The organisation and corporate culture
Chapter 3
Suzaan Hughes
Planning Ahead — Learning Objectives
1. Define an organisational eco-system and understand how general and task
environments affect an oration’s ability to survive and thrive.
2. Explain the strategies that managers use to help organisations adapt to an
uncertain and/or turbulent future environment.
3. Define corporate culture, providing orgational examples.
4. Interpret organisational symbols, stories, heroes, villains, slogans and
ceremonies and their interrelationships within a corporate culture.
5. Describe four main types of corporate culture and how corporate culture relates
to the environment.
6. Define cultural leadership and explain the tools that a cultural leader can use to
create a high-performance corporate culture.
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The External Environment
The elements of the world constantly change
• The external organisational environment includes all outside
elements that affect the organisation
• General environment:
• Affects organisations indirectly
• Task environment:
• Sectors that conduct transactions with the organisation
• Organisational ecosystem:
• Formed by the interaction among a community of organisations in the
environment
• Internal environment:
• Elements within the organisation boundaries
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The General and Task Environments
Organisational Ecosystem includes organisations in all sectors of the task and
general environments that provide the resource and information transactions,
flows, and linkages necessary for an organisation to survive.
Direct “Indirect”
influence influence
Micro
Market
Macro 4
Sample elements in the general environments of organisations
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The External Environment
Economic conditions
• Overall health of economy in terms of financial markets,
inflation, income levels, and job outlook
• Economic health of the country/region
o Extended globally with uncertainty
• Consumer purchasing power
• Unemployment rate
• Interest rates
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The External Environment
Legal-political conditions
• Laws and regulations, government policies, and the
objectives of political parties
•Political activities
•Government agencies and regulation
• Managers must recognize the power of pressure
groups
•Work to influence companies to behave in a socially responsible way
• Vary from one country to the next
• Internet censorship - deliberate blockage of public
access to information posted on the Internet
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The External Environment
Sociocultural conditions
• Demographic characteristics, norms, customs and values
• Diversity issues relating to educational opportunity, housing
options
• Demographics (ie. Aging populations) and societal values
(technology woven into everyday life)
• Generational cohorts -- people born within a few years of
one another and who experience somewhat similar life
events during their formative years
• Growing diversity has implications for business
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The External Environment
Technological conditions
• Massive advancements in a specific industry and society
• Advances drive competition and help innovative companies
gain market share
• A continuing wave of workplace apps ranges from new
product development and advertising, to employee
networking and data sharing, to virtual meetings.
• Between fast-developing smart device technologies,
increasing use of robotics and artificial intelligence, and
ever-increasing bandwidth, technology continues to
penetrate further and further into everyday life.
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The External Environment
Environment
• Organisations must be sensitive to the environment
• Growing importance and pressure
• Natural dimension does not have own voice
• People and organisations are working harder to reduce
water consumption, cut back waste and increase
recycling, improve energy efficiency, buy more local
produce, and eliminate pollution.
• Environmental groups advocate action/policy
•Reduce pollution
•Develop renewable energy
•Global warming
•Sustainable use of scarce resource
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Environmental Uncertainty and Value Creation
The specific (task) environment - actual organisations, groups, and persons
with whom an organisation interacts and conducts business
• Includes important stakeholders such as:
o Customers
o Suppliers
o Competitors
o Regulators
o Advocacy groups
o Investors/owners
o Employees
o Society
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Task Environment
• Customers
• Competitors
• Suppliers
• Labour Market
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3.4 - Sample External Environment
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3.4 - Sample External Environment
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Organisation-Environment Relationship
• The environment creates uncertainty for managers
• Managers must respond and design adaptive organisations
• Uncertainty – managers do not have sufficient information
about environmental factors to understand and predict
environmental needs and changes
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3.5 - External Environment and Uncertainty
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Adapting to the Environment
• Boundary-spanning roles – link and coordinate the organisation
with external environment, seek:
✓ Business intelligence
✓ Competitive intelligence
• Inter-organisational partnerships – reduce boundaries and begin
collaborating with other organisations
• Mergers – occurs when two or more organisations combine to
become one
• Joint ventures – strategic alliance or program by two or more
organisations
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3.6 - The Shift to a
Partnership Paradigm
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The Internal Environment: Corporate Culture
Corporate culture is the set of key values, beliefs,
understandings and norms that members of an organisation
share:
❖Symbols
❖Stories
❖Heroes
❖Slogans
❖Ceremonies
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3.7 - Levels of Corporate Culture
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Iceberg model of corporate culture
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3.8 - Four Types of Corporate Culture
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Types of corporate culture
• Adaptability: Emerges where the environment requires a fast response and
high-risk decision-making.
• Important values – ability to rapidly detect, interpret and translate signals from the
environment into new behaviours.
• Achievement: Suited to organisations concerned with serving specific
customers, but without intense need for flexibility and rapid change.
• Important values – competitiveness, aggressiveness, personal initiative, cost cutting
and willingness to work long and hard to achieve results.
• Involvement: Emphasizes an internal focus on the involvement and
participation of employees to adapt rapidly to changing needs from the
environment.
• Important values – meeting the needs of employees, organisation can be
characterized as caring with a family like atmosphere.
• Consistency: Uses an internal focus and consistency orientation for a stable
environment.
• Important values – the culture rewards and supports methodical, rational, orderly ways
of doing things.
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Shaping Corporate Culture for Innovative Response
Innovation is the process of taking a new idea and putting it into practice.
Innovation is a major driver of competitive advantage, and is important for
both organisations and for individuals.
Corporate culture plays a key role in learning and innovative responses
• Most important mechanism for attracting, motivating and retaining
employees
• Employee first culture drives corporate financial performance
• Enables learning and innovative responses to threats from the
external environment
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Managing the High-Performance Culture
•Bottom-line strategies are successful in the short
term
•Successful companies balance culture and
performance
•Culture is the “glue” that holds the organisation
together
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High-Performance Culture
• Based on solid organisational mission/
purpose
• Shared adaptive values that guide
decisions and practices
• Encourages individual employee ownership
✓Bottom-line results
✓Organisation’s culture
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3.9 - Combining Culture
and Performance
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Cultural Leadership
Defines and uses signals and symbols to influence
corporate culture
•Articulate a vision for the organisational culture that
employees can believe in
•Heeds the day-to-day activities that reinforce the cultural
vision
Leaders communicate through words and actions
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