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Lecture

Environment, organizational culture and diversity


Department
Global Management Studies
Course Code
GMS 200
Professor
Shavin Malhotra

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GMS Week 4 Lecture Notes
Environment, organizational culture and diversity
Environmental uncertainty: is a lack of complete information regarding what exists and
what developments may occur in the external environment
Two dimensions of environmental uncertainty (refer to matrix in textbook)
1. Complexity (for example: heavy competition)
2. Rate of change (for example: IT industry has a very high rate of change)
Canada's growth rate is 1.5%, whereas China's is around 9.5-10%
What constitutes the external environment of organizations?
1.Economic
a.Companies price their products in accordance with the country's disposable
2. Income
a.E.g.: during the recession, Kia made a very smart move. Kia came into North
America and provided a warranty of 7 years, much more than average
number of years.
3.Socio-Cultural
a.Kraft - sell processed foods, contain trans-fats. May affect sales.
b.Cake mixes in Japan - a giant confectionary introduced cake mixes to the
Japanese markets. After considerable time and money, General Mills realized
that even though the Japanese loved western-style cakes, most homes didnt
have ovens! "Cakeron" was re-introduced as a cake mix adapted for the rice-
cooker. Problem solved? No, because no one considered the fact that rice was
sacred in Japan, and housewives felt the flavors contaminated the rice, even
after washing the cooker. The product was a big flop!
4.Legal-political
a.Chinese version of Windows. Microsoft entered China in early 1990s. Used
Taiwan as a production base. There has been a strong political conflict
between the two countries. Also, China has a very large market for
counterfeit products, especially in software.
5.Technological
6.Natural environment
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