Chapter 2 - Organizational environments and cultures

Question 1

External Environments

Answer 1

All events outside a company that have the potential to influence or affect it.

Question 2

Environmental Change

Answer 2

The rate at which a company’s general and specific environments change.

Question 3

Stable Environment

Answer 3

Environment in which the rate of change is slow.

Question 4

Dynamic Environment

Answer 4

Environment in which the rate of change is fast.

Question 5

Punctuated Equilibrium Theory

Answer 5

Theory that holds that companies go through long, simple periods of stability (equilibrium), followed by short periods of dynamic, fundamental change (revolution), and ending with a return to stability (new equilibrium)

Question 6

Environmental Complexity

Answer 6

The number of external factors in the environment that affect organization.

Question 7

Simple Environment

Answer 7

An environment with few environmental changes.

Question 8

Complex Environment

Answer 8

An environment with many environmental changes.

Question 9

Environmental Munificence

Answer 9

Degree to which an organization’s external environment has an abundance or scarcity of critical organizational resources.

Question 10

Uncertainty

Answer 10

Extent to which managers can understand or predict which environmental changes and trends will affect their business.

Question 11

General Environment

Answer 11

The economic, technological, sociocultural, and political/legal trends that indirectly affect all organizations.

Question 12

Specific Environment

Answer 12

The customer, competitor, supplier, industry regulation, and public pressure group trends that are unique to an industry and that directly affect how a company does business.

Question 13

Business Confidence Indices

Answer 13

Indices that show managers’ level of confidence about future business growth.

Question 14

Technology

Answer 14

Knowledge, tools, and techniques used to transform inputs (raw material) into outputs (finished products or services)

Question 15

Competitors

Answer 15

Companies in the same industry that sell similar products or services to customers.

Question 16

Competitive approach

Answer 16

A process for monitoring competitors that involves identifying competitors, anticipating their moves, and determining their strengths and weaknesses.

Question 17

Suppliers

Answer 17

Companies that provide material, human, financial, and informational resources to other companies.

Question 18

Supplier Dependence

Answer 18

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.

Question 19

Buyer Dependence

Answer 19

The degree to which a supplier relies on a buyer because of the importance of that user to the supplier and the difficulty of selling it’s products to other buyers.

Question 20

Opportunistic Behaviour

Answer 20

A transaction in which one party in the relationship benefits at the expense of the other.

Question 21

Relationship Behaviour

Answer 21

A mutually beneficial, long term exchange between buyers and suppliers.

Question 22

Industry Regulation

Answer 22

The regulations and rules that govern the business practices and procedures of specific industries, businesses, and professionals.

Question 23

Advocacy Groups

Answer 23

Groups of concerned citizens who band together to try to influence the business practices of specific industries, businesses, and professionals.

Question 24

Public Communications

Answer 24

Is an advocacy group tactic that relies on voluntary participation by the news media and advertising industry to get an advocacy group’s message out.

Question 25

Media Advocacy

Answer 25

Is an advocacy group tactic of framing issues as public issues, exposing questionable, exploitative, or unethical practices, and forcing media coverage by buying media time or creating controversy that is likely to receive extensive news coverage.

Question 26

Product Boycott

Answer 26

Is an advocacy group tactic of protesting a company’s actions by convincing consumers not to purchase its products or services.

Question 27

Environmental Scanning

Answer 27

Is searching the environment for important events or issues that might affect an organization.

Question 28

Cognitive Maps

Answer 28

Graphic depictions of how managers believe environmental factors relate to possible organizational actions.

Question 29

Internal Environment

Answer 29

The events and trends inside an organization that affect management, employees, and organizational culture.

Question 30

Organizational Culture

Answer 30

The values, beliefs, and attitudes shared by organizational members.

Question 31

Visible Artifacts

Answer 31

Visible signs of an organization’s culture, such as the office design and layout, company dress codes, and company benefits and perks such as stock options, personal parking spaces, or the private company dining room.

Question 32

Organizational Stories

Answer 32

Stories told by organizational members to make sense of organizational events and changes, and to emphasize culturally consistent assumptions, decisions and actions.

