Week 3

Pre – read text: Chapter 3.

Topic: The Environment

Week 3. Chapter 3 The Environment

Discussion Questions

3 What do you think are the most important forces in the external environment creating
uncertainty for organisations today? Do the forces you identified typically arise in the
task environment or the general environment?

4 Contemporary best-selling management books often argue that customers are the most
important element in the external environment. Do you agree? In what company
situations might this statement be untrue?

6 Define corporate culture and explain its importance for managers.

10 Do you think a corporate culture with strong values is better for organisational effectiveness
than a culture with weak values? Are there times when a strong culture might reduce
effectiveness? Discuss.
Summary Notes.
Chapter 3 The Environment and Corporate Culture
A Manager cannot control the environment but its influence must be understood and managed.

A. What is the environment? Made up of two parts:

a. External environment
i. General or Mega environment
1. International
2. Technological
3. Sociocultural
4. Economic
5. Legal/Political
ii. Task Environment
1. Customers
2. Competitors
3. Suppliers
4. Labour Market
iii. Pressures of external environment on organisations & how managers manage these.
1. The number of factors in the environment combined with the rate of change on those factors
creates uncertainty.
2. To manage this uncertainty managers seek to:
a. Adapt by using:
i. Boundary Spanning
ii. Forecasting & Planning
iii. Flexible structure
iv. Mergers & Joint ventures
v. Buffering & Smoothing
vi. Domain Shift
b. Influence the environment through:
i. Advertising & public relations
ii. Political activity
iii. Trade associations
b. Internal environment – Organisational Culture
i. What is meant by Corporate Culture and what role does it play?
ii. Levels of Culture
1. Visible
2. Invisible(hidden) elements expressed through
a. Symbols
b. Stories
c. Heroes
d. Slogans
e. Ceremonies
iii. Internal cultures can either adapt to support organisational success or be remain unchanged.
1. Unadaptive cultures are characterised by stability, bureaucracy and value the orderly & risk
reducing management.
2. Adaptive cultures are characterised by concern for constituents, initiate change and value people
& processes that can create useful change and care deeply about customers, stakeholders and
employees.
iv. Types of Cultures
1. Adaptability culture
2. Involvement Culture
 3. Consistency Culture
4. Achievement Culture
v. Culture gap – difference between actual culture and desired culture
vi. Changing the culture gap is a long term process
1. One way to change the culture gap is through symbolic leadership. This can be done by:
a. Creating an organisational climate which facilitates learning & innovative responses to
threats, challenges or crises.
b. Maintaining a balance between attention to business performance and attention to values
c. Overcommunicating to ensure employees understand new culture values
d. Articulating a vision employees can believe in
e. Support & reinforce cultural vision through behaviour/actions
Sample Test/Exam Questions

Sample Mid Semester Test Question

1. Managers cannot control the environment but they need to manager it. Why is it important
for a manager to understand the environment and what approaches are available to manage
the effects of the environment? (Hint: Be sure to include in your answer a description of the
make-up of the external and internal environment. )

Sample Exam Questions

Sample Short Answer Questions:

 Explain the nature of organisational culture. What variables would affect

changing that culture?

 Outline the major elements forming the mega-environment. Choose one of these
elements and briefly explain how it may impact an organisation. Use an example
to illustrate your answer.

 Outline major methods to help organizations adapt to their environmental

elements.

Essay
Managers can’t control the environment but they must manage its effects. Discuss
showing you are aware of the make – up of the environment and what managers can do to
effectively manage the effects of the environment.
Case Study: Assessing the Ski – Shop Environment

Your best friend’s sister and brother-in-law run a ski shop near your campus, but they
have recently bought another type of business elsewhere in town. They want you and
your friend to manage the ski shop. If you run it successfully, you would and your friend
will gradually be given substantial equity in the shop and eventually would own the
whole business.

So far, the shop has been only marginally profitable. Although the shop carries ski
equipment and clothing, it often runs out during the peak ski season. Extra merchandise
ordered to meet demand often arrives so late it cannot be sold until next season, if at all.
In addition, the shop does very little business from October to April.

Due to a dispute over the size and prominence of an outside sign displaying the shop’s
name, the relationship with the local government is poor. Tact and diplomacy are not
major strengths of your friend’s brother-in-law. As a result, the shop gets more than its
share of inspections, and a recent effort to gain permission to expand the parking lot was
turned down.

So far, other than minimal advertising, nothing has been done to make inroads on
campus. Yet the campus should be lucrative. The student population includes many avid
skiers, since good skiing is about an hour and a half drive away. Unfortunately, many buy
their ski equipment and clothing at the lodges. In part this is because lodges tend to have
good arrangements for ski equipment repair and maintenance.

Your initial assessment is that, so far, the ski shop has not tried to deal with its
environment. There have been persistent rumours another ski shop may open nearby next
year, creating a competitor. You and your friend (and possibly some others willing to
give you advice) plan to get together soon to try to develop approaches to help manage
the ski shop’s environment better. This analysis is crucial to your decision about whether
to manage the shop. Also, your friend’s sister and brother-in-law want to hear your ideas.
(From Bartol, K., Martin, D., Tein, M. & Matthews, G. (2004). Management. A pacific
rim focus. Australia: McGraw-Hill. P.89)

A. What is going on in this situation?

a. Who are the major players?
b. What are the major issues, realities and concerns?

B. What management theory is relevant to this situation?

C. Answer the questions below better understand and manage the situation
a. Outline the major elements in the ski shop’s task environment.

b. Prepare a proposal showing how you would better manage the ski shop’s environmental
elements.
Preparation for Week 4
1. Revise the content of lecture 3 so that you understand and can remember the main
ideas ready for the next class workshop session. Choose whichever way is best for
you to revise, process and understand the main content of the lecture. If you haven’t
completed a set of summary notes or answers to tutorial questions prepare one of
these ready for next class.

2. Prepare your final copy of the tute exercise ready for submission at class in week 4.
Make sure you check the guidelines to see you have fulfilled all the requirements
including in and end text referencing.

3. Write up the case study from Session 2 on the Ice- Cream Factory using the Model
for approaching a Case Study as the structure. This should be no more than one
page in length.

4. Begin preparing answers to past mid semester test questions for weeks 2 – 3. Use
you lecture notes and text book as a basis for answering the questions

5. Check – have the following things have been completed.

a. Handed completed goals sheet in
b. Obtained a text book or have a workable arrangement to access one book
between 2 people.
c. Can you still remember the four principles for success outlined in week 1?

6. Write in the box the number of hours you invested this week in processing the
management content and preparing for week 4.

7. Check now how many hours you have averaged outside of class in the first four
weeks processing management content and preparing for the next class. Tick below
the box which best describes your achievement so far.

1. I have averaged more than 5 hours per week out of class work in the
first four weeks
(Well done. This should result in good performance)
2. I have averaged 3-5 hours per week

3. I have averaged 1- 3 hours per week

4. I have averaged less than 1 hour per week

(Oops! Data from past semesters indicates this will in most cases result
in poor performance unless suitable action is taken to remedy the
situation.)
My Personal Reflections. Week 3
What things in your unseen curriculum do you think could be affecting your study
performance? Include things which may be helping you to do better and those things which
may not be helping. What suggestions could you identify to help better manage those things
which may be hindering your performance?
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