The External Environment and Corporate Culture Flashcards
external environment
all elements existing outside the boundary of the organisation that have the potential to affect the organisation
general environment
the layer of the external environment that affects the organisation indirectly. It includes political-legal, economic, socio-cultural, technological and natural factors
task environment
the layer of the external environment that directly influences the organisation’s operations and performance. It generally consists of customers, competitors, suppliers and the labour market
political-legal dimension
the dimension of the general environment that represents political activities and government regulations designed to influence organisational behaviour
economic dimension
the dimension of the general environment that represents the general economic health of the country or region in which the organisation operates
socio-cultural dimension
the dimension of the general environment that represents the demographic characteristics as well as the norms, customs and values of the general population
technological dimension
the dimension of the general environment that includes scientific and technological advancements in a specific industry as well as in society at large
natural dimension
the dimension of the general environment that includes all elements that occur naturally on earth, including plants, animals, rocks and natural resources such as air, water and climate
customers
people or organisations who purchase the goods or services produced by a business
competitors
other organisations in the same industry that provide goods or services to the same set of customers
suppliers
those who provide the raw materials that the organisation uses to produce its output
labour market
represents people in the environment who can be hired to work for the organisation
uncertainty
means that managers do not have sufficient information about environmental factors to understand and predict environmental needs and changes
high uncertainty
there are a large number of factors in the organisational environment that are changing at a rapid pace
strategies to adapt to the environment
- boundary-spanning roles
- forecasting and planning
- interorganisational partnerships
- mergers and joint ventures
boundary-spanning roles
roles assumed by people and/or departments that link and coordinate the organisation with key elements in the external environment
boundary spanners serve two purposes for the organisation: they detect and process information about changes in the environment, and they represent the organisation’s interest to the environment.
forecasting and planning
forecasting is an effort to spot trends that enable managers to predict future events
interorganisational partnerships
partnerships between different organisations
mergers and joint ventures
a merger occurs when two or more organisations combine to become one
a joint venture involves a strategic alliance by two or more organisations
strategies to influence the environment
- advertising and public relations
- political activity
- trade associations
advertising and public relations
advertising is a way to manage demand for an organisation’s products and services
public relations is similar to advertising, except that its goal is to influence public opinion about the organisation itself
political activity
represents organisational attempts to influence government legislation and regulation
trade associations
an association made up of organisations with similar interests for the purpose of influencing the environment
culture
the key ideals, values and beliefs shared by members of an organisation, which create the atmosphere and projected image of the organisation
the two levels in which culture can be analysed
at the surface level are visible artefacts, which include the manner of dress, patterns of behaviour, physical symbols, organisational ceremonies and office layout. Visible artefacts are all the things one can see, hear and observe by watching members of the organisation.
At a deeper, less obvious level are values and beliefs, which are not observable but can be discerned from how people explain and justify what they do
symbols
an object, act or event that conveys meaning to others
symbols are often used by senior executives to let staff and other stakeholders know of the expected standards of behaviour and service
stories
a narrative based on true events that is repeated frequently and shared among organisational employees
stories paint pictures that help symbolise the firm’s vision and values and help employees personalise and absorb them
heroes
a figure who exemplifies the deeds, character and attributes of a strong corporate culture
heroes are role models for employees to follow
slogans
a phrase or sentence that succinctly expresses a key corporate value
many companies use a slogan or saying to convey special meaning to employees
ceremonies
a planned activity that makes up a special event and is conducted for the benefit of an audience
ceremonies that reinforce valued accomplishments, create a bond among people by allowing them to share an important event, and anoint and celebrate heroes
adaptability culture
characterised by values that support the organisation’s ability to interpret and translate signals from the environment into new behaviour responses
- employees have the autonomy to make decisions and act freely to meet new needs
- responsiveness to customer is highly valued
- managers also actively create change by encouraging and rewarding creativity, experimentation and risk taking
achievement culture
a results-oriented culture that values competitiveness, personal initiative and achievement
- Mangers create an incentive-based compensation system that handsomely rewards high performers
involvement culture
a culture that places high value on meeting the needs of employees and values cooperation and equality
consistency culture
a culture that values and rewards a methodical, rational, orderly way of doing things
- following the rules and being thrifty are valued
high-performance culture
created when managers emphasise both values and business results, this can be achieved through cultural leadership
cultural leader
defines and articulates important values that are tied to a clear and compelling mission, which they communicate widely and uphold through their actions
ways to reinforce an adaptive organisational culture
- symbolic action by leader (role modelling)
- consistent behaviour by multiple members
- employee selection and socialisation
- comprehensive rewards for norm-consistent behaviour
- participation
advantages of organisational culture
- invisible control experienced as autonomy
- generates inexpensive but highly valued rewards
- creates core competencies
disadvantages of organisational culture
- can be a source of inflexibility
- can undermine incentive systems and formal structures
- can get off-track in their efforts to protect the culture
- can cause emotional/ psychological damages to employees
