The External Environment and Corporate Culture

Question 1

external environment

Answer 1

all elements existing outside the boundary of the organisation that have the potential to affect the organisation

Question 2

general environment

Answer 2

the layer of the external environment that affects the organisation indirectly. It includes political-legal, economic, socio-cultural, technological and natural factors

Question 3

task environment

Answer 3

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

Question 4

political-legal dimension

Answer 4

the dimension of the general environment that represents political activities and government regulations designed to influence organisational behaviour

Question 5

economic dimension

Answer 5

the dimension of the general environment that represents the general economic health of the country or region in which the organisation operates

Question 6

socio-cultural dimension

Answer 6

the dimension of the general environment that represents the demographic characteristics as well as the norms, customs and values of the general population

Question 7

technological dimension

Answer 7

the dimension of the general environment that includes scientific and technological advancements in a specific industry as well as in society at large

Question 8

natural dimension

Answer 8

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

Question 9

customers

Answer 9

people or organisations who purchase the goods or services produced by a business

Question 10

competitors

Answer 10

other organisations in the same industry that provide goods or services to the same set of customers

Question 11

suppliers

Answer 11

those who provide the raw materials that the organisation uses to produce its output

Question 12

labour market

Answer 12

represents people in the environment who can be hired to work for the organisation

Question 13

uncertainty

Answer 13

means that managers do not have sufficient information about environmental factors to understand and predict environmental needs and changes

Question 14

high uncertainty

Answer 14

there are a large number of factors in the organisational environment that are changing at a rapid pace

Question 15

strategies to adapt to the environment

Answer 15

• boundary-spanning roles
• forecasting and planning
• interorganisational partnerships
• mergers and joint ventures

Question 16

boundary-spanning roles

Answer 16

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.

Question 17

forecasting and planning

Answer 17

forecasting is an effort to spot trends that enable managers to predict future events

Question 18

interorganisational partnerships

Answer 18

partnerships between different organisations

Question 19

mergers and joint ventures

Answer 19

a merger occurs when two or more organisations combine to become one

a joint venture involves a strategic alliance by two or more organisations

Question 20

strategies to influence the environment

Answer 20

• advertising and public relations
• political activity
• trade associations

Question 21

advertising and public relations

Answer 21

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

Question 22

political activity

Answer 22

represents organisational attempts to influence government legislation and regulation

Question 23

trade associations

Answer 23

an association made up of organisations with similar interests for the purpose of influencing the environment

Question 24

culture

Answer 24

the key ideals, values and beliefs shared by members of an organisation, which create the atmosphere and projected image of the organisation

Question 25

the two levels in which culture can be analysed

Answer 25

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

Question 26

symbols

Answer 26

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

Question 27

stories

Answer 27

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

Question 28

heroes

Answer 28

a figure who exemplifies the deeds, character and attributes of a strong corporate culture

heroes are role models for employees to follow

Question 29

slogans

Answer 29

a phrase or sentence that succinctly expresses a key corporate value

many companies use a slogan or saying to convey special meaning to employees

Question 30

ceremonies

Answer 30

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

Question 31

adaptability culture

Answer 31

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

Question 32

achievement culture

Answer 32

a results-oriented culture that values competitiveness, personal initiative and achievement

• Mangers create an incentive-based compensation system that handsomely rewards high performers

Question 33

involvement culture

Answer 33

a culture that places high value on meeting the needs of employees and values cooperation and equality

Question 34

consistency culture

Answer 34

a culture that values and rewards a methodical, rational, orderly way of doing things

• following the rules and being thrifty are valued

Question 35

high-performance culture

Answer 35

created when managers emphasise both values and business results, this can be achieved through cultural leadership

Question 36

cultural leader

Answer 36

defines and articulates important values that are tied to a clear and compelling mission, which they communicate widely and uphold through their actions

Question 37

ways to reinforce an adaptive organisational culture

Answer 37

• symbolic action by leader (role modelling)
• consistent behaviour by multiple members
• employee selection and socialisation
• comprehensive rewards for norm-consistent behaviour
• participation

Question 38

advantages of organisational culture

Answer 38

• invisible control experienced as autonomy
• generates inexpensive but highly valued rewards
• creates core competencies

Question 39

disadvantages of organisational culture

Answer 39

• 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