      The elements of the world constantly change All outside elements that affect the organization General environment: Affects organizations indirectly Task environment: Sectors that conduct transactions with the organization Organizational ecosystem: Formed by the interaction among a community of organizations in the environment Internal environment: Elements within the organization boundaries 2 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3  Globalization influences all other aspects of the external environment New competitors, customers, suppliers Changes in social, technological, and economic trends  All organizations must compete and think globally  Economic power has shifted to China and India  The global environment is complex and everchanging 4 Massive scientific & technological advancements in a specific industry and society  Massive changes for org. & industries  Drive competition and help innovative companies gain market share   Examples: Internet access, smart phone, laptop, videoconference, etc. 5 Demographic characteristics, norms, customs, and values  Connected Generation or Generation C has woven technology into every aspect of life  U.S. population is aging  Growing diversity has implications for business 6  Economic health of the country/region Extended globally with uncertainty  Consumer purchasing power  Unemployment rate  inflation  Interest rates – Discount rate, federal funds rate, prime rate 7  Government regulations; state, local, and federal government agencies  Political activities  Managers must recognize the power of pressure groups (interest groups) Work to influence companies to behave in a socially responsible way 8  Organizations must be sensitive to the environment  Growing importance and pressure  Natural dimension does not have own voice  Environmental groups advocate action/policy Reduce pollution Develop renewable energy Global warming Sustainable use of scarce resources 9 10  Customers  Competitors  Suppliers  Labor Market 11 12  The environment creates uncertainty for managers  Managers must respond and design adaptive organizations  Uncertainty – managers do not have sufficient information about environmental factors to understand and predict environmental needs and changes 13 14  Boundary-spanning roles – link and coordinate the organization with external environment, seek:  Business intelligence  Competitive intelligence  Interorganizational partnerships – reduce boundaries and begin collaborating with other organizations  M& A (Mergers & Acquisitions) – occurs when two or more organizations combine to become one  Joint ventures – strategic alliance or program by two or more organizations 15 16 Corporate culture is the set of key values, beliefs, understandings, and norms that members of an organization share Symbols Stories Heroes Slogans Ceremonies 17  Comparative Study b/w Korean Corporate Culture & American Corporate Culture in the Automobile Industry Impacts of cultural differences on supply chain management (SCM).  SCM is considered a key to success of Hyundai. Is it really true? We want to investigate the real stories. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18 19 20 Adaptability C.  autonomy  Adaptability vs. Achievement = flexibility vs. stability  Involvement  Consistency  © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21  Corporate culture  attracting, motivating, and keeping good employees  People (employees) & how they are treated  Increasing the firm value the most  Corporate culture plays a key role in learning and innovate responses to threats from the external environment, challenging new opportunities, or organizational crises 22  Bottom-line strategies are successful in the short term  Successful companies balance culture and performance  Culture is the “glue” that holds the organization together  Based on solid organizational mission/purpose Shared adaptive values that guide decisions and practices Encourages individual employee ownership of:    Bottom-line results  Organization’s culture 23 24  Defines and uses signals and symbols to influence corporate culture  Articulate a vision for the organizational culture that employees can believe in  Heeds the day-to-day activities that reinforce the cultural vision  Leaders communicate through words and actions 25