Chap 3: Organizational culture & External environment

omnipotent view of managers

success of organization depends directly on managers, quality of organization relies on quality of managers, are directly responsible for organization’s performance

symbolic view of managers

success of organization depends on external forces, ability of managers to affect outcomes is influenced by external forces

organizational culture

a system of shared meanings & common beliefs held by organizational members, determines how members act toward each other

strong cultures

are cultures in which key values are deeply held & wisely held, have a strong influence on organizational members

workplace spirituality

the recognition that ppl have inner life. And it nourishes & is nourished by meaningful work that takes place in the context of community

external environment

factors & forces outside the organization that affect organization’s performance 

specific environment

external forces that have a direct & immediate impact on organization

general environment

composed of dimensions in the broader society that influence an industry and the firms within it (PESTLE)

environmental uncertainty

• the extent to which managers have knowledge of & are able to predict the change of their organization’s external environment

• include: degree of complexity & degree of change (use environmental complexity matrix)

environmental complexity

• many or few components in environment

• components are (not)similar to another

• High or minimal need for sophisticated components

stakeholders

constituencies in the organization’s environment that are affected by the organization’s decisions & actions

dimensions of organizational culture

• attention to detail

• outcome orientation

• ppl orientation

• team orientation

• aggressiveness

• stability

• innovation & risk taking

5 forces of competitive environment

• threat of new entrants

• bargaining power of suppliers

• bargaining power of buyers

• threat of substitutes

• rivalry

factors affecting strength of organizational culture

• size of organization

• age of organization

• rate of employee turnover

• strength of original culture

• clarity of cultural values & beliefs

issues of organizational culture

• ethical culture

• innovative culture

• customer responsive culture

barriers to entry

• economies of scale

• product differentiation

• capital requirements

• switching costs

• access to distribution channels

• cost disadvantages independent of scale

• G policy

demographic segment

Covers population characteristics that affect markets and workforce:

• Population size, age structure, geographic distribution

• Ethnic mix, income distribution

→ influences market size, consumer demand, and labor availability.

economic segment

Economic conditions that determine consumer purchasing power and business costs:

• Inflation, interest rates, trade deficits/surpluses, budget deficits/surpluses

• Personal and business savings rates, GDP

→ Impacts consumer spending, capital costs, and market growth.

political/legal segment

Government policies and legal factors shaping the business environment:

• Antitrust laws, taxation laws, deregulation philosophies

• Labor training laws, educational policies

→ Influences competition level, compliance (tuân thủ) costs, and stability of operations.

social segment

Social values, cultural norms, and lifestyle trends affecting demand and workforce:

• Women in the workforce, diversity in workforce

• Attitudes about work–life quality

• Shifts in career/work preferences, product and service preferences

→ Shapes consumer tastes, employee expectations, and organizational culture.

technological segment

Innovations and technological progress:

• Product innovations, applications of knowledge

• R&D spending (public & private)

• New communication technologies

→ Drives efficiency, new product development, and competitive advantage.

global segment

International factors and global market dynamics:

• Political events, critical global markets

• Newly industrialized countries, different cultural and institutional attributes

→ Determines global opportunities, risks, and international competition.

sustainable physical environment segment

Environmental and ecological factors:

• Energy consumption, renewable energy, reducing environmental footprint

• Water availability, eco-friendly products

• Coping with natural or man-made disasters

→ Increasingly important for sustainability, CSR (corporate social responsibillity), and long-term viability (vận hành lâu dài).