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POM 003 Org Envrmt N Culture

The document discusses how organizational environments and cultures are shaped by factors such as the rate of environmental change, complexity of the external environment, availability of resources, and levels of uncertainty. It also examines how organizational cultures are created, sustained through stories and heroes, and can be changed to foster success through visible artifacts and hiring practices that align with the desired culture. The key factors that influence organizational environments and how cultures impact business performance are summarized.

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Rajesh Singh
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57 views30 pages

POM 003 Org Envrmt N Culture

The document discusses how organizational environments and cultures are shaped by factors such as the rate of environmental change, complexity of the external environment, availability of resources, and levels of uncertainty. It also examines how organizational cultures are created, sustained through stories and heroes, and can be changed to foster success through visible artifacts and hiring practices that align with the desired culture. The key factors that influence organizational environments and how cultures impact business performance are summarized.

Uploaded by

Rajesh Singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Organizational Environments

and Cultures
Environmental Change
The rate at which a company’s general and specific
environments change.

•Stable
– slow rate of change

•Dynamic
– fast rate of change
Punctuated Equilibrium Theory

Stability

Dynamic
Change
Dynamic
Change Dynamic
Change

Stability
Environmental Complexity
• Simple
– few environmental factors that affect organizations

• Complex
– many environmental factors that affect organizations
Resource Scarcity

The abundance or shortage of critical resources in


an organization’s external environment.
Uncertainty

The extent to which managers can understand or


predict the external changes and trends affecting
their business.
Environmental Change,
Environmental Complexity, and
Resource Scarcity
General Environment
• General environment
– the economy and the technological, sociocultural, and
political/legal trends that indirectly affect all
organizations

• Specific environment
– unique to a firm’s industry
– directly affects the way its conducts daily business
General and Specific
Environments
Economy
• A growing economy provides a favorable
environment for business growth.

• Business confidence indices show how


confident managers are about future business
growth.
Technological Component
• Technology
– an umbrella term for the knowledge, tools, and
techniques used to transform inputs into outputs

Changes in technology can help companies provide


better products or produce their products more
efficiently.
Sociocultural Component
• Demographic characteristics, general behavior,
attitudes, and beliefs of people in a particular
society
Demographics: Percentage of Married
Women (with Children) Who Work
Political/Legal Component
• The legislation, regulations, and court decisions
that govern and regulate business behavior

• Many managers are unaware of the potential


legal risks associated with traditional
managerial decisions like recruiting, hiring, and
firing employees.
Specific Environment
• Customers
• Competitors
• Suppliers
• Industry regulations
• Advocacy groups
Customer Component
• Reactive customer monitoring
– Identifying and addressing customer trends and
problems after they occur

• Proactive customer monitoring


– Identifying and addressing customer needs, trends,
and issues before they occur
Competitor Component
• Competitors
– companies in the same industry that sell similar
products or services

• Competitive analysis
– a process of monitoring the competition that involves
identifying competition, anticipating their moves, and
determining their strengths and weaknesses
Supplier Component
• Suppliers
– companies that provide material, human, financial,
and informational resources to other companies

Supplier dependence
vs.
Buyer dependence
Behaviors
• Opportunistic behavior
– when one party benefits at the expense of another

• Relationship behavior
– focuses on establishing a mutually beneficial, long-
term relationship between buyers and sellers
Industry Regulation Component
Regulations and rules that govern the practices
and procedures of specific industries, businesses,
and professions
Federal Regulatory
Agencies and Commissions
• Consumer Product Safety Commission
• Department of Labor
• Environmental Protection Agency
• Equal Employment Opportunity Commission
• Federal Communications Commission
• Federal Reserve System
• Federal Trade Commission
• Food and Drug Administration
• National Labor Relations Board
• Occupational Safety and Health Administration
• Securities and Exchange Commission
Advocacy Groups
Concerned citizens who band together to try to
influence the business practices of specific
industries, businesses, and professions

•Public communication

•Media advocacy

•Product boycott
Environmental Scanning
Searching the environment for important events or
issues that might affect an organization.

•Managers scan the environment to reduce


uncertainty.
•Organizational strategies affect environmental
scanning.
•Environmental scanning contributes to
organizational performance.
Interpreting Environmental Factors
• Threat or opportunity?

• Threat
– managers typically take steps to protect the company
from further harm

• Opportunity
– managers consider strategic alternatives for taking
advantage of those events to improve performance
Acting on Threats and
Opportunities: Cognitive Maps
Internal Environments

5. explain how organizational cultures


are created and how they can help
companies be successful
Creation and Maintenance of
Organizational Cultures
• Primary source of organizational culture is the
company founder.

• Organizational culture is sustained by…


– organizational stories
– organizational heroes
Keys to an Organizational
Culture that Fosters Success
Three Levels of Organizational
Culture
Changing Organizational Cultures
• Behavioral addition

• Behavioral substitution

• Change visible artifacts

• Hiring people with values and beliefs consistent


with desired culture

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