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Chapter 3 The Environment and Corporate Culture The Environment and Corporate Culture The External Environment The external organizational environment includes all elements existing outside the organization's boundaries that have the potential to afford the organization. The external environment is further conceptualized as having two layers: General environment Task environment The Environment and Corporate Culture The External Environment General environment: the layer of the external environment that affects the organization indirectly. It includes: social, demographic and economic factors that influence all organizations about equally. Task environment: the layer of the external environment that directly influences the organization’s operations and performance. It includes: competitors, suppliers and customers The Environment and Corporate Culture The Internal Environment The environment that includes the elements within the organization's boundaries. It includes: current employees, management and corporate culture, which defines employee behaviour in the internal environment and how well the organization will adapt to the external environment. The Environment and Corporate Culture The Organization-Environment Relationship Why do organizations care so much about factors in the external environment? The reason is that the environment creates uncertainty for organization manager, and they must respond by designing the organization to adapt to the environment. The Environment and Corporate Culture The Organization-Environment Relationship Environment Uncertainty Managers do not have sufficient information about environmental factors to understand and predict environment needs and changes Adapting to the Environment Boundary-spanning Roles Inter-organizational Partnerships Mergers and Joint Ventures The Environment and Corporate Culture The Internal Environment: Corporate Culture Culture is the set of key values, beliefs, understandings and norms that members of an organization share. Culture can be analyzed in 3 levels: Surface Level are visible artifacts, such as dress, office layout, symbols, slogans, ceremonies Deeper level are invisible, such as expressed values and understanding Assumptions and beliefs The Environment and Corporate Culture Environment and Culture Types of Corporate Cultures Adaptability Culture Values that support the company’s ability to interrupt and translate signals from the environment into new behavior responses. Achievement Culture Results-oriented that values competitiveness, personal initiative, and achievement Involvement Culture Places high value on meeting the needs of employees and values cooperation and equality Consistency Culture Values and rewards a methodical, rational, orderly way of doing things * * * * * * * * * * * * * * * *