergers and

acquisitions● Small business sector vitality


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Legal-Political Dimension

• Federal, state, and local government regulations

• Political activities designed to influence company behavior


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Natural Dimension

• Concern for the environment

• The natural dimension has no voice

• Pressure comes from advocacy and managers

– Eliminate nonbiodegradable plastic bags from the environment

– Improving efficiency of plants and factories

– Investing in cleaner technologies


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Task Environment

Sectors that have a direct working relationship with the organization:

Customers

Competitors

Suppliers

Labor Market

Changes in these various sectors can

create tremendous challenges…


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External Environment


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Environmental Uncertainty

Management Management must adapt to must adapt to

changeschanges


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Adapting to the Environment

• Boundary-Spanning Roles: coordinating the organization with key elements in the external environment

• Interorganizational Partnerships: collaborating with other organizations

• Mergers: combination of two organizations

• Joint Ventures: an alliance of organizations for a specific project


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Partnership Paradigm


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The Internal Environment: Corporate

Culture• Corporate culture should match the needs

of the external environment

• The importance of corporate culture has been growing

• Culture is a pattern of shared values

• “how things are done”


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Culture

• Symbols• Stories• Heroes• Slogans• Ceremonies


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Environment and Culture

• The external environment influences culture

• The internal environment should embody the requirements for success

• Manager’s must pay attention to culture– Recognize the ways culture can help or hurt

your department


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Adaptive vs. Unadaptive Corporate Culture


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Four Types of Corporate Culture


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Shaping Corporate Culture for Innovative

Response

How people are treated increases a company’s value

Culture attracts, motivates and retains talent

Corporate culture enables learning and innovation


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Combining Culture and Performance


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Cultural Leadership

• Articulate a vision for the organizational culture that employees can believe in

• The cultural leader heeds the day-to-day activities that reinforce the cultural vision

• Managers communicate the cultural values through words and actions

• Cultural leaders uphold their commitment to values during difficult times

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Documents

uncertain environment

turbulent environment

organizational culture

ways culture

talentcorporate culture

highperformance culture

cultural values

chapter3 learning outcomes