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Chapter 4

Chapter 4 - Organizational, Environment & Culture

Global Management Studies
Course Code
GMS 200
Shavin Malhotra

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Wednesday September 22nd, 2010
Chapter 4
Organizational, Environment and Culture
Environment and Competitive Advantage:
-the world is too uncertain and the competition too intense
-in order to survive, all organizations must dramatically and continuously improve:
Cutting costs
Adding value
Creating new products
What is Competitive Advantage?
-competitive advantage allows an organization to deal with market and environmental forces better
than its competitors
-organization may achieve competitive advantage in many ways
EX: through its products, pricing, customer service, cost efficiency and quality
-regardless of how competitive advantage is achieved the key results are the same
Stakeholders and the Specific Environment:
-specific environment includes people and groups with whom an organization interacts
-specific environment is often described as stakeholders who are people, groups, institutions directly
affected by an organization
- Stakeholders common to the specific environment of most organizations include customers, suppliers,
competitors, regulators and investors
-value creation is creating value for and satisfying needs of constituencies
Who are the Customers?
-customers are always key stakeholders, customers put today’s organizations to a very stiff test
-they want at least 1 of the 4 things:
High quality
Reasonable price
On time delivery
Excellent service
-organizations who can’t meet customer’s expectations suffer the market consequences
-2 important lessons of successful business practices:
1. Always protect your reputation for quality products; it is hard to get and easy to lose
2. Always treat your customers well; they too are hard to get and easy to lose
Levels of Organizational Culture:
-perspective of 2 levels: “observable” and “core” culture
1. Observable Culture: is visible, it is what one sees and hears when walking around an
organization as visitor, a customer or employee
Apparent in the way people dress at work, how they arrange their offices, how they
speak and behave toward one another
2. Core Culture: consists of core values which are beliefs and values shared by organization
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