This slide is about one of the topic in Principle of Management subject.

1. Introduction to Management 11e
John Schermerhorn
Chapter 4Chapter 4
External EnvironmentExternal Environment
andand
Organizational CultureOrganizational Culture

2. 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?

3. 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:

4. Figure 4.1 Starbucks general environment

5. 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 business
Includes important stakeholders such as:

6. 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

7. Figure 4.2 Multiple stakeholders in the environment of an
organization

8.  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?

9. 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

10. Study Question 2: What are key issues in organization-environment
relationships?
 Customers want:
 High quality
 Low price
 On-time delivery
 Great service

11. Study Question 2: What are key issues in organization-environment
relationships?
 Key customer service lessons:
 Protect reputation for quality products
 Treat customers right

12. 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

13. Figure 4.3 Dimensions of uncertainty

14. Study Question 2: What are key issues in organization-environment
relationships?
Organizational Effectiveness
sustainable high performance in using
resources to accomplish mission and
objectives

15. 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

16. Study Question 3: What are the emerging challenges of
sustainability and the environment?
Three P’s of organizational performance

17. 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

18. 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

19. 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

20.  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?

21. Study Question 4: How do organizations accomplish innovation?
 Sustainable innovations – reduce carbon
footprints and environmental impacts of
organizations, their practices and
products

22. Study Question 4: How do organizations accomplish innovation?
 Social business innovations – find ways
to use business models to address
important social problems

23. Study Question 4: How do organizations accomplish innovation?
 The innovation process
Reverse innovation – innovation can come from
any level in the organization or location

24.  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?

25. Study Question 4: How do organizations accomplish innovation?
Internal
organization
al
sensitivity
External
environment
and market
sensitivityExample of
commercializing
innovation
process

26. Study Question 4: How do organizations accomplish innovation?
 Characteristics of innovative
organizations
 Strategy and culture
 Structures
 Systems
 Staffing and management

27. Chapter 4 Case
 Panera Bread Company: Staying on Top
of Long-Term Trends
27