Corporate Culture

lecture 1

Business Environment

The Challenges

Environmental Challenges
Rapid change, Workforce diversity, Globalization, Legislation, Evolving
Work and family Roles, Skill Shortages and the rise of the service sector

Organizational Challenges
Competitive position, Decentralization, Downsizing, Organizational
restructuring, Self-managed work team, The growth of small
businesses, Organizational culture, Technology, Outsourcing

Individual challenges
Matching people and organizations, Ethics and social responsibility,
Productivity, Empowerment, Brain drain and Job insecurity
2

Some Management Issues

Globalization
Workforce diversity
Information technology
Continually learning & adaptive organizations:
Learning organization: an organization that has developed the
capacity to continually adapt and change
Reengineering: radical change
TQM: Continuous improvement

Dismantling the hierarchy: downsizing, contingent workers,

empowerment
Ethics and trust:
Psychological contract: unwritten commitments and perceived
obligations between workers and employment

The general environment

The general environment can affect the
management of organizations.
The extent of influence of the general
environment is less direct than that of the
specific environment but also difficult to
predict.
Some general environmental factors, such
as a severe economic recession, can lead
to far-reaching effects on the organization
4

The
General
Environment
of the
Business
Organisation

Political/Legal
Economic
Socio-cultural
Technological

Economic conditions
Interest rates, inflation, changes in
disposable income, stock market prices,
and general business cycles all contribute
to the general economic conditions.
Recessions in one large industry can
spread out to others as workers are laid
off and consumers have less income to
spend purchasing the products of other
organizations
6

Political conditions
Political conditions include both the
general stability of the countries in which
the organization has operations and the
attitudes that governments in those
countries hold toward the role of business
in their society

Social conditions

Many countries often have different social and cultural rules of

conduct.

Management must adapt its practices to the changing expectations

of the society in which it operates. Areas of managerial decisions
affected by changing social conditions includes not only the makeup
of the products and services offered by the organization but its
internal policies as well.

Cultural forces, primarily working through value system, shape the

viewpoints and decision making process

For example the changing demographics of the workforce are

requiring organizations to recognize the needs of women and
minority employees by adopting innovative management practices
to motivate and retain these important employee groups.

Technological conditions
Innovations in technology are the most
rapidly changing factor in the general
environment.
Technology dependent organizations can
become obsolete almost overnight as
innovations replace whole industries.
Technological changes affect three areas
of an organization: strategy, manufacturing,
and distribution
9

Suppliers

The
Specific
Environment
of the
Business
Organization

Customers

Competitors

Pressure Groups

10

The Internal Environment Firms compete using internal

resources such as:
Culture
Expertise

11

Where do you use culture in

decision making?

Strategy
Product characteristics
HR practices and organizational structure
Marketing

12