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
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
FACTORS OF EXTERNAL
ENVIRONMENTS

1. CHANGE

2. COMPLEXITY

3. RESOURCE SCARCITY
TYPES OF EXTERNAL ENVIRONMENT
Firms are confronted with two broad types of
external environment.

General

Specific
GENERAL ENVIRONMENT
Components of the General environment are

1. The National Economy

2. The Tech part

3. The Socio-cultural element

4. The Politico-Legal
SPECIFIC COMPONENT
1. Customer base

2. Competitors

3. Suppliers
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
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
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
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.