Introduction to Management 11e John Schermerhorn

Chapter 4Chapter 4

External Environment External Environment and and

Organizational CultureOrganizational Culture

Planning Ahead — Chapter 4 Study Questions

1. What is the external environment of organizations?

2. What are key issues in organization-environment relationships?

3. What are the emerging challenges of sustainability and the environment?

4. How do organizations accomplish innovation?

Study Question 1: What is the external environment of organizations?

The general or macroenvironment — all of the background conditions in the external environment of the organization including:

Figure 4.1 Starbucks general environment

Study Question 1: What is the external environment of organizations?

The specific (task) environment - actual organizations, groups, and persons with whom an organization interacts and conducts businessIncludes important stakeholders such as:

Study Question 2: What are key issues in organization-environment relationships?

Customer relationship management establishes and maintains high standards of

customer service in order to strategically build lasting relationships with and add value to customers

Supply chain management strategic management of all

operations relating to an organization’s resource suppliers

Figure 4.2 Multiple stakeholders in the environment of an organization

Competitive advantage a core competency that clearly sets an

organization apart from competitors and gives it an advantage over them in the marketplace

Study Question 2: What are key issues in organization-environment relationships?

Study Question 2: What are key issues in organization-environment relationships?

Companies may achieve competitive advantage in many ways, including:

Products Pricing Customer service Cost efficiency Quality Knowledge

Study Question 2: What are key issues in organization-environment relationships?

Customers want: High quality Low price On-time delivery Great service

Study Question 2: What are key issues in organization-environment relationships?

Key customer service lessons: Protect reputation for quality products Treat customers right

Study Question 2: What are key issues in organization-environment relationships?

Environmental uncertainty a lack of complete information regarding

what exists and what developments may occur in the external environment

Two dimensions of environmental uncertainty: Degree of complexity Rate of change

Figure 4.3 Dimensions of uncertainty

Study Question 2: What are key issues in organization-environment relationships?

Organizational Effectiveness sustainable high performance in using resources to accomplish mission and objectives

Study Question 3: What are the emerging challenges of sustainability and the environment?

Sustainable development makes use of environmental resources to

support societal needs today while also preserving and protecting them for future generations

Study Question 3: What are the emerging challenges of sustainability and the environment?

Three P’s of organizational performance

Study Question 3: What are the emerging challenges of sustainability and the environment?

Environmental capital – natural resources used to sustain life and produce goods and services for society Land Water Minerals

Study Question 3: What are the emerging challenges of sustainability and the environment?

Green management – managing people and organizations in ways that preserve the natural environment Reducing energy consumption Minimizing environmental impact

Study Question 3: What are the emerging challenges of sustainability and the environment?

Human sustainability – concern for the effect of management practices on employee physical and psychological well-being Health and wellness programs Stress management Minimizing work-family conflict Control over work Fair wages and opportunities

Innovation - process of putting new ideas into practice

Business innovations Product innovation Process innovation Business model innovation

Study Question 4: How do organizations accomplish innovation?

Study Question 4: How do organizations accomplish innovation?

Sustainable innovations – reduce carbon footprints and environmental impacts of organizations, their practices and products

Study Question 4: How do organizations accomplish innovation?

Social business innovations – find ways to use business models to address important social problems

Study Question 4: How do organizations accomplish innovation?

The innovation process

Reverse innovation – innovation can come from any level in the organization or location

Commercializing Innovation - turning new ideas into products services or processes to increase profits through

Greater sales Reduced costs

3M’s process to develop Post-It Notes is a good example

Study Question 4: How do organizations accomplish innovation?

Study Question 4: How do organizations accomplish innovation?

Internal

organizational

sensitivity

External environment and market sensitivityExample of

commercializinginnovation process

Study Question 4: How do organizations accomplish innovation?

Characteristics of innovative organizations Strategy and culture Structures Systems Staffing and management

Chapter 4 Case

Panera Bread Company: Staying on Top of Long-Term Trends

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