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03-Business Environment and Organizational Culture

The document discusses the business environment as an open system that includes various elements such as suppliers, customers, and competitors, which directly and indirectly influence organizations. It emphasizes the importance of organizational culture, defining it as a system of shared meanings that shapes employee behavior and commitment. Additionally, it outlines strategies for environmental management and the significance of strong organizational cultures in enhancing performance and employee integration.

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Bitha Cahya
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2 views17 pages

03-Business Environment and Organizational Culture

The document discusses the business environment as an open system that includes various elements such as suppliers, customers, and competitors, which directly and indirectly influence organizations. It emphasizes the importance of organizational culture, defining it as a system of shared meanings that shapes employee behavior and commitment. Additionally, it outlines strategies for environmental management and the significance of strong organizational cultures in enhancing performance and employee integration.

Uploaded by

Bitha Cahya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Business Environment

and Organizational
Culture
The Organization As An Open System
Environment

System

Inputs Transformation Outputs


Raw materials Employee’s work Products and services
Human resources activities Financial results
Capital Management Information
Technology activities Human results
Information Technology and
operations methods

Feedback

Environment
2
Business Environment

Business Environment is
individual and organization
that exist outside the
business and have
influence direct and
indirect to the business.
The Business Environment
Business Environment Elements
 Supplier – supply materials, machine,
service and information used to
produce its products and services
 Financial institution – the capital
resources that available for the firm
 Customers – targets for the firm to
market its products and services
 Competitor - all of the entities that
compete with the firm in marketplace
Business Environment Elements
 Stockholders/owners – persons who are
invest money in the firm and represent the
high level of management
 labor union – organization of skilled and
unskilled workers
 The community – people in the area
where the firm perform its operation
 Government – federal, state and local
level government that provides not only
constraints in the form of law, regulation,
and taxes taking but also provides
assistance in form of purchases,
information and funds.
Organizational Stakeholders
Environmental Uncertainty
 The extent to which managers have
knowledge of and are able to predict
change their organization’s external
environment is affected by:
 Complexity of the environment: the
number of components in an organization’s
external environment.
 Degree of change in environmental
components: how dynamic or stable the
external environment is.
Environmental management
Environmental management – how to manage the
environmental elements by executing strategies
that alter uncertainly environment to a certain
extent

Environmental Management Strategy:


 Independent Strategy – carry out its own

resources to make better its environment


 Cooperative Strategy – involve working with

other environmental element for the same purpose


 Strategic Maneuvering – try to alter its

environment
Environmental management

Basic Specific Strategy Example


Strategy
Independent Competitive Product differentiation
Strategy aggression Aggressive Pricing and
Legal Action Advertising
Political Action Suits brought against
competitors
Lobbying
Cooperative Co-optation Consumer representatives
Strategy Coalition, Aliance Industry Association
Strategic Domain Selection Entry in specific market
Maneuver Diversification Wide product mix
ing Merger and Merger with competitors
Acquisition
The Organization’s Culture
 Organizational Culture
 A system of shared meanings and common
beliefs held by organizational members that
determines, in a large degree, how they act
towards each other.
 “The way we do things around here.”
 Values, symbols, rituals, myths, and practices
 Implications:
 Culture is a perception.
 Culture is shared.
 Culture is descriptive.
Dimensions of Organizational Culture
Strong versus Weak Cultures
 Strong Cultures
 Are cultures in which key values are deeply
held and widely held.
 Have a strong influence on organizational
members.
 Factors Influencing the Strength of
Culture
 Size of the organization
 Age of the organization
 Rate of employee turnover
 Strength of the original culture
 Clarity of cultural values and beliefs
Benefits of a Strong Culture
 Creates a stronger employee
commitment to the organization.
 Aids in the recruitment and
socialization of new employees.
 Fosters higher organizational
performance by instilling and
promoting employee initiative.
Organizational Culture
 Sources of Organizational Culture
 The organization’s founder
 Vision and mission
 Past practices of the organization
 The way things have been done
 The behavior of top management
 Continuation of the Organizational Culture
 Recruitment of like-minded employees who
“fit”
 Socialization of new employees to help them
adapt to the culture
How an Organization’s Culture Is
Established and Maintained
Organization Culture Issues
 Creating an Ethical  Creating an
Culture Innovative Culture
 High in risk  Challenge and
tolerance involvement
 Low to moderate  Freedom
aggressiveness  Trust and openness
 Focus on means as  Idea time
well as outcomes  Playfulness/humor
 Conflict resolution
 Debates
 Risk-taking

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