Org Env
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The Organization’s Environment • External Environment – General environment is everything outside an organization’s boundaries—economic, legal, political, socio-cultural, international, and technical forces. – Task environment is composed of specific groups and organizations that effect the firm.
• Internal Environment – Conditions and forces within an organization.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–1
The Organization and Its Environments
Internal environment Task environment General environment
External environment
Copyright © by Houghton Mifflin Company. All rights reserved.
2–2
The External Environment • The General Environment – The set of broad dimensions and forces in an organization’s surroundings that create its overall context. – Economic forces are the overall health and vitality of the economic system in which the organization operates. – Technological forces refer to the methods available for converting resources into products or services.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–3
The External Environment (cont’d) • The General Environment (cont’d) – Sociocultural forces include the customs, norms, values, and demographic characteristics of the society in which the organization functions. – Political-legal forces are the extent of government regulation of business and the general relationship between business and government.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–4
The External Environment (cont’d) • The Task Environment – Specific groups affecting the organization • Competitors seeking the same resources as the organization. • Customers who acquire an organization’s products or resources. • Suppliers that provide resources for the organization. • Regulators (agencies and interest groups) that control, legislate, or influence the organization’s policies and practices. • Internal Rivalry among the industry also puts lot of pressure on organizations. Copyright © by Houghton Mifflin Company. All rights reserved.
2–5
McDonald’s Task Environment
Regulators • Food and Drug Administration • Securities and Exchange Commission • Environmental Protection Agency
Competitors • Burger King • Wendy’s • Subway • Dairy Queen
McDonald’s
Strategic Partners • Wal-Mart • Disney • Foreign partners
Customers • Individual consumers • Institutional customers
Suppliers • Coca-Cola • Wholesale food processors • Packaging manufacturers
Internal environment Task environment Copyright © by Houghton Mifflin Company. All rights reserved.
Figure 2.1 2–6
Five-Forces Analysis (Porter)
Copyright © by Houghton Mifflin Company. All rights reserved.
2–7
The Internal Environment • Conditions and stakeholder forces within an organization – Owners with legal property rights to a business. – Board of directors elected by the stockholders to oversee the general management of the firm to best serve the stockholders’ interest. – Employees who work for the firm and have a vested interest in its continued operation and existence. – Physical work environment of the organization and the work that people do.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–8
Individual Ethics In Organizations • Ethics – An individual’s personal beliefs regarding what is right and wrong or good and bad.
• Ethical Behavior – This behavior is in the eye of the beholder. However, it also refers to behavior that conforms to generally accepted social norms.
• Examples of Unethical Behavior – “Borrowing” office supplies for personal use. – “Surfing the Net” on company time.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–9
Social Responsibility and Organizations • Social Responsibility – The set of obligations (to behave responsibly) that an organization has to protect and enhance the social context in which it functions.
• Areas of Social Responsibility – Stakeholders: customers, employees, and investors. – The natural environment: environmentally sensitive products, recycling, and public safety. – The general social welfare: charitable contributions, and support for social issues such as child labor and human rights. Copyright © by Houghton Mifflin Company. All rights reserved.
2–10
The Cultural Environment • Language – In Japanese the word “hai” can mean either “yes” or “I understand.” – General Motors’ brand name “Nova” pronounced as “no va” in Spanish means “doesn’t go.”
• The Meaning of Colors – Green is popular in Muslim countries, yet it signifies death in other countries. – Pink is associated with feminine characteristics in the U.S.; yellow is the most feminine color in other countries. Copyright © by Houghton Mifflin Company. All rights reserved.
2–11
The Organization and Culture • Organization Culture – The collection of values, beliefs, behaviors, customs, and attitudes that characterize a community of people.
• The Importance of Organization Culture – Culture determines the overall “feel” of the organization, although it may vary across different segments of the organization. – Culture is a powerful force that can shape the firm’s overall effectiveness and long-term success.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–12
The Organization’s Culture • Determinants of Organization Culture – Organization’s founder (personal values and beliefs). – Symbols, stories, heroes, slogans, and ceremonies that embody and personify the spirit of the organization. – Corporate success that strengthens the culture. – Shared experiences that bond organizational members together.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–13
Organization Culture (cont’d) • Managing Organization Culture – Understand the current culture to understand whether to maintain or change it. – Articulate the culture through slogans, ceremonies, and shared experiences. – Reward and promote people whose behaviors are consistent with desired cultural values.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–14
Organization Culture • Changing Organization Culture – Develop a clear idea of what kind of culture you want to create. – Bring in outsiders to important managerial positions. – Adopt new slogans, stories, ceremonies, and purposely break with tradition.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–15
• Internal Environment – Conditions and forces within an organization.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–1
The Organization and Its Environments
Internal environment Task environment General environment
External environment
Copyright © by Houghton Mifflin Company. All rights reserved.
