the environment and corporate culture. environment organizations are open systems which import...
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The Environment and Corporate Culture
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EnvironmentOrganizations are open systems which import information from its
environment and use double loop learning to adapt the organization to changes in
the environment.
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External environment
– General EnvironmentInternationalTechnologicalSocioculturalEconomicLegal-Political
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International environment
GlobalizationGlobal competitionCross cultural dynamicsAre the theories and practices of American management compatible in other countries?
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Technological
Technology is rapidly changing the business environment– Information and communications– Technology pertaining to speicific
industries– The interaction of technology and
people – socio technical systems
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Sociocultural
Population distributionPopulation densityAgeEducation levels
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Economic
Consumer purchasing powerUnemploymentInterest ratesFuel pricesCompetition from other countries
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Legal political
OSHAEPALaw suitsConsumer protection lawsProduct safetyInformation and labeling
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External EnvironmentDriving Forces have an impact over time
ExamplesHealth consciousnessPolitical conservatismComputerizationDemographic shifts toward Asian and
Hispanic minoritiesThe baby boom generation
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Task Environment
The five forces Model of Porter– Customers– Suppliers– Competitors– Substitiutes– New Entrants
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Relationship of the company to its environment
Organic organization – open system Mechanistic-closed system
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How organizations react to environmental changes
Open systems maintain relationships with their environments and react to changes (effectiveness)Environmental Scanning– Detects changes in the environment
over time.
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How organizations influence environmental changes
Advertising– Change demand for product
Public Relations– Change the image of the company
Political Activity and trade organizations– Influence the legal and politcal
environment
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Internal environment
– CultureTechnologyStructurePhysical facilitiesEmployeesManagement
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Internal environment
Physical Structure– Plants– Sales Offices– Showrooms– Computer network– ICTSocial Structure– Formal – Informal
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Internal environmentThe Social Structure
Formal Social Structure– Official documents
Org charts BilawsBudgets
– Contractual BoundariesDepartmentsSub-departments
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Internal environmentThe Social Structure
Informal Structure– Rules of behavior– Shared meaning– Corporate culture
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Corporate Culture
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Defined as:
Key values, beliefs, understanding and norms shared by members of the organizationIt is their shared reality
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Embodied superficially by:
Visible artifacts – dress– patterns of behavior– symbols– ceremonies– layout
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Embodied at a deeper level by
StoriesLanguageMythsHeroes
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There are different types of cultures but it is crucial that the culture be
adaptive to the changes in the environment less the organization become extinct e.g. the dinosaur
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Types of Cultures
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Adaptability Culture
If the environment requires fast response and high risk decision makingManagers encourage values that support ability to detect, interpret and translate signals from the environment into responsive behavior
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Achievement Culture
Environment requires high level of service over a long time without much changeResults oriented excellence. Achieve difficult ambitious targets
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Clan Culture
If we keep our people happy, and help get their needs met, they will meet the needs of a changing environment.Focus on cooperation, consideration, no status differences
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Bureaucratic Culture
Focus inwardLess concern about the environment and more about following the rulesThrifty, orderly way of doing things
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Changing demands for managing corporate culture
Culture the glue that holds the organization togetherBy definition, shared values and realities must be sharedDissemination of culture is done by – Picking the right people who will fit into
the corporate value system– Socializing people