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The Environment and Corporate Culture

The Environment and Corporate Culture. Environment Organizations are open systems which import information from its environment and use double loop learning to adapt the organization to changes in the environment. External environment.

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The Environment and Corporate Culture

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  1. The Environment and Corporate Culture

  2. EnvironmentOrganizations are open systems which import information from its environment and use double loop learning to adapt the organization to changes in the environment.

  3. External environment • General Environment International Technological Sociocultural Economic Legal-Political

  4. International environment • Globalization • Global competition • Cross cultural dynamics • Are the theories and practices of American management compatible in other countries?

  5. Technological • Technology is rapidly changing the business environment • Information and communications • Technology pertaining to speicific industries • The interaction of technology and people – socio technical systems

  6. Sociocultural • Population distribution • Population density • Age • Education levels

  7. Economic • Consumer purchasing power • Unemployment • Interest rates • Fuel prices • Competition from other countries

  8. Legal political • OSHA • EPA • Law suits • Consumer protection laws • Product safety • Information and labeling

  9. External Environment • Driving Forces have an impact over time Examples Health consciousness Political conservatism Computerization Demographic shifts toward Asian and Hispanic minorities The baby boom generation

  10. Task Environment • The five forces Model of Porter • Customers • Suppliers • Competitors • Substitiutes • New Entrants

  11. Relationship of the company to its environment • Organic organization – open system • Mechanistic-closed system

  12. How organizations react to environmental changes • Open systems maintain relationships with their environments and react to changes (effectiveness) • Environmental Scanning • Detects changes in the environment over time.

  13. How organizations influence environmental changes • Advertising • Change demand for product • Public Relations • Change the image of the company • Political Activity and trade organizations • Influence the legal and politcal environment

  14. Internal environment • CultureTechnologyStructurePhysical facilitiesEmployeesManagement

  15. Internal environment • Physical Structure • Plants • Sales Offices • Showrooms • Computer network • ICT • Social Structure • Formal • Informal

  16. Internal environmentThe Social Structure • Formal Social Structure • Official documents • Org charts • Bilaws • Budgets • Contractual Boundaries • Departments • Sub-departments

  17. Internal environmentThe Social Structure • Informal Structure • Rules of behavior • Shared meaning • Corporate culture

  18. Corporate Culture

  19. Defined as: • Key values, beliefs, understanding and norms shared by members of the organization • It is their shared reality

  20. Embodied superficially by: • Visible artifacts • dress • patterns of behavior • symbols • ceremonies • layout

  21. Embodied at a deeper level by • Stories • Language • Myths • Heroes

  22. There are different types of cultures but it is crucial that the culture be adaptive to the changes in the environment less the organization become extinct e.g. the dinosaur

  23. Types of Cultures

  24. Adaptability Culture • If the environment requires fast response and high risk decision making • Managers encourage values that support ability to detect, interpret and translate signals from the environment into responsive behavior

  25. Achievement Culture • Environment requires high level of service over a long time without much change • Results oriented excellence. Achieve difficult ambitious targets

  26. Clan Culture • If we keep our people happy, and help get their needs met, they will meet the needs of a changing environment. • Focus on cooperation, consideration, no status differences

  27. Bureaucratic Culture • Focus inward • Less concern about the environment and more about following the rules • Thrifty, orderly way of doing things

  28. Changing demands for managing corporate culture • Culture the glue that holds the organization together • By definition, shared values and realities must be shared • Dissemination of culture is done by • Picking the right people who will fit into the corporate value system • Socializing people

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