Management11e John Schermerhorn
Chapter 4
Environment,
Sustainability and Innovation
Planning Ahead —Chapter 4 Study Questions
1.What is the external environment of organizations?
2.What are key issues in organization-environment
relationships?
3.What are the emerging challenges of sustainability and the
environment?
4.How do organizations accomplish innovation?
Study Question 1:
What is the external environment of organizations?
The general or macroenvironment —all of the background
conditions in the external environment of the organization including:
Economic health of the economyLegal-political norms,
customs, social valuesSocio-cultural philosophy/objectives of political party
running the governmentTechnological development and availability of technologyNatural
environment nature and conditions of environment
Figure 4.1 Starbucks general environment
Study Question 1:
What is the external environment of organizations?
The specific (task) environment -actual
organizations, groups, and persons with whom an organization interacts
and conducts business
Includes important stakeholders such as:
CustomersSuppliersCompetitorsRegulatorsOwners
Study Question
2: What are key issues in
organization-environment relationships?
Customer relationship management : establishes and maintains
high standards of customer service in order to strategically build lasting
relationships with and add value to customers
Supply chain management: strategic management of all
operations relating to an organization’s resource suppliers
Study Question
2: What are key issues in
organization-environment relationships?
-Competitive advantage : a core competency that clearly sets
an organization apart from competitors and gives it an advantage over them in
the marketplace
-Companies may achieve competitive advantage in many ways,
including:
§Products
§Pricing
§Customer
service
§Cost
efficiency
§Quality
§Knowledge
- Customers want:
§High
quality
§Low
price
§On-time
delivery
§Great
service
-Key customer service lessons:
§Protect
reputation for quality products
§Treat
customers right
-Environmental uncertainty : a lack of complete information
regarding what exists and what developments may occur in the external
environment
-Two dimensions of environmental uncertainty:
§Degree
of complexity
§Rate
of change
-Organizational Effectiveness
§sustainable
high performance in using resources to accomplish mission and objectives
Systems resource approach focuses on resource
acquisitionInternal process approach focuses on operations efficiencyGoal
approach focuses on accomplishing key objectivesStrategic Constituencies
focuses on stakeholder impact
Study Question 3:
What are the emerging challenges of sustainability and the environment?
-Sustainable development : makes use of environmental
resources to support societal needs today while also preserving and protecting
them for future generations
-Three P’s of organizational performance : Profit, People, Planet
Study Question 3:
What are the emerging challenges of sustainability and the environment?
Environmental capital –natural resources used to sustain
life and produce goods and services for society:
§Land
§Water
§Minerals
Study Question 3:
What are the emerging challenges of sustainability and the environment?
Green management –managing people and organizations in ways
that preserve the natural environment :
§Reducing
energy consumption
§Minimizing
environmental impact
Study Question 3:
What are the emerging challenges of sustainability and the environment?
-Human sustainability –concern for the effect of management
practices on employee physical and psychological well-being :
§Health
and wellness programs
§Stress
management
§Minimizing
work-family conflict
§Control
over work
§Fair
wages and opportunities
-Innovation -process of putting new ideas into practice
-Business innovations
§Product
innovation
§Process
innovation
§Business
model innovation
Study Question 4: How
do organizations accomplish innovation?
-Sustainable innovations –reduce carbon footprints and
environmental impacts of organizations, their practices and products
-Social business innovations –find ways to use business
models to address important social problems
-The innovation process
Reverse innovation –innovation can come from any level in
the organization or location
Step 1 •ImaginingStep 2 •DesigningStep 3 •ExperimentingStep
4 •Assessing
-Commercializing Innovation -turning new ideas into products
services or processes to increase profits through
-Greater sales
-Reduced costs : 3M’s process to develop Post-It Notes is a
good example
Study Question 4: How
do organizations accomplish innovation?
Characteristics of innovative organizations :
§Strategy
and culture
§Structures
§Systems
§Staffing
and management
Chapter 4 Case
§Global Green USA: Greener cities for a cooler planet
27
For activities and assessments, please visit…
§www.wiley.com/college/schermerhorn