THE ENVIRONMENT &

CORPORATE CULTURE

ORGANIZATIONAL ENVIRONMENT

All elements existing outside the organizations

boundaries that have the potential to affect the
organization.

GENERAL ENVIORNMENT

The layer of the external environment that affects

the organization indirectly.

Organizational
Environment

General Environment

Labor Market

Employees

Le

ga
l/P
ol
it

Culture

Management

Suppliers
ic

al

n
o
c
E

ic
om

tur

Internal
Environment

Competitors

Inte
rn

Task
Environment
Customers

l
Sociocu
al

atio
nal

Technological

EXTERNAL ENVIRONMENTS
TWO LAYERS
Task environment.
General environment.

IMPORTANCE OF
INTERNATIONAL DIMENSION

Provides New:
Customers
Competitors
Suppliers
Shapes:
Social trends
Technological trends
Economic trends

EXAMPLES
High-quality, low-priced automobiles from Japan
and Korea have permanently changed the
American automobile industry.
In cell phones and handhelds, U.S.-based
companies face stiff competition from Koreas
Samsung, Finlands Nokia, and Taiwans High
Tech Computer Corporation (HTC).
For many U.S. companies, such as Google, domestic
markets have become saturated, and the only
potential for growth lies overseas.

TECHNOLOGICAL DIMENSION

Includes scientific and technological

advancements in specific industry and society at
large.

Today computers are

practically taken for granted
as one of the minimum tools
for doing business.

EXAMPLES
Computer networks, Internet access, handheld
devices, videoconferencing capabilities, cell
phones, and laptops are the minimum tools for
doing business.
A new generation of handhelds allows users to
check their corporate e-mail, daily calendars,
business contacts, and even customer orders from
any location with a wireless network.
Cell phones can now switch seamlessly between
cellular networks and corporate WiFi connections

SOCIO-CULTURAL DIMENSION
Demographic characteristics as well as the norms,
customs, and values of the general population.
Important characteristics are geographical and
population density, age, and education levels.

Key demographic trends in the United States:

African Americans and Hispanics will make up nearly
a quarter of the U.S. population by the year 2050.
Population and the workforce continue to age with
the baby boomers.
The fastest-growing living arrangement is singlefather households.

ORGANIZATIONS
ECONOMIC ENVIRONMENT

Consumer purchasing
power.
Unemployment rate.
Interest rates.
Frequency of mergers.

LEGAL-POLITICAL

Government regulations
Local
State

Federal

Considers political activities designed to

influence company behavior.

TASK ENVIRONMENT
CUSTOMERS
A concern is the power the internet has given
customers.
This new found power enables customers to
directly impact organizations in new ways.
Managers are using the internet to learn about
customers.

TASK ENVIRONMENT
COMPETITORS
Each industry is characterized by specific
competitive issues.
Part of the new workplace involves competitors
working together.

ADAPTING TO THE ENVIRONMENT

Boundary-Spanning
Inter-organizational Partnership
Mergers & Joint Ventures
Flexible Structure

LEVELS OF CORPORATE CULTURE

Culture
that can
be seen at
the
surface
level

Visibl
e

1. Artifacts, such as
dress, office layout,
symbols, slogans,
ceremonies

Invisib
le
2. Expressed values

3. Underlying assumptions
and deep beliefs, such as
people are lazy and cant
be trusted

Deeper values
and shared
understanding
s held by
organization
members

VISIBLE MANIFESTATIONS
Symbols
Stories
Heroes
Slogans
Ceremonies

ADAPTING TO THE ENVIRONMENT

1.

Boundary-Spanning Roles

Departments and boundary spanning roles link

and coordinate the organization with key
elements in the external environment.
Boundary spanners serve two purposes for the
organization: They detect and process
information about changes in the environment,
and they represent the organizations interests
to the environment.

2. Interorganizational Partnerships
An increasingly popular strategy for adapting to the environment is
to reduce boundaries and increase collaboration with other
organizations.

Disney has agreed to sell Rayovac brand batteries at all its theme
and water parks in packaging that features popular Disney
characters such as Mickey Mouse. This move will boost Rayovac
battery sales and increase consumer exposure to the Disney
brand.

Sony, Toshiba, and IBM are collaborating to produce a new,

tiny computer chip.

3. Mergers and Joint Ventures

A merger occurs when two or more organizations

combine to become one. Meezan Bank acquires
HSBC
A joint venture involves a strategic alliance or
program by two or more organizations. A joint
venture typically occurs when a project is too
complex, expensive, or uncertain for one firm to
handle alone. (ASF joint venture of Kings group
& airport security force)

TYPES OF CULTURE

Adaptability Culture

Emerges in an environment that requires fast response and

high-risk decision making. Managers encourage values
that support the companys ability to rapidly detect,
interpret, and translate signals from the environment into
new behavior responses.
For Example:
Cosmetic industry, as well as those involved in electronics, ecommerce, and fashion, often use an adaptability culture
because they must move quickly to respond to rapid
changes in the environment.

ACHIEVEMENT CULTURE

A results-oriented culture that values

competitiveness, personal initiative, and
achievement.

INVOLVEMENT CULTURE
Emphasizes an internal focus on the involvement
and participation of employees to adapt rapidly to
changing needs from the environment. This
culture places high value on meeting the needs of
employees, and the organization may be
characterized
by
a
caring,
family-like
atmosphere.

CONSISTENCY CULTURE

Uses an internal focus and a consistency

orientation for a stable environment.