The Environment and Corporate Culture

1. The Environment and Corporate Culture Chapter 2

2. The External Environment • The elements of the world constantly change • Environment encompasses all elements outside the organization • General Environment: • Outer layer that directly affects organization • Task Environment: • Sectors that conduct transactions with the organization • Internal Environment: • Elements within the organization boundaries

3. The GeneralEnvironment

4. General Environment: International New competitors, customers, suppliers Changes in social, technological and economic trends All organizations must compete and think globally Economic power has shifted to China and India The global environment is complex, ever-changing, and uneven playing field

5. General Environment: Technological Massive changes for all organizations Technology has become the tool for doing business Technology is driving innovation and competition Advances are impacting organizations and managers

6. General Environment: Sociocultural Demographic characteristics, norms, customs, and values The Hispanic population is expected to increase 188% Generation Y is flooding the workplace with new demands Single-father households are the fastest-growing type of living arrangement The U.S. population is continuing to age, companies create products and services for senior market

7. General Environment: Economic • Economic health of the country/region • Consumer buying power • Unemployment Rate • Interest Rates • The global environment has made economic environment complex and uncertain • The recent weakened U.S. economy has had a devastating impact on small businesses

8. General Environment: Legal-Political • Government regulation; state, local and federal • Political activities • Government agencies and regulation • Managers must recognize the power of pressure groups • Work to influence companies to behave socially responsible

9. 2010 Environmental Index

10. General Environment: Natural • Organizations must be sensitive to the earth’s diminishing resources • Plants, animals, rocks and natural resources • Natural dimension does not have its own voice • Environmental groups advocate action/policy • Reduce pollution • Develop renewable energy • Reduction of greenhouse gases

11. Task Environment • Customers • Competitors • Suppliers • Labor Market

12. External Environment at Nortel

13. External Environment and Uncertainty

14. Environmental Uncertainty • Uncertainty means that managers do not have complete information • When the environment changes rapidly, there is high uncertainty • Organizations must adapt, managers must be mindful • Open-minded, independent thinkers • Even in certain environments, managers need new ideas

15. Adapting to the Environment • Boundary-spanning roles • Interorganizational partnerships • Mergers/joint ventures • Shift from adversarial orientation to partnership orientation

16. The Shift to a Partnership Paradigm

17. The Internal Environment: Corporate Culture Corporate culture is the set of key values, beliefs, understandings, and norms that members of an organization share • Symbols • Stories • Heroes • Slogans • Ceremonies

18. Levels of Corporate Culture

19. Four Types of Corporate Cultures

20. Shaping Corporate Culture for Innovative Response • Important to attract, motivate, and retain talented employees • Plays a key role in organization climate toward learning and innovation • Successful companies balance culture and business performance • Shaping and guiding employee behavior

21. Combining Culture and Performance

22. Cultural Leadership • Articulate a vision for the organizational culture that employees can believe in • Heeds the day-to-day activities that reinforce the cultural vision Leaders communicate through words and actions