Chapter 2 - Organizational environments and cultures Flashcards
External Environments
All events outside a company that have the potential to influence or affect it.
Environmental Change
The rate at which a company’s general and specific environments change.
Stable Environment
Environment in which the rate of change is slow.
Dynamic Environment
Environment in which the rate of change is fast.
Punctuated Equilibrium Theory
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)
Environmental Complexity
The number of external factors in the environment that affect organization.
Simple Environment
An environment with few environmental changes.
Complex Environment
An environment with many environmental changes.
Environmental Munificence
Degree to which an organization’s external environment has an abundance or scarcity of critical organizational resources.
Uncertainty
Extent to which managers can understand or predict which environmental changes and trends will affect their business.
General Environment
The economic, technological, sociocultural, and political/legal trends that indirectly affect all organizations.
Specific Environment
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.
Business Confidence Indices
Indices that show managers’ level of confidence about future business growth.
Technology
Knowledge, tools, and techniques used to transform inputs (raw material) into outputs (finished products or services)
Competitors
Companies in the same industry that sell similar products or services to customers.
Competitive approach
A process for monitoring competitors that involves identifying competitors, anticipating their moves, and determining their strengths and weaknesses.
Suppliers
Companies that provide material, human, financial, and informational resources to other companies.
Supplier Dependence
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.
Buyer Dependence
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.
Opportunistic Behaviour
A transaction in which one party in the relationship benefits at the expense of the other.
Relationship Behaviour
A mutually beneficial, long term exchange between buyers and suppliers.
Industry Regulation
The regulations and rules that govern the business practices and procedures of specific industries, businesses, and professionals.
Advocacy Groups
Groups of concerned citizens who band together to try to influence the business practices of specific industries, businesses, and professionals.
Public Communications
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.
Media Advocacy
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.
Product Boycott
Is an advocacy group tactic of protesting a company’s actions by convincing consumers not to purchase its products or services.
Environmental Scanning
Is searching the environment for important events or issues that might affect an organization.
Cognitive Maps
Graphic depictions of how managers believe environmental factors relate to possible organizational actions.
Internal Environment
The events and trends inside an organization that affect management, employees, and organizational culture.
Organizational Culture
The values, beliefs, and attitudes shared by organizational members.
Visible Artifacts
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.
Organizational Stories
Stories told by organizational members to make sense of organizational events and changes, and to emphasize culturally consistent assumptions, decisions and actions.
Organizational heroes
People who are celebrated for their qualities and achievements within an organization.
Organizational Rituals
Routine activities that emphasize the organization’s culture.
Organizational Ceremonies
Planned activities or events that emphasize cultural consistent assumptions, decisions and actions.
Organizational Symbols
Something that represents another thing.
Company Vision
A companies purpose or reason for existence.
Behavioural Addition
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.
Behavioural Substitution
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.
The three basic characteristics of changing external environments
Environmental change, environmental complexity and munificence, and uncertainty.
The two kinds of external environments that influence organizations
General environment and specific environment
General environment - economy
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.
General environment - technological component
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.
General environment - sociocultural component
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.
General environment - political/legal component
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.
Specific environment - customer component
Companies can monitor customer’ needs by identifying customer problems after they occur or by anticipating problems before they occur.
Specific environment - competitor component
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.
Specific environment - supplier component
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”.
Specific environment - industry regulation component
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.
Specific environment - advocacy groups
Advocacy groups cannot regulate organization practices but they can try to convince companies to change their practices.
Types of advocacy group tactics
Public communications, media advocacy and product boycott
Make sense of changing environments by…
Environmental scanning, interpreting environmental factors and acting on threats and opportunities.
Interpreting environmental factors
Managers determine what environmental events and issues mean to the organization. Typically, managers view environmental events and issues as either threats or opportunities.
Acting on threats and opportunities
Managers have to decide how to respond to these environmental factors. Cognitive maps are a helpful tool.
Creation and maintenance of organizational cultures by using…
Created by company founders and then sustained through visible artifacts, organizational stories, organizational heroes, rituals, ceremonies, and symbols.
Successful organizational cultures are based on…
Adaptability, involvement, consistency and a clear mission.
Changing organizational culture can be done by…
Behavioural addition, behavioural substitution and changing visible artifacts and symbols.
Three levels of organizational culture
- Surface level - seen and observed
- Expressed values and beliefs - heard but not seen
- Unconsciously held assumptions and beliefs - unwritten and rarely discussed.
