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CHAPTER FIFTEEN
External and Internal Organization Environments and
Corporate Culture
CHAPTER SUMMARY
This chapter explains the external and internal environments which a manager must
monitor and also discusses organizational structures, and culture.
Students are reminded that organizations must react and adapt to many forces in their
internal and external environments. The context of the firms including size and
geographic location impact how environmental forces affect an organization differently.
An understanding of the forces and they currently affecting organizations and pressuring
structural change is crucial.
Students are also introduced to the concepts of mechanistic and organic structures.
Mechanistic organizational structures are best suited for environments that range from
stable and simple to low-moderate uncertainty. Organic organizational structures work
best in unstable, complex, changing environments. Their structures are flatter, with
participatory communication and decision-making flowing in different directions. There
is more fluidity and less-rigid ways of performing tasks; there may also be fewer rules.
The six types of organizational structure include functional, divisional, matrix,
geographic, networked team, and virtual. Each has its advantages and disadvantages.
Organizations are considered as either Open or Closed systems. depending on the
organization’s sensitivity to the environment. Closed systems are less sensitive to
environmental resources and possibilities, and open systems are more responsive and
adaptive to environmental changes. Open systems that take in resources and raw
materials at the “input” phase from the environment in a number of forms, depending
on the nature of the organization, industry, and its business.
Organizational culture is considered one of the most important internal dimensions of
an organization’s effectiveness criteria. The Competing Values Framework (CVF) is one
of the most cited and tested models for diagnosing an organization’s cultural
effectiveness and examining its fit with its environment.
Finally remind students that the future holds new predictions.
1. Persistent inequality and unfairness
2. Domestic and international political tensions
3. Environmental dangers
4. Cyber vulnerabilities.
, Organizational Behavior
LEARNING OUTCOMES
4.1 The Organization's External Environment
1. Define the external environment of organizations
Organizations must react and adapt to many forces in their internal and external
environments. The context of the firms such as size and geographic location
impact how environmental forces affect each organization differently. An
understanding of the forces and they currently affecting organizations and
pressuring structural change is crucial.
4.2 External Environments and Industries
2. Identify contemporary external forces pressuring organizations
An understanding of the various industries and organizations ‘fit’ with different
types of environment in crucial. There are small and large organizations that face
environments that are either stable of unstable and managing the organization
by recognizing their environment is a crucial skill.
4.3 Organizational Designs and Structures
3. Identify different types of organizational structures, and their strengths and
weaknesses
An understanding of Mechanistic vs Organic Structures and Systems and how
they differ and how these major concepts help classify different organizational
structures is crucial to recognizing organizational structures. Finally, the issue of
organizational complexity and its impact on organizational structure needs to be
understood.
You should be able to discuss the evolution of different types of Organizational
Structures. You should understand and identify the six types of organizational
structures, and the advantages and disadvantages of each: Functional, Divisional,
Matrix, Geographic, Networked Team, and Virtual.
4.4 The Internal Organization and External Environments
4. Explain how organizations organize to meet external market threats and
opportunities.
You should understand and identify the six types of organizational structures,
and the advantages and disadvantages of each structure:
Functional
Divisional
Matrix
May 12, 2019 2
must be attributed to OpenStax, Rice University and any changes must be noted.
CHAPTER FIFTEEN
External and Internal Organization Environments and
Corporate Culture
CHAPTER SUMMARY
This chapter explains the external and internal environments which a manager must
monitor and also discusses organizational structures, and culture.
Students are reminded that organizations must react and adapt to many forces in their
internal and external environments. The context of the firms including size and
geographic location impact how environmental forces affect an organization differently.
An understanding of the forces and they currently affecting organizations and pressuring
structural change is crucial.
Students are also introduced to the concepts of mechanistic and organic structures.
Mechanistic organizational structures are best suited for environments that range from
stable and simple to low-moderate uncertainty. Organic organizational structures work
best in unstable, complex, changing environments. Their structures are flatter, with
participatory communication and decision-making flowing in different directions. There
is more fluidity and less-rigid ways of performing tasks; there may also be fewer rules.
The six types of organizational structure include functional, divisional, matrix,
geographic, networked team, and virtual. Each has its advantages and disadvantages.
Organizations are considered as either Open or Closed systems. depending on the
organization’s sensitivity to the environment. Closed systems are less sensitive to
environmental resources and possibilities, and open systems are more responsive and
adaptive to environmental changes. Open systems that take in resources and raw
materials at the “input” phase from the environment in a number of forms, depending
on the nature of the organization, industry, and its business.
Organizational culture is considered one of the most important internal dimensions of
an organization’s effectiveness criteria. The Competing Values Framework (CVF) is one
of the most cited and tested models for diagnosing an organization’s cultural
effectiveness and examining its fit with its environment.
Finally remind students that the future holds new predictions.
1. Persistent inequality and unfairness
2. Domestic and international political tensions
3. Environmental dangers
4. Cyber vulnerabilities.
, Organizational Behavior
LEARNING OUTCOMES
4.1 The Organization's External Environment
1. Define the external environment of organizations
Organizations must react and adapt to many forces in their internal and external
environments. The context of the firms such as size and geographic location
impact how environmental forces affect each organization differently. An
understanding of the forces and they currently affecting organizations and
pressuring structural change is crucial.
4.2 External Environments and Industries
2. Identify contemporary external forces pressuring organizations
An understanding of the various industries and organizations ‘fit’ with different
types of environment in crucial. There are small and large organizations that face
environments that are either stable of unstable and managing the organization
by recognizing their environment is a crucial skill.
4.3 Organizational Designs and Structures
3. Identify different types of organizational structures, and their strengths and
weaknesses
An understanding of Mechanistic vs Organic Structures and Systems and how
they differ and how these major concepts help classify different organizational
structures is crucial to recognizing organizational structures. Finally, the issue of
organizational complexity and its impact on organizational structure needs to be
understood.
You should be able to discuss the evolution of different types of Organizational
Structures. You should understand and identify the six types of organizational
structures, and the advantages and disadvantages of each: Functional, Divisional,
Matrix, Geographic, Networked Team, and Virtual.
4.4 The Internal Organization and External Environments
4. Explain how organizations organize to meet external market threats and
opportunities.
You should understand and identify the six types of organizational structures,
and the advantages and disadvantages of each structure:
Functional
Divisional
Matrix
May 12, 2019 2
