Professional Documents
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Managing The Organizational Environment
Managing The Organizational Environment
Sumita Mishra
Organizational Environment
Burns and Stalker
• Mechanistic Structures
-High Complexity, formalization and centralization. They
performed routine tasks, relied heavily on programmed
behavior and relatively were slow to responding to novel
situations.
Landmark -Ford Car Factories of the 1920s
Contributions • Organic Structures
-Flexible and adaptive with emphasis on lateral
communication, influence based on expertise, loosely
defined jobs and emphasis on sharing information.
-3M
Emery and Trist
• Placid-Randomized Environment
-Stable, predictable and not prone to change. Economists’ model of
pure competition
-Beer distributors
• Placid Clustered Environment
-Change is slow but not random. Forces in the environment are
Landmark linked to one another. Powerful coalitions (suppliers or buyers)
• The disturbed reactive Environment
Contributions -Creation of monopolies. Anti-trust issues, 7-Up and Coke and Pepsis
• The turbulent Field Environment
-Most dynamic and ever changing. Coke’s action in New York City to
compete with Mountain Dew. Syringes in Pepsi cans, Glass Shards
in Gerber Baby Foods, Poisoning of Tylenol, Church of
Scientology's attack on Prozac and hate sites such as
Ihatemcdonals.com
What is a buyer’s market???
• Market conditions that favor a buyer
• What conditions might favor a buyer?
• The term "buyer's market" is commonly used to describe
real estate markets, but it applies to any type of market in
which there is more product available than there are
people who want to buy it.
• Opposite can be a seller’s market
• Coalitions can be seen in e-commerce sector
What is the PESTLE Analysis?
Inter
Organizationa Thrust on horizontal external
l relationships in organizations
Relationships
Growth through relationships
with other contributors to the
environment
Biotherm and Renault : The Zoe Spa Car
Collaboration
s Facebook and Mercedes Benz: Provision
of a high resolution screen in mbrace 2
cars for the purpose of social driving
Key Concepts
o Organization goal is the reduction of dependence on other organizations for resources
o Symbiotic interdependencies IOR Strategies
o Competitive Interdependencies
• Apple
1. Manufactures custom A chips for iPhones and iPads
2. Developed LCD and OLED Screen Technologies
3. Customs touch ID fingerprint sensor
4. Sells its products through its own exclusive stores
around the world
• Disney
1. Ownership of companies that produce films
2. Marketing of films under the Disney Brand
Facebook and Instagram
• Acquisition in 2012 for $1 Billion
Joint Ventures
Informal Formal
Competitive IOR- Org.
with other organizations
that compete for Collusions/ Third party Strategic Merger &
resources Cartels Linkages Alliances Takeover
-Least Formal
-Trust, Fair Business Practices, Goodwill among customers,
1.Reputation suppliers
DeBeers Benetton
Nestle
Informal Formal
Minority Joint
Long Term Networks
ownership Ventures
Contracts
-Buying of minority -Joint
-Least formal as -Org. action coordinated
by contracts rather than stake/shares in ownership of
no org. ties apart organizations
from agreement formal ties Business
-Nike with its suppliers -Kiretsu (Toyota -IBM with
-Sharing of owns
Resources or Risk and distributors Intel to
49% shares in produce
of marketing, R&D supplier companies)
-Kellogg's with Farmers mainframes
What is a Minority Ownership? Keiretsu
Key Concepts
o Explains how organizations are born & die in a population of
existing organizations
o Population is a set of organizations engaged in similar
activities with similar resource utilization & outcomes
o Organizations follow a pattern of natural selection
Population Ecology
Theory
Some Iconic Innovations?
2. Walkman in 1982
Survival
Strategies
Generalists K Strategy
-Spreading of skills to compete for -Entering an environment
a broad range of resources in many Niches Late
-Infosys -IBM and the PC
Tesla
Disruptive Google
Brands that
have changed Visa
the World Apple
Facebook
Decade of Origin/Key Contributors
o 1970s
o Ronald Coase
Key Features
o Transaction Costs are the costs of negotiating,
Transaction monitoring and governing exchanges between
Cost Theory people
o Goal of organization is to reduce the costs of
exchanging resources in the environment & costs
of managing exchanges internally
o Environmental Uncertainty & Bounded
Rationality+ Opportunism & Small Numbers+
Risk & Specific Assets = Transaction Costs
Biggest Marketing Blunders leading to increase in transactional costs
-Gerber
-Coca Cola
-Fiat
-Kenneth Cole
2. Franchising
-Is a business that is authorized to sell a company’s products in a
certain area
-The franchiser sells the right to use its resources to a person or
group for a flat fee or a share in the profits
-McDonalds & Body Shop
1. Keiretsu
IOR Strategies