BUS250 Chapter 3 - Organizational Environments and Cultures

external environments

all events outside a company that can influence or affect it

environmental change, environmental complexity, and resource scarcity

the three basic characteristics of environments

environmental change

the rate at which a company’s general and specific environments change

stable environment

an environment that has a slow rate of change

dynamic environment

an environment that has a fast rate of change

punctuated equilibrium theory

states that companies go through long periods of stability during which incremental changes occur, followed by short periods of dynamic, fundamental change, and then a new equilibrium

environmental complexity

the number and intensity of external factors in the environment that affect organizations

resource scarcity

the abundance or shortage of critical organizational resources in an organization’s external environment

uncertainty

the extent to which managers can understand or predict which environmental changes and trends will affect their businesses

general environment

the economic, technological, sociocultural, and political/legal trends that indirectly affect all organizations

Business Confidence Indices (BCI)

shows the managers’ level of confidence about future business growth

technology

knowledge, tools, and techniques used to transform inputs into outputs

sociology

demographic characteristics, general behavior, attitudes, and beliefs of people in society

politics and law (legal)

includes the legislation, regulations, and court decisions that govern and regulate business behavior

specific environment

elements unique to an industry that directly affect how a company does business

reactive monitoring

identifying and addressing customer trends and problems after they occur

proactive monitoring

identifying and addressing customer needs, trends, and issues before they occur

competitors

companies in the same industry that sell similar products or services to customers

competitive analysis

the process for monitoring the competition that involves identifying competitors, anticipating their moves, and determining their strengths and weaknesses

suppliers

companies that provide material, human, financial, and informational resources to other companies

supplier dependence

the degree to which a company relies on a supplier because of the importance of the supplier’s product to the company and the difficulty of finding other sources for that product

buyer dependence

the degree to which a supplier relies on a buyer because of the importance of that buyer to the supplier and the difficulty of finding other buyers for its products

opportunistic behavior

a transaction in which one party in the relationship benefits at the expense of the other

relationship behavior

the establishment of mutually beneficial, long-term exchanges between buyers and suppliers

industry regulation

regulations and rules that govern business practices and procedures of specific industries, businesses, and professions

advocacy groups

concerned citizens who band together to try to influence the business practices of specific industries, businesses, and professions

public communications

an advocacy group tactic that relies on voluntary participation by the news media and the advertising industry to get the advocacy group’s message out

media advocacy

an advocacy group tactic that involves framing issues as public issues, exposing questionable, exploitative, or unethical practices, and forcing media coverage by buying media time or creating controversy that is likely to receive extensive news coverage

product boycott

an advocacy group tactic that involves protesting a company’s actions by persuading consumers not to purchase its product or service

environmental scanning

searching the environment for important events or issues that might affect an organization

cognitive maps

graphic descriptions of how managers believe environmental factors relate to possible organizational actions

internal environment

events and trends inside an organization that affect management, employees, and organizational culture

organizational culture

values, beliefs, and attitudes shared by organizational members

organizational stories

stories told by organizational members to make sense of organizational events and changes and to emphasize culturally consistent assumptions, decisions, and actions

organizational heroes

people celebrated for their qualities and achievements within an organization

organizational ceremonies

gatherings in which symbolic acts commemorate or celebrate notable achievements or changes

company mission

a company’s reason or purpose for existing

consistent organizational culture

a company culture in which the company actively defines and teaches organizational beliefs, values, and attitudes

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 process of having managers and employees perform new behaviors central to the new organizational culture in place of behaviors that were central to the old organizational culture

visible artifacts

visible signs of an organization’s culture, such as the office design and layout, company dress code, and company benefits/perks