MANAGEMENT

RICHARD L. DAFT
The Environment and
Corporate Culture
CHAPTER 3
chapter3 Learning Outcomes
• Describe the general and task environments and the dimensions
of each.

• Explain the strategies managers use to help organizations adapt to

an uncertain or turbulent environment.

• Define corporate culture and give organizational examples.

• Explain organizational symbols, stories, heroes, slogans, and

ceremonies and their relationship to corporate culture.

• Describe how corporate culture relates to the environment.

• Define a cultural leader and explain the tools a cultural leader uses
to create a high-performance culture.

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 Are You Fit for Managerial
chapter3
Uncertainty?
• The environment in which businesses
operate are increasingly dynamic

• Some managers cannot respond to

environmental surprises

• In an uncertain environment, managers

need to facilitate new thinking, new ideas
and new ways of working
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chapter3 External Environment

● General environment – affects indirectly

● Task environment
- Affects directly
- Influences operations and performances

● Internal environment – elements within the

organization’s boundaries

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chapter3 International Dimension

• Events originating
● Portioninofforeign countries
the external
environment that
• Impacts all aspects of the external environment
represents events
originating in foreign
– New competitors
countries as well as
– New customers
opportunities for U.S.
– New suppliers
companies in other
• Today, all countries.
companies globally

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chapter3 Technological Dimension

• Scientific and technological advances

– Specific industries
• Desktop computers
– Society at large • Networks
• Internet Access
• Impact:
• Handheld devices
– Organizations • Videoconferencing
– Managers • Cell phones
• Laptop
– Customers • WiFi
• Medical advances

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chapter3 Socio-Cultural Dimension
• Dimension of the general
• Today’s demographics
environment
– Demographic
are the foundation of thecharacteristics
– Norms
future workforce – Norms
– Customs
– Customs
– Values
• Demographic trends – Values of population
affect organizations – Geographical Distribution
– Population Density
globally – Age
– Education Levels

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chapter3 Economic Dimension

● General economic health

● Consumer purchasing power
● Unemployment rate
● Interest rates

● Recent Trends
● Frequency of mergers and
acquisitions
● Small business sector vitality
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chapter3 Legal-Political Dimension

• Federal, state, and local government

regulations

• Political activities designed to

influence company behavior

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chapter3 Natural Dimension
• Concern for the environment

• The natural dimension has no voice

• Pressure comes from advocacy and managers

– Eliminate nonbiodegradable plastic bags from the
environment

– Improving efficiency of plants and factories

– Investing in cleaner technologies

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chapter3 Task Environment

Sectors that have a direct working relationship with

the organization:
 Customers Changes in
these various
 Competitors sectors can
create
 Suppliers tremendous
challenges…
 Labor Market

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chapter3 External Environment

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chapter3 Environmental Uncertainty

Management
must adapt to
changes

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 Adapting to the
chapter3
Environment
• Boundary-Spanning Roles: coordinating
the organization with key elements in the
external environment
• Interorganizational Partnerships:
collaborating with other organizations
• Mergers: combination of two
organizations
• Joint Ventures: an alliance of
organizations for a specific project
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chapter3 Partnership Paradigm

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 The Internal Environment:
chapter3
Corporate Culture
• Corporate culture should match the needs
of the external environment

• The importance of corporate culture has

been growing

• Culture is a pattern of shared values

• “how things are done”

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chapter3 Culture

• Symbols
• Stories
• Heroes
• Slogans
• Ceremonies
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chapter3 Environment and Culture

• The external environment influences

culture

• The internal environment should embody

the requirements for success

• Manager’s must pay attention to culture

– Recognize the ways culture can help or hurt
your department

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 Adaptive vs. Unadaptive
chapter3
Corporate Culture

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 Four Types of
chapter3
Corporate Culture

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 Shaping Corporate Culture
chapter3
for Innovative Response

How people are treated increases

a company’s value
Culture attracts, motivates and
retains talent
Corporate culture enables learning
and innovation

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 Combining Culture and
chapter3
Performance

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chapter3 Cultural Leadership

• Articulate a vision for the organizational culture

that employees can believe in

• The cultural leader heeds the day-to-day

activities that reinforce the cultural vision

• Managers communicate the cultural values

through words and actions

• Cultural leaders uphold their commitment to

values during difficult times
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