CHAPTER TWO

ENVIRONMENT AND CORPORATE CULTURE

Organizational culture
Comprises the shared set of beliefs, expectations,
values, norms, and work routines that influence
how members of an organization relate to one
another and work together to achieve
organizational goals.
In essence, organizational culture reflects the
distinctive ways in which organizational members
perform their jobs and relate to others inside and
outside the organization.
When organizational members share an intense
commitment to cultural values, beliefs, and
routines and use them to achieve their goals, a
strong organizational culture exists.
Organizational culture

When organizational members are not strongly

committed to a shared system of values, beliefs,
and routines, organizational culture is weak.

 Organizations that possess strong cultures may

differ on a wide variety of dimensions that
determine how their members behave toward
one another and perform their jobs.
 Managers and Organizational Culture
How managers create culture is most vividly evident
in start-ups of new companies.

 Entrepreneurs who start their own companies are

typically also the start-ups’ top managers until the
companies grow and become profitable.
The founders’ personal characteristics play an
important role in the creation of organizational
culture.
 ORGANIZATIONAL CULTURE

 Organizational culture comprises the shared set of

beliefs, expectations, values, norms, and work
routines that influence how members of an
organization relate to one another and work
together to achieve organizational goals.
Value, Emotions, Attitude

 other personal characteristics of managers

shape organizational culture; these include
managers’ values, attitudes, moods and
emotions, and emotional intelligence.
ORGANIZATIONAL COMMITMENT

 Is the collection of feelings and beliefs that

managers have about their organization as a
whole.

 Managers who are committed to their

organizations believe in what their organizations
are doing, are proud of what these organizations
stand for, and feel a high degree of loyalty
toward their organizations.

 Committed managers are more likely to go

above and beyond the call of duty to help their
company and are less likely to quit
 Codes of ethics are formal standards and rules, based on
beliefs about right or wrong, that managers can use to help
themselves make appropriate decisions with regard to the
interests of their stakeholders.

 Ethical standards embody views about abstractions such as

justice, freedom, equity, and equality. An organization’s
code of ethics derives from three principal sources in the
organizational environment:

1- Societal ethics,
2-Professional ethics,
3-Individual ethics

Sources of an Organization’s Code of Ethics

SOCIETAL ETHICS are standards that govern how
members of a society deal with each other in
matters involving issues such as fairness, justice,
poverty, and the rights of the individual

PROFESSIONAL ETHICS are standards that govern

how members of a profession, managers or
workers, make decisions when the way in which
they should behave is not clear-cut.
INDIVIDUAL ETHICS Individual ethics are personal
values and attitudes that govern how individuals
interact with other people.
Diversity
raises important ethical issues and social
responsibility issues. It is also a critical issue for
organizations, one that if not handled well can bring
an organization to its knees, especially in our
increasingly global environment.

There are several reasons why diversity is such a

pressing concern and an issue both in the popular
press and for managers and organizations:
THE GENERAL ENVIRONMENT

the major forces in the general environment and

examine their impact on an organization’s task
environment are:

o Economic forces
o Sociocultural forces
o Political & Legal forces
o Technological forces
o Demographic forces
Economic forces
 affect the general health and well-being of a
country or world region. They include interest
rates, inflation, unemployment, and economic
growth.
 Economic forces produce many opportunities
and threats for managers.
 Low levels of unemployment and falling interest
rates give people more money to spend, and as a
result organizations can sell more goods and
services.
 Good economic times affect the supply of
resources that become easier or more
inexpensive to acquire, and organizations have
an opportunity to flourish.
Technology is the combination of tools, machines,
computers, skills, information, and knowledge that
managers use to design, produce, and distribute
goods and services; technological forces are
outcomes of changes in that technology.
Sociocultural forces are pressures emanating from
the social structure of a country or society or from
the national culture, such as the concern for
diversity, discussed in the previous chapter.
Pressures from both sources can either constrain or
facilitate the way organizations operate and
managers behave
Political and legal forces are outcomes of changes in
laws and regulations. They result from political and
legal developments that take place within a nation,
within a world region, or across the world, and
significantly affect managers and organizations
everywhere.
Demographic forces are outcomes of changes in, or
changing attitudes toward, the characteristics of a
population, such as age, gender, ethnic origin, race,
sexual orientation, and social class. Like the other
forces, demographic forces present managers with
opportunities and threats and can have major
implications for organizations
W HAT IS THE GLOBAL ENVIRONMENT?
The global environment is the set of forces and conditions
that operate beyond an organization’s boundaries but affect a
manager’s ability to acquire and use resources.
The global environment has two components:

1-THE TASK ENVIRONMENT The task environment is the set

of forces and conditions that originate with global suppliers,
distributors, customers, and competitors
and influence managers daily. The opportunities and threats
associated with forces in the task environment become more
complex as a company expands
globally.
2- THE GENERAL ENVIRONMENT The general environment
comprises wide-ranging global economic, technological,
sociocultural, demographic, political, and legal forces that
affect an organization and its task environment.

Globalization is the set of specific and general

forces that work together to integrate and connect
economic, political, and social systems across
countries, cultures, or geographic regions so that
nations become increasingly interdependent and
similar.
THANK YOU