ENVIRONMENT

1
ENVIRONMENT

• EXTERNAL AND INTERNAL

2
TYPES OF ENVIRONMENTS

• External -- all the forces and factors outside
  the firm that can influence or impact it
• Internal -- corporate culture--includes factors
  within the organization

3
HOW ENVIRONMENTS CHANGE

• Environmental change -- refers to the rate of
  change in a companys general and specific
  environments change
• Stable environments -- change is slow
• Dynamic environments -- change is fast
• Punctuated equilibrium -- suggests companies go
  through long periods of stability, followed by
  short bursts of dynamic, sometimes fundamental
  change

4
FACTORS OF EXTERNAL ENVIRONMENTS

• 1. CHANGE
• 2. COMPLEXITY
• 3. RESOURCE SCARCITY

5
TYPES OF EXTERNAL ENVIRONMENT

• Firms are confronted with two broad types of
  external environment.
• General
• Specific

6
GENERAL ENVIRONMENT

• Components of the General environment are
• 1. The National Economy
• 2. The Tech part
• 3. The Sociocultural element
• 4. The Politico-Legal

7
SPECIFIC COMPONENT

• 1. Customer base
• 2. Competitors
• 3. Suppliers

8
EYE ON THE ENVIRONMENT

• Any firm must keep a constant eye on
  environmental change -- even try to anticipate it
• Environmental scanning -- the process of
  continually searching the environment for factors
  and events that may impact the firm

9
THE INTERNAL ENVIRONMENT

• The internal environment of the firm is
  essentially its corporate or organizational
  culture
• It is the set of values, principles, traditions
  that drive the company and defines its unique
  character
• Culture emanates often from principles of the
  founder

10
SOURCES OF CORPORATE CULTURE

• The sources of corporate culture come from the
  principle and values of the founder
• From organizational stories that exemplify and
  reinforce the culture
• From organizational heroes -- who contributed
  greatly to the firm
• The corporate vision sums up the firms purpose
  for existence

11
CHANGING CORPORATE CULTURE

• Sometimes it is necessary to change corporate
  culture to meet new contingencies
• 1. Adaptability is key
• 2. Behavior additions or changes
• 3. Behavioral substitution
• 4. Change in visual artifacts -- design, dress
  code, etc.