Question 33

Organizational heroes

Answer 33

People who are celebrated for their qualities and achievements within an organization.

Question 34

Organizational Rituals

Answer 34

Routine activities that emphasize the organization’s culture.

Question 35

Organizational Ceremonies

Answer 35

Planned activities or events that emphasize cultural consistent assumptions, decisions and actions.

Question 36

Organizational Symbols

Answer 36

Something that represents another thing.

Question 37

Company Vision

Answer 37

A companies purpose or reason for existence.

Question 38

Behavioural Addition

Answer 38

Is the process of having managers and employees preform new behaviours that are central to and symbolic of the new organizational culture of that company wants to create.

Question 39

Behavioural Substitution

Answer 39

Is the process of having managers and employees perform new behaviours central to the “new” organizational culture in place of behaviours that were central to the “old” organizational culture.

Question 40

The three basic characteristics of changing external environments

Answer 40

Environmental change, environmental complexity and munificence, and uncertainty.

Question 41

The two kinds of external environments that influence organizations

Answer 41

General environment and specific environment

Question 42

General environment - economy

Answer 42

The current state of a country’s economy affects most organizations operating in it. A growing economy means more people working and spending money, A shrinking economy means less people have money to spend.

Because the economy influences basic business decisions, managers often use economic statistics and business confidence indices to predict future economic activity.

Question 43

General environment - technological component

Answer 43

Changes in technology can help companies provide better products or produce their products more efficiently. While technological changes can benefit a business, they can also threaten it.

Question 44

General environment - sociocultural component

Answer 44

Refers to the demographic characteristics that affect how companies run their business and how general behaviour, attitudes and beliefs of the people in a particular society affect the demand for a business’s products and services.

Question 45

General environment - political/legal component

Answer 45

Includes the legislation, regulation, and court decisions that govern and regulate business behaviour. Education of laws and regulations and potential law suits that could affect a business is the best way to manage legal responsibilities.

Question 46

Specific environment - customer component

Answer 46

Companies can monitor customer’ needs by identifying customer problems after they occur or by anticipating problems before they occur.

Question 47

Specific environment - competitor component

Answer 47

Often, the difference between business success and failure comes down to whether your company is doing a better job of satisfying customer wants and needs than your competitors.

Because companies tend to focus on well known competitors, managers often underestimate their competition or do a poor job of identifying future competitors.

Question 48

Specific environment - supplier component

Answer 48

A key factor influencing the relationship between companies and their suppliers is how dependent they are on each other. Dependence can lead to either “opportunistic behaviour” or “relationship behaviour”.

Question 49

Specific environment - industry regulation component

Answer 49

Regulatory agencies affect businesses by creating rules and then enforcing them, and the number of rules and regulations continues to increase. Businesses are not just subjected to federal regulations. They must also meet provincial, county, and city regulations too.

Question 50

Specific environment - advocacy groups

Answer 50

Advocacy groups cannot regulate organization practices but they can try to convince companies to change their practices.

Question 51

Types of advocacy group tactics

Answer 51

Public communications, media advocacy and product boycott

Question 52

Make sense of changing environments by…

Answer 52

Environmental scanning, interpreting environmental factors and acting on threats and opportunities.

Question 53

Interpreting environmental factors

Answer 53

Managers determine what environmental events and issues mean to the organization. Typically, managers view environmental events and issues as either threats or opportunities.

Question 54

Acting on threats and opportunities

Answer 54

Managers have to decide how to respond to these environmental factors. Cognitive maps are a helpful tool.

Question 55

Creation and maintenance of organizational cultures by using…

Answer 55

Created by company founders and then sustained through visible artifacts, organizational stories, organizational heroes, rituals, ceremonies, and symbols.

Question 56

Successful organizational cultures are based on…

Answer 56

Adaptability, involvement, consistency and a clear mission.

Question 57

Changing organizational culture can be done by…

Answer 57

Behavioural addition, behavioural substitution and changing visible artifacts and symbols.

Question 58

Three levels of organizational culture

Answer 58

1. Surface level - seen and observed
2. Expressed values and beliefs - heard but not seen
3. Unconsciously held assumptions and beliefs - unwritten and rarely discussed.