2–2
The External Environment • The General Environment – The set of broad dimensions and forces in an organization’s surroundings that create its overall context. – Economic forces are the overall health and vitality of the economic system in which the organization operates. – Technological forces refer to the methods available for converting resources into products or services.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–3
The External Environment (cont’d) • The General Environment (cont’d) – Sociocultural forces include the customs, norms, values, and demographic characteristics of the society in which the organization functions. – Political-legal forces are the extent of government regulation of business and the general relationship between business and government.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–4
The External Environment (cont’d) • The Task Environment – Specific groups affecting the organization • Competitors seeking the same resources as the organization. • Customers who acquire an organization’s products or resources. • Suppliers that provide resources for the organization. • Regulators (agencies and interest groups) that control, legislate, or influence the organization’s policies and practices. • Internal Rivalry among the industry also puts lot of pressure on organizations. Copyright © by Houghton Mifflin Company. All rights reserved.
2–5
McDonald’s Task Environment
Regulators • Food and Drug Administration • Securities and Exchange Commission • Environmental Protection Agency
Competitors • Burger King • Wendy’s • Subway • Dairy Queen
McDonald’s
Strategic Partners • Wal-Mart • Disney • Foreign partners
Customers • Individual consumers • Institutional customers
Suppliers • Coca-Cola • Wholesale food processors • Packaging manufacturers
Internal environment Task environment Copyright © by Houghton Mifflin Company. All rights reserved.
Figure 2.1 2–6
Five-Forces Analysis (Porter)
Copyright © by Houghton Mifflin Company. All rights reserved.
2–7
The Internal Environment • Conditions and stakeholder forces within an organization – Owners with legal property rights to a business. – Board of directors elected by the stockholders to oversee the general management of the firm to best serve the stockholders’ interest. – Employees who work for the firm and have a vested interest in its continued operation and existence. – Physical work environment of the organization and the work that people do.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–8
Individual Ethics In Organizations • Ethics – An individual’s personal beliefs regarding what is right and wrong or good and bad.
• Ethical Behavior – This behavior is in the eye of the beholder. However, it also refers to behavior that conforms to generally accepted social norms.
• Examples of Unethical Behavior – “Borrowing” office supplies for personal use. – “Surfing the Net” on company time.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–9
Social Responsibility and Organizations • Social Responsibility – The set of obligations (to behave responsibly) that an organization has to protect and enhance the social context in which it functions.
• Areas of Social Responsibility – Stakeholders: customers, employees, and investors. – The natural environment: environmentally sensitive products, recycling, and public safety. – The general social welfare: charitable contributions, and support for social issues such as child labor and human rights. Copyright © by Houghton Mifflin Company. All rights reserved.
2–10
The Cultural Environment • Language – In Japanese the word “hai” can mean either “yes” or “I understand.” – General Motors’ brand name “Nova” pronounced as “no va” in Spanish means “doesn’t go.”
• The Meaning of Colors – Green is popular in Muslim countries, yet it signifies death in other countries. – Pink is associated with feminine characteristics in the U.S.; yellow is the most feminine color in other countries. Copyright © by Houghton Mifflin Company. All rights reserved.
2–11
The Organization and Culture • Organization Culture – The collection of values, beliefs, behaviors, customs, and attitudes that characterize a community of people.
• The Importance of Organization Culture – Culture determines the overall “feel” of the organization, although it may vary across different segments of the organization. – Culture is a powerful force that can shape the firm’s overall effectiveness and long-term success.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–12
The Organization’s Culture • Determinants of Organization Culture – Organization’s founder (personal values and beliefs). – Symbols, stories, heroes, slogans, and ceremonies that embody and personify the spirit of the organization. – Corporate success that strengthens the culture. – Shared experiences that bond organizational members together.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–13
Organization Culture (cont’d) • Managing Organization Culture – Understand the current culture to understand whether to maintain or change it. – Articulate the culture through slogans, ceremonies, and shared experiences. – Reward and promote people whose behaviors are consistent with desired cultural values.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–14
Organization Culture • Changing Organization Culture – Develop a clear idea of what kind of culture you want to create. – Bring in outsiders to important managerial positions. – Adopt new slogans, stories, ceremonies, and purposely break with tradition.
Copyright © by Houghton Mifflin Company. All rights reserved.
2–15
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