the environment and culture of organizations

7/27/2019 The Environment and Culture of Organizations

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CHAPTER 2n The Environment and Culture of

Organizations


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The Organizations

Environmentsn External environment:

everything outside anorganizationsboundaries that might

affect it. Theuncontrollableenvironment.

n Internal environment: theconditions and forceswithin an organization.

The controllableenvironment.


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Figure 3.1:

TheOrganizati

on and ItsEnvironments


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The General Environmentn Economic dimensions: the overall

health and vitality of theeconomic system in which theorganization operates.

n Technical dimensions: the methods

available for convertingresources into products orservices.

n Socio-cultural dimensions: thecustoms, mores, values, anddemographics of the society inwhich the organizationfunctions.

n (see Figure 3.2)


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Figure 3.2:

McDonalds General

Environment


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Additional Dimensionsn Political-Legal dimension: the

government regulation ofbusiness and the generalrelationship betweenbusiness and government.

n International dimension: theextent to which anorganization is involved in oraffected by business in othercountries.


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The Task Environmentn Competitors: an organization that

competes with otherorganizations.

n Customer: whoever pays moneyto acquire an organizationsproducts or services.

n Supplier: an organization thatprovides resources for otherorganizations.

n Regulator: a unit that has thepotential to control, legislate,or influence an organizationspolicies and practices.


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Figure

3.3:McDonald

s TaskEnvironment


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Task Environments

Continuedn Interest group: a group

organized by itsmembers to attempt toinfluence organizations.

n Strategic partner: anorganization workingtogether with one ormore organizations in ajoint venture or otherpartnership.


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The Internal Environmentn Owner: someone who has legal property rights to

a business.

n Board of directors: governing body elected by acorporations stockholders and charged withoverseeing the general management of thefirm.

n Employees: those employed by the organization.

n Physical work environment: the firms facilities.


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Figure 3.4: EnvironmentalChange, Complexity, and

Uncertainty


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Organizational Culturen The set of values, beliefs, behaviors, customs,

and attitudes that helps the members of theorganization understand what it stands for,

how it does things, and what it considersimportant.

n Organizational culture is important for itdetermines the feel of the organization.

n Its starting point is often the founder.


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Managing Organizational

Culturen The manager must understand the

current culture and then decide if it

should be maintained or changed.n Managers must walk a fine line

between maintaining a culture thatstill works effectively versus changinga culture that has becomedysfunctional.


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Organizational

Environment Relationshipsn Uncertainty: a driving force that

influences many organizational

decisions.n Competitive forces:

n Threat of new competitive entrants.

n Competitive rivalry.

n Threat of substitute products.

n The power of buyers.

n The power of suppliers.


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How Organizations Adapt

to Their EnvironmentsEach organization must asses its own uniquesituation then adapt according to the good

judgment of senior management, for example:n Information systems.

n Strategic responses.

n Mergers, acquisitions, and alliances.

n Organizational design and flexibility.

n Direct influence of the environment.


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Figure 3.6: A Model ofOrganizationalEffectiveness

the environment and culture of organizations

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