The Environment and

Corporate Culture
THE ENVIRONMENT
 General Environment
The layer of the external environment that
affects the organization indirectly, it may further
include several dimensions:

1) International Dimension The portion of the

external environment that represents events
originating in foreign countries as well as
opportunities for home companies in other
countries.
2) Technological Dimension includes scientific
and technological advancements in a specific
industry and in society at large

3) Sociocultural Dimension of the general

environment represents the demographic
characteristics as well as the norms, customs,
and values of the general population.
4) Economic Dimension represents the general
economic health of the country or region in
which the organization operates. Consumer
purchasing power, the unemployment rate, and
interest rates are part of an organization’s
economic environment.
5) Legal-Political Dimension includes
government regulations at the local, state, and
federal levels, as well as political activities
designed to influence company behavior
 Task Environment
The task environment includes those sectors
that have a direct working relationship with the
organization, among them customers,
competitors, suppliers, and the labor market.
It consists of :
1) Customers. Those people and organizations in
the environment who acquire goods or services
from the organization are customers.
2) Competitors. Other organizations in the same
industry or type of business that provide goods
or services to the same set of customers are
referred to as competitors.
3) Suppliers. The raw materials the organization
uses to produce its output are provided by
suppliers
4) Labor Market. Represents people in the
environment who can be hired to work for the
organization
The Internal Environment: Corporate
Culture
• The internal environment within which
managers work includes corporate culture,
production technology, organization structure,
and physical facilities.
• Of these, corporate culture has surfaced as
important to competitive advantage
 Culture
The set of key values, beliefs, understandings,
and norms that members of an organization
share.
Hofstede’s Cultural Typology
Study Notes for detailed perspective

https://www.hofstede-insights.com/product/compare-countries/
 Fundamental Values of an
Organization’s Culture
1) Symbol: An object, act, or event that conveys
meaning to others
2) Story: A narrative based on true events that is
repeated frequently and shared among organizational
employees
3) Hero: A figure who exemplifies the deeds, character,
and attributes of a strong culture.
4) Slogan: Is a phrase or sentence that concisely
expresses a key corporate value.
5) Ceremony: Is a planned activity that makes up a
special event and is conducted for the benefit of an
audience
Types of Cultures
1) Adaptability Culture: A culture characterized by
values that support the company’s ability to
interpret and translate signals from the
environment into new behavior responses.
2) Achievement Culture: A results-oriented culture
that values competitiveness, personal initiative,
and achievement.
3) Involvement Culture: A culture that places high
value on meeting the needs of employees and
values cooperation and equality.
4) Consistency Culture A culture that values and
rewards a methodical, rational, orderly way of
doing things
 Adaptive Organizational
Culture
Visible Behavior Leaders pay close attention to all
their constituencies, especially
customers, and initiate change
when needed to serve their
legitimate interests, even if it
entails taking some risks
Expressed Values Leaders care deeply about
customers, stockholders, and
employees. They also strongly
value people and processes that
can create useful change (e.g.,
leadership initiatives up and down
the management hierarchy)
Underlying Assumption Serve whole organization, trust
others
Consistency
Organizational Culture
Managers tend to behave
somewhat insularly, politically,
and bureaucratically. As a result,
they do not change their
strategies quickly to adjust to or
take advantage of changes in
their business environments
Managers care mainly about
themselves, their immediate work
group, or some product (or
technology) associated with that
work group. They value the
orderly and risk-reducing
management processes much
more highly than leadership
initiatives
Meet own needs, distrust others
 Cultural Leadership
Managers must over communicate to ensure that
employees understand the new culture values, and
they signal these values in actions as well as words.

A cultural leader defines and uses signals and

symbols to influence corporate culture.
Cultural leaders influence culture in two key areas:
1) The cultural leader articulates a vision for the
organizational culture that employees
can believe in.
2) The cultural leader heeds the daily activities that
reinforce the cultural vision.
Model Derived From Leavitt’s
Diamond Model
 Tasks
A strategy leads to a need for certain things to
be done by people. A change in strategy may
change those tasks. For example, a strategy to
be more customer responsive may require some
tasks to be undertaken differently, and new ones
to be added.
 People
• This means the nature, knowledge and skills of
the various individuals already in the
organization, or who need to be recruited to
the organization to implement the strategy.
The people required are influenced by the
tasks, but also can influence the way the
organization looks at those tasks in the first
place.
 Rewards Systems
How people are rewarded will affect whether
they perform the tasks in the way the strategy
required. Frequently reward structures are out
of step with the strategy.
 Control Systems
• How people are controlled will also affect what they
actually do. Control mechanisms that emphasize
individual effort, particularly if linked to reward, will
affect behavior far more than a management
exhortation for teamwork.
• If teamwork is the important thing, then controls
need to be designed accordingly. The nature of a
control system can also influence, and is related to,
the culture of the organization.
 Information Systems
• Organizations are also affected by the way information
is collected and disseminated. Empowerment of lower
levels of management can only take place if they also
receive the information needed to do the job.
Information should also be related to the structure of
the organization.
• In many organizations it lags behind structural changes,
making it harder for managers to manage. Strategy can
become impossible to implement because of the
failure of information systems to meet the needs of
organizations.
 Decision Making Systems
Where and how decisions are made, and who is
allowed to make them will affect all parts of the
model.
 Culture
The culture of an organisation is increasingly
seen as one of the most important components
to manage. Culture depends on all the other
boxes in the model, and is also influenced by the
nature of the company’s business, its history,
and where it operates.
 Structure
Finally there is the way the tasks are grouped
into jobs, and jobs are grouped into
organizational units. Structure like the other
components of the model has a two directional
link with every other component, and can help a
strategy to be implemented, or can make it
totally impossible