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					The Environment and
   Corporate Culture
CHAPTER 3
                Are You Fit for Managerial
chapter3
                              Uncertainty?
 • The environment in which businesses operate
   is increasingly dynamic

 • Some managers cannot respond to
   environmental surprises

 • In an uncertain environment, managers need
   to facilitate new thinking, new ideas and new
   ways of working
                                                   2
chapter3              External Environment


Factors external to
the organizations
have been primarily
the focus of
management as a
discipline.

Press A for True
Press B for False




                                       3
chapter3          International Dimension

 • Globalization influences all other aspects of the
   external environment
    – 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 and ever-changing
                                                       4
chapter3 Technological Dimension

 • Scientific and technological advances
   – Specific industries
                           •   Desktop computers
   – Society at large
                           •   Networks
 • Impact:                 •   Internet Access
   – Organizations         •   Handheld devices
                           •   Videoconferencing
   – Managers
                           •   Cell phones
   – Customers             •   Laptop
                           •   WiFi
                           •   Medical advances
                                                   5
chapter3 Socio-Cultural Dimension

• Today’s demographics             Anyone considering doing
                                   business in China, according to
  are the foundation of            Manager's Shoptalk in Chapter
  the future workforce             3, should keep in mind all of
                                   the following rules except:

• Demographic trends               a. Business is always
  affect organizations                personal
                                   b. Don't skip the small talk
  globally  Norms
             Customs
                                   c. Remember that
                                      relationships are not short-
           Values of population
           Geographical
                                      term
            Distribution           d. Be efficient with use of time
           Population Density     e. Make contact frequently
           Age                                                 6
           Education Levels
chapter3              Economic Dimension

 ● General economic health
   ● Consumer purchasing power
                                      Customers and
   ● Unemployment rate                competitors are two
   ● Interest rates                   important sectors of
                                      the economic
                                      dimension of a firm's
 ● Recent Trends                      general environment.

   ● Frequency of mergers and         Press A for True
     acquisitions                     Press B for False

   ● Small business sector vitality
                                                          7
chapter3 Legal-Political Dimension


 • 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 in a
      socially responsible way
                                                      8
chapter3                    Natural Dimension
 • Growing importance and pressure
 • Concern for the environment
 • The natural dimension has no voice
 • Pressure comes from advocacy groups and
   managers
   – Eliminate non-biodegradable plastic bags from the
     environment

   – Improving efficiency of plants and factories

   – Investing in cleaner technologies                   9
               Environmental
chapter3
           Performance Index

                       2010Yale
                       Center for
                       Environmental
                       Law and Policy

                       Covering
                       environmental
                       public health
                       and eco system
                       vitality




                              10
chapter3                  Task Environment

 Sectors that have a direct working relationship with
 the organization:

      Customers                   Changes in
                                  these various
      Competitors                 sectors can
                                      create
      Suppliers                   tremendous
                                  challenges…
      Labor Market

                                                    11
chapter3                     External Environment

Integrated Computers,
Inc. wants to compile a
profile of the customer it
will target in its next
promotional mailing.
What environment
would this be found in?

a. Internal
   environment
b. Task environment
c. Work environment
d. General
   environment
e. None of these                              12
chapter3   Environmental Uncertainty




                                 13
                                    Adapting to the
chapter3
                                      Environment
  Boundary-spanning roles – link and coordinate
   the organization with external environment,
   seek:
     •   Business intelligence
     •   Competitive intelligence

  Interorganizational partnerships – reduce
   boundaries and begin collaborating with other
   organizations
  Mergers/joint ventures – legal combination of
   operations; legal collaboration for specific
   project                                       14
chapter3   Partnership Paradigm




                            15
                     The Internal Environment:
chapter3
                              Corporate Culture
 • Corporate culture should match the needs of the external
   environment
 • The importance of corporate culture has been growing
 • Culture is the set of key values, beliefs, understandings, and
   norms that members of an organization share
        • “how things are done”


    Symbols, stories, heroes, slogans, and ceremonies
    combine to create an organization's culture.

    Press A for True
    Press B for False
                                                                    16
chapter3         Culture




•   Symbols
•   Stories
•   Heroes
•   Slogans
•   Ceremonies
                     17
               Four Types of
chapter3
           Corporate Culture




                         18
               Shaping Corporate Culture
chapter3
                 for Innovative Response

 • Corporate culture plays a key role in learning
   and innovate responses

 • Bottom-line strategies are successful in the
   short-term

 • Successful companies balance culture and
   performance

 • Culture is the “glue” that holds the
   organization together                          19
                               Combining Culture and
chapter3
                                        Performance
What is likely to happen
to organizations that pay
little attention to cultural
values and instead
stress business results?

a.   Unlikely to survive
     for long
b.   No help for
     performance during
     hard times
c.   Profitable in short
     run but difficult to
     sustain over long
     term
d.   High performance
e.   None of these                               20
chapter3                 Cultural Leadership

 • Articulate a vision for the organizational culture
   that employees can believe in

 • The cultural leader heeds the day-to-day
   activities that reinforce the cultural vision

 • Managers communicate the cultural values
   through words and actions

 • Cultural leaders uphold their commitment to
   values during difficult times
                                                        21

				
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