Apple Inc. Managing The External Environment & Organization Culture

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Write recent examples that you have read about lately that fits the context of chapter 3. (For inclass discussion

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Management Fourteenth Edition Chapter 3 Managing the External Environment and the Organization’s Culture Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Learning Objectives 3.1 Contrast the actions of managers according to the omnipotent and symbolic views 3.2 Describe the constraints and challenges facing managers in today’s external environment Develop your skill at scanning the environment so you can anticipate and interpret changes taking place 3.3 Discuss the characteristics and importance of organizational culture Know how to read and assess an organization’s culture 3.4 Describe current issues in organizational culture Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The Manager: Omnipotent or Symbolic? ➢Omnipotent view: managers are directly responsible for an organization’s success or failure ➢Symbolic view: much of an organization’s success or failure is due to external forces outside managers’ control Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Managerial Constraints In reality, managers are neither all-powerful nor helpless. But their decisions and actions are constrained ORIGINS of EXTERNAL vs INTERNAL CONSTRAINTS ❖External constraints organization’s environment ❖Internal constraints organization’s culture Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Constraints on Managerial Discretion Exhibit 3-1 shows that external constraints come from the organization’s environment and internal constraints come from the organization’s culture. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Components of External Environment Exhibit 3-2 shows the different components that make up the external environment. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The External Environment Factors and forces outside the organization that affect its performance: ➢Economic ➢Demographic (last week’s sub-topics) ➢Political/Legal ➢Sociocultural ➢Technological (e.g. rapid innovation) ➢Global Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The Economic Environment ➢Managers need to be aware of the economic context so they can make the best decisions for their organizations ➢Name a few challenges of companies in which you are familiar—then lets analyze them based on the external environment framework Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The Global Economy and Economic Context ➢The lingering global economic challenges began with the turmoil in the U.S. housing market ➢Tight Credit (business and personal) And ➢Sluggish global recovery (e.g. slow growth) Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Economic Inequality and the Economic Context ➢Polls show that in many countries, people believe that the gap between the rich and poor is problematic U.S. Research ➢Top 1% increased 200% over 40 years ➢Bottom 20% increased only 48% for same period Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The Demographic Environment Age is a particularly important demographic since the workplace often has different age groups all working together ➢ Baby Boomers (1946 – 1964) ➢ Gen X (Late mid-60’s and 70’s) ➢ Gen Y (Millennials – 80’s and 90’s) ➢ Post-Millennials (Gen Z: teens and middle schoolers) Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Gen Y Gen Y is an important demographic at Facebook, where most employees are under 40 Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved The Demographic Environment Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved How External Environment Affects Managers Jobs and Employment: the impact of external factors on jobs and employment is one of the most powerful constraints mangers face (economic, demographic, technological, globalization) Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Assessing Environmental Uncertainty Environmental uncertainty: the degree of change and complexity in an organization’s environment ➢ Change: stable to dynamic ➢ Complexity: simple to complex Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Environmental Uncertainty Matrix Exhibit 3-3 shows the two aspects of environmental uncertainty, change and complexity. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Porter’s Five Forces Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Managing Stakeholder Relationships Stakeholders: any constituencies in the organization’s environment that are affected by an organization’s decisions and actions Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Organizational Stakeholders Exhibit 3-4 identifies some of an organization’s most common stakeholders Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Benefits of Good Stakeholder Relationships ➢ Improved predictability of environmental changes ➢ Increased successful innovations ➢ Increased trust among stakeholders ➢ Greater organizational flexibility to reduce the impact of change Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Organizational Culture ➢ Just as each individual has a unique personality, an organization, too, has a personality ➢ Corporate DNA Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved What is Organizational Culture? Organizational culture is shared: ❑ VALUES ❑ PRINCIPLES ❑ TRADITIONS ❑ DISTINCT WAYS of DOING THINGS Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Contrasting Organizational Culture ➢At Tesla Motors, the focus is product innovation (innovation and risk taking) ➢In contrast, Southwest Airlines has made its employees a central part of its culture Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Contrasting Organizational Culture • Risk-taking and change discouraged • Creativity discouraged • Close managerial supervision • Work designed around individual employees • Risk-taking and change rewarded • Creativity and innovation rewarded • Management trusts employees • Work designed around teams Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved VIDEO Inside Google's Culture and Leadership Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Dimensions of Organizational Culture Exhibit 3-5 identifies the seven dimensions of organizational culture. