Organizational Environments and Culture Flashcards
What is the External Environment, General Environment, and Specific Environment?
External environment = All events outside a company that has the potential to influence and affect the business.
General Environment = The economic, technological, sociological and political trends that indirectly affect all organizations.
Specific Environments = The customers, competitors, suppliers, industrial regulations, and advocacy groups that are unique to an industry and directly affect how a company does business.
Identify and explain the components of external environments.
Components of External environments:
Environmental change: The rate at which
a company’s environments change
Environmental complexity: The number of
external factors in the environment that
affect organizations.
Resource scarcity: The degree to which an organization’s external environment has an abundance or scarcity of critical organizational
resources
Uncertainty: how complex or simple the current external environment is based on how chnages to the other three components. Managers will typically try to predict changes in the external environment, which can be difficult in times of high uncertainty.
Explain environmental change with relation to Stable and dynamic environments. Additionally define punctuated equilibrium theory:
Environmental change is the rate a which a company general and specific environments chnage between being stable and dynamic.
Stable environments are when a companys rate of change is slow.
Dynamic environments are when a compnaies rate of change is quite fast.
The theory that measures the change between the two environments is call Puntuated Equilibrium Theory, which identifes that companies will typically go through long periods of stablility, where incremental changes occur, followed by brief periods of a dynamic environment. During this stage complex decisions will occur resulting in fundamental change only to then return to stability.
Explain Environmental complexity.
Environmental complexity is the number or intensity of external factors that affect an organization.
An organization can have a simple environment, where it has few environmental factors, or have a complex environment with numerous environmental factors.
Define resource scarcity and Uncertainty in relation to external environments.
Resource scarcity is the abundance or shortage of critical organizational resources in the organization’s external environment.
Uncertainty is the extent to which managers can understand or predict environmental change and anticipate trends that will affect their business.
Identify the four main components of the general environment and describe how each component affects the general environment.
The general environment consists of events and trends that affect all organizations. Because the economy influences basic business decisions, managers often use economic statistics and business confidence indices to predict future economic activity. Changes in technology, which transforms inputs into outputs, can be a benefit or a threat to a business. Sociocultural trends, like changing demographic characteristics, affect how companies run their businesses. Similarly, sociocultural changes in behavior, attitudes, and beliefs affect the demand for a business’s products and services. Court decisions and new federal and state laws have imposed much greater political/legal responsibilities on companies. The best way to manage legal responsibilities is to educate managers and employees about laws and regulations and potential lawsuits that could affect a business.
This can be broken down into the four major components of: The economy components The Technological components The Sociological components, and The Political/Legal components
Explain the process that companies use to make sense of their changing environments.
Managers use a three-step process to make sense of external environments: environmental scanning, interpreting information and acting on it. Managers scan their environments based on their organizational strategies, their need for up-to-date information, and their need to reduce uncertainty. When managers identify environmental events as threats, they take steps to protect the company from harm. When managers identify environmental events as opportunities, they formulate alternatives for taking advantage of them to improve company performance. Using cognitive maps can help managers visually summarize the relationships between environmental factors and the actions they might take to deal with them.
What is Organisational Culture?
Organizational culture is the set of key values, beliefs, and attitudes shared by
organizational members. Organizational cultures are often created by company
founders and then sustained through the telling of organizational stories and the celebration of organizational heroes. Adaptable cultures that promote employee
involvement, make clear the organization’s strategic purpose and direction, and
actively define and teach organizational values and beliefs can help companies
achieve higher sales growth, return on assets, profits, quality, and employee satisfaction. Organizational cultures exist on three levels: the surface level, where cultural artifacts and behaviors can be observed; just below the surface, where values and beliefs are expressed; and deep below the surface, where unconsciously held assumptions and beliefs exist. Managers can begin to change company cultures by focusing on the top two levels and by using behavioral substitution and behavioral addition, changing visible artifacts, and selecting job applicants with values and beliefs consistent with the desired company culture.
Identify components that make a successful organisational culture.
Thr four major parts to ensuring an organizational culture is successful are: Adaptability Consistency Clear vision and Involvement
These can be expressed by an organization having a clear company mission and a consistent organizational culture. A consistent organizational culture is maintained when a company actively defines and teaches organizational values, beliefs, and attitudes to all new employees and the general public.
Identify two ways in which managers can change organisational culture.
Behavioral Addition:
The process of having managers and employees perform new behaviors that are central to and symbolic of the new organizational culture that a company wants to create.
Behavioral Substitution:
The progress of having managers and employees perform new behaviors central to the “new” organizational culture in place of “old” behavior.
What is the Internal Environment?
The internal environments are the events and trends inside of an organization that affects management, employees and organizational culture.
Identify the four main components of the specific environment and describe how each components affects the specific environment.
The specific environment is made up of the five components:
The Customer components - relies on customer satisfaction
The Competitor component - relies on competitive analysis
The Supplier component - relies on supplier dependence
The industries regulation components - which is affected by buyer dependance, opportunistic behavior, relationship behavior and industrial regulations.
Advocacy groups - Which are influenced by Public communications, media advocacy, and product boycotts.
Companies can monitor customers’ needs by identifying customer problems after they occur or by anticipating problems before they occur. Because they tend to focus on well-known competitors, managers often underestimate their competition or do a poor job of identifying future competitors. Suppliers and buyers are very dependent on each other, and that dependence sometimes leads to opportunistic behavior, in which one benefits at the expense of the other. Regulatory agencies affect businesses by creating rules and then enforcing them. Advocacy groups cannot regulate organizations’ practices. Nevertheless, through public communications, media advocacy, and product boycotts, they try to convince companies to change their practices.
