Organizational Environments and Cultures

- PRINCIPLES OF watchfulness - CHAPTER 3 ORGANIZATIONAL ENVIRONMENTS AND CULTURES 1. HOW CHANGING ENVIRONMENTS AFFECT ORGANIZATIONS Environmental reposition The stride at which a anyiances general and specific milieu changes * Stable surrounds the regularise of environmental change is slow * Dynamic environments the rate of environmental change is fast * Punctuated equilibrium theory companies go through with(predicate) long periods of stability, followed by a short complex period of slashing change (revolutionary periods) to later return to stability * Environmental complexity Refers to the moment and intensity of international factors in the environment that affect systems * Simple environments hardly a(prenominal) environmental factors Complex environments many environmental factors * Resource scarcity Refers to the abundance or shortage of critical organizational resources in an organization external environment * Uncertainty How well managers peck understand or p revise the external changes and trends affecting their cable * Uncertainty is lowest when environmental change and complexity are at low takes and resource scarcity is miniature (if environment is non too complicated and doesnt change a good deal its easy to predict) . FOUR COMPONENTS OF GENERAL ENVIRONMENT 1. Economy * It influences basal argumentation decisions such as whether to hire more employees, expand production, or take out loans to purchase * In a growing preservation more products are bought and sold, more people work and salaries rise and viceversa (in decrease economy) * Business Confidence Indices shows how confidente actual managers are about future business growth 2. Political/Legal Trends Includes legislation, regulations, and court decisions that manage and regulate business behaviour * New laws and regulations continue to impose additional responsibilities to companies 3. Sociocultural Trends * demographic characteristics, general behaviour, attitudes an d beliefs of people in a particular society 4. expert Trends * Refers to the knowledge, tools and techniques used to transform inputs into outputs 3. FIVE COMPONENTS OF SPECIFIC ENVIRONMENTThe specific environment is the environment that is unique to a firms indus sample and that directly affects the right smart it conducts day-to-day business. 1. Customer * Monitoring customers changing wants and call for is critical to business success. It can be done in ii ways i. Reactive customer monitoring identifying and addressing customer trends and problems after they transcend ii. Proactive customer monitoring identifying and addressing customer needs, trends and issues before they occur 2. contest Companies need to keep close track of what their competitors are doing * To do so, they carry through a competitive analysis * A competitive analysis involves deciding who your competitors are, anticipating competitors moves, and determining competitors strenghts and weaknesses 3. Suppli er * Supplier dependence the degree to which a lodge relies on that supplier because of the importance of the suppliers product to the familiarity * Buyer dependence the degree to which a supplier relies on a buyer because of the importance of that buyer to the suppliers sales * A igh degree of supplier or buyer dependence can trine to oportunistic behaviour (benefiting at the expense of the other) * In contrast, relationship behaviour focalisationes on establishing a mutually beneficial, long-term relationship between buyers and suppliers 4. Industry Regulations * Regulations and rules that govern the practices and procedures of specific industries, businesses and professions * Unlike the political/legal component of the general environment, this does not affect all businesses 5. Advocacy Groups These are congregations of concerned citizens who band unneurotic to try to influence the business practices of specific industries, businesses and professions * e. g. environmental a dvocacy groups try to influence manufacturers to pollute less * Ways in which advocacy groups can influence businesses iii. Public communications voluntary participation of media industry to throw out the groups message iv. Media advocacy involves framing the groups concern as public issues that affect everyone, forcing media coverage v.Product boycott advocacy groups actively try to persuade consumers not to purchase a companys product or service 4. MAKING aesthesis OF CHANGING ENVIRONMENTS Because external environments can be dynamic, confusing and complex, managers use a three-step process to make sense of the changes in their external environments 1. Environmental see * Searching the environment for important events or issues that might affect the organization * Manager scan the environment to reduce incertainty 2.Interpreting Environmental factors * After scanning, the company determines what environmental events and issues mean to the organization. * Distinguish environment al events as either threats or opportunities 3. Actiong on threats and opportunities * Managers decide how to respond to these environmental factors * Because it is impossible to comprehend all the factors and changes, managers rely on Cognitive maps that summarize the perceived relationships between environmental factors and possible organizational actions 5.INTERNAL ENVIRONMENTS ORGANIZATIONAL CULTURE Organizational culture is the preen of beliefs, values and attitudes shared b members of an organization. * Creating an Organizational Culture * The founder is the primitive source of an organizations culture * Founders create organizations at their have image * When founders are gone, culture is kept with i. Stories to emphasize culturally self-consistent assumptions, decisions, and actions ii. Heroes people admired for their qualities and achievements within the organization. Successful Organizational Cultures * Are universal * Have employee involvement * Have a clear company spate * Are Consistent, Strong culture (even though strong cultures reduce adaptability) * changing Organizational Cultures * Culture has three levels iii. Seen (surface level) iv. Heard (expressed values & beliefs) v. Believed (unconscious assumptions & beliefes) * Managers should only focus on the parts of the culture they can control, those are the surface level items and expressed values and beliefs