External environment & culture

The nature of an environment

> External environment: Outside the boundaries of the organization

> Internal environment: Within organization

> General environment: The broader conditions that an organization exists within

> Specific or task environment: The people and groups an organization interacts with on a day to day basis.

General environment

• Economic conditions: The broader heath of the economy
• Sociocultural: The customs, social values, educational trends and demographics of society
• Legal-political: The state of government policies and philosophy
• Technological: The development and availability of current technology
• Natural environment: The state of the environment including public concern for it
• International: International events and conditions

Specific environment

• Customers
• Suppliers
• Competitors
• Regulators

Example: Ford motor company

Managing the external environment

Adapting

• Boundary spanning
• Forecasting and scenario planning
• Flexible structure
• Mergers and joint ventures

Influcening

• Advertising and PR
• Political lobbying
• Competitive strategy

internernal environment

• Observable culture: The physical culture demonstrated in the company
• Core culture: The “deep down” values and culture that underpins the observable culture

Managing culture

• Leaders should establish and maintain core values
• Symbolic leaders should be used to reinforce desired culture
• Leaders can influence culture by

o Paying attention and noticing

o The way they react to problems

o Role modeling