Organisation, Environments and Culture Flashcards
Identify the components of external environments.
Components of External environments:
Environemntal change
Environemental complexity and Resource scarity
Explain Environmental change in relation to external environments.
Environmental change is the rate at which conditions or events
affecting a business change
Explain Environmental complexity in relation to external environments.
Environmental complexity is the number of external factors in an external environment.
Explain Resource Scarcity in relation to external environments.
Resource scarcity is the scarcity or abundance of resources available in the external environment.
How does the changes in an external environment affect an organization. identify the relation between external environment components.
The greater the rate of environmental change,
environmental complexity, and resource scarcity, the less confident managers are that they can understand, predict, and effectively react to the trends affecting their
businesses. According to punctuated equilibrium theory, companies experience periods
of stability followed by short periods of dynamic, fundamental change, followed by a return to periods of stability
Identify the four main components of the general environment and describe how each component affects the general environment.
The general environment consists of events and trends that affect all organizations.
Because the economy influences basic business decisions, managers often use
economic statistics and business confidence indices to predict future economic activity.
Changes in technology, which transforms inputs into outputs, can be a benefit or a
threat to a business. Sociocultural trends, like changing demographic characteristics,
affect how companies run their businesses. Similarly, sociocultural changes in
behavior, attitudes, and beliefs affect the demand for a business’s products and
services. Court decisions and new federal and state laws have imposed much greater
political/legal responsibilities on companies. The best way to manage legal
responsibilities is to educate managers and employees about laws and regulations and
potential lawsuits that could affect a business.
Identify the four main components of the specific environment and describe how each component affects the specific environment.
The specific environment is made up of the five components shown here. Companies can monitor customers’ needs by identifying customer problems after they occur or by anticipating problems before they occur. Because they tend to focus on well-known
competitors, managers often underestimate their competition or do a poor job of identifying future competitors. Suppliers and buyers are very dependent on each other, and that dependence sometimes leads to opportunistic behavior, in which one benefits at the expense of the other. Regulatory agencies affect businesses by creating rules and then enforcing them. Advocacy groups cannot regulate organizations’ practices.
Nevertheless, through public communications, media advocacy, and product boycotts, they try to convince companies to change their practices.
Explain the process that companies use to make sense of their changing
environments.
Managers use a three-step process to make sense of external environments:
environmental scanning, interpreting information, and acting on it. Managers scan their environments based on their organizational strategies, their need for up-to-date information, and their need to reduce uncertainty. When managers identify environmental events as threats, they take steps to protect the company from harm. When managers identify environmental events as
opportunities, they formulate alternatives for taking advantage of them to improve company performance. Using cognitive maps can help managers visually summarize the relationships between environmental factors and the actions they might take to deal with them.
How are organizational cultures created and how they can help companies be successful.
Organizational culture is the set of key values, beliefs, and attitudes shared by
organizational members. Organizational cultures are often created by company
founders and then sustained through the telling of organizational stories and the celebration of organizational heroes. Adaptable cultures that promote employee
involvement, make clear the organization’s strategic purpose and direction, and
actively define and teach organizational values and beliefs can help companies
achieve higher sales growth, return on assets, profits, quality, and employee
satisfaction. Organizational cultures exist on three levels: the surface level, where cultural artifacts and behaviors can be observed; just below the surface, where values and beliefs are expressed; and deep below the surface, where
unconsciously held assumptions and beliefs exist. Managers can begin to change company cultures by focusing on the top two levels and by using behavioral substitution and behavioral addition, changing visible artifacts, and selecting job
applicants with values and beliefs consistent with the desired company culture.
