Summary Internal Environment
Book is complied for Rotterdam Business School.
Taught in year 1 International Business (new version, started in 2020/2021)
Contains subjects: Operations & People, Finance & Accounting, IBA-ECON and Research.
Includes pictures and a total of 24 pages.
Chapter 1: Influence of the External Environment and the Organization’s Culture
Omnipotent view of management: the view that managers are directly responsible for an
organization’s success or failure.
someone has to be held accountable when organizations perform poorly
regardless of the reason.
Symbolic view of management: the view that much of an organization’s success or failure is
due to external forces outside managers’ control.
The term environment refers to institutions or forces that are outside the organization and
potentially affect the organization’s performance.
Environmental uncertainty: the degree of change and complexity in an organization’s
environment.
Environmental complexity: the number of components is an organization’s environment and
the extent of the organization’s knowledge
about those components.
The general environment includes
everything outside the organization.
The part of the environment consisting of
crucial constituencies or stakeholders that Figure 1: Components of External Environment
can positively or negatively influence an organization’s effectiveness is called the specific
environment.
Organizational culture has been described as the shared values, principles, traditions, and
ways of doing things that influence the way organizational members acts and that
distinguish the organization from other organizations.
Research indicated six dimensions that appear to capture the essence of an organization’s
culture:
1. Adaptability – the degree to which employees are encouraged to be innovative and
flexible and to take risks and experiment.
2. Attention to detail – the degree to which employees are expected to exhibit
precision, analysis, and focus on details.
3. Outcome orientation – the degree to which management emphasizes results rather
than on the techniques and processes used to achieve them.
4. People orientation – the degree to which management decisions consider the effect
of outcomes on people within and outside the organization.
5. Team orientation – the degree to which collaboration is encouraged and work
activities are organized around teams rather than individuals.
6. Integrity – the degree to which people exhibit honesty and high ethical principles in
their work.
Strong cultures: organizational cultures in which the
Figure 2: Types of Managerial Decisions Affected by Culture
key values are intensely held and widely shared.
Socialization: a process that helps new employees
learn the organization’s way of doing things.
Figure 3: Establishing and Maintaining Culture
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, Chapter 2: Managing Diversity
Workforce diversity is defined as the ways in which people in an organization are different
from and similar to one another.
The demographic characteristics that we tend to think of when we think of diversity – age,
race, gender, ethnicity, and so on – are just the tip of the iceberg; these demographic
differences reflect surface-level diversity, which includes easily perceived differences that
may trigger certain stereotypes but don’t necessarily reflect the ways people think or feel.
As people get to know one another, these surface-level differences become less important
and deep-level diversity—differences in values, personality, and work preferences—
becomes more important.
these deep-level differences can affect the way people view organizational work,
rewards, communicate, react to leaders, negotiate, and generally behave
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The negative stereotypes of older workers have undoubtedly
discouraged many employers from hiring and retaining people over 50.
contrary to the stereotypes, the evidence indicates that
increasing diversity by hiring and retaining older workers makes
good business sense.
In spite of the progress that has been made, the workplace is still far
from being gender neutral.
Race is defined as physical characteristics, such as bone structure, skin,
or eye color.
Ethnicity is the social and culture factors—including nationality regional
culture, and ancestry – that define the groups a person belongs to.
The US Equal Employment