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Strong Cultures Strong cultures: organizational cultures in which the key values are intensely held and widely shared Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Strong Versus Weak Cultures Strong Cultures Weak Cultures Values widely shared Values limited to a few people – usually top management Culture conveys consistent messages about what’s important Culture sends contradictory messages about what’s important Most employees can tell stories about company history or heroes Employees have little knowledge of company history or heroes Employees strongly identify with culture Employees have little identification with culture Strong connection between shared values and behaviors Little connection between shared values and behaviors Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Where Culture Comes From and How it Continues ➢The original source of the culture usually reflects the vision of the founders ➢Once the culture is in place, certain organizational practices help maintain it ➢The actions of top managers also have a major impact on the organization’s culture Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Establishing and Maintaining Culture Exhibit 3-8 illustrates how an organization’s culture is established and maintained. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved How Employees Learn Culture ➢ Stories ➢ Rituals ➢ Material Artifacts and Symbols ➢ Language Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved How Culture Affects Managers Because an organization’s culture constrains what they can and cannot do and how they manage, it’s particularly relevant to managers Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Types of Managerial Decisions Affected by Culture As shown in Exhibit 3-9, a manager’s decisions are influenced by the culture in which he or she operates. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Creating an Innovative Culture • Challenge and involvement • Freedom • Trust and openness • Idea time • Playfulness/humor • Conflict resolution • Debates • Risk taking Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Creating a Customer Responsive Culture Characteristics of Customer Responsive Culture Suggestions for Managers Type of employee Hire people with personalities and attitudes consistent with customer service: friendly, attentive, enthusiastic, patient, good listening skills Type of job environment Design jobs so employees have as much control as possible to satisfy customers, without rigid rules and procedures Empowerment Give service-contact employees the discretion to make dayto-day decisions on job-related activities Role clarity Reduce uncertainty about what service-contact employees can and cannot do by continual training on product knowledge, listening, and other behavioral skills Consistent desire to satisfy and delight customers Clarify organization’s commitment to do whatever it takes, even if it’s outside an employee’s normal job requirements Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Creating a Sustainability Culture For many companies, sustainability is developed into the organization’s overall culture Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved Group Exercise ❖It’s important to learn about a company’s culture before you accept a job at a new company ❖It is also imperative to find a work culture that aligns with your values and work style 1. Discuss the different types of org cultures 2. Discuss the org cultures of places you worked 3. How would you learn about a company’s culture during an interview? Create a list of questions that you would ask an employer to access the company’s culture Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved NEXT STEPS 1. Review Chapter 3 2. Prepare for Week 4 – Chapter 4: Managing in a Global Environment 3. Group Project – 1st Deliverable is DUE Sept 27th Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved
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Running head: MANAGING THE EXTERNAL ENVIRONMENT AND ORGANIZATION
CULTURE

Managing the external Environment and Organization Culture
Student Name
Institution Affiliation

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MANAGING THE EXTERNAL ENVIROMENT AND ORGANIZATION CULTURE

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Managing the External Environment and organization culture
External factors are those forces outside the organization that affects its performance.
Managers should be knowledgeable about the economic context for them to make informed
financial decisions. One of the factors is economic elements such as demand and supply. Demand
is how willing and able a consumer is to purchase what a business in question offers and supply
entails the ability of a business to take that which the consumer needs to them. For example, when
iPhone introduces a new phone with extra features in the market, it maintains high prices due to
the increase in demand and the prices remain high if the demand is more than the supply. Severe
weather affected sugar production in Brazil which is the largest producer of sugar in the world.
Due to this factor, there was a decrease in sugar supply globally, and thus the prices of sugar
escalated. A marginal and total utility which entails the amount of satisfaction a consumer gets
from consuming particular products. When one continues to consume from the same products the
experience starts to depreciate. Depreciation results in short term or long-term decrease in sales of
that product. Development of a new brand ensures that the revenues of a business don’t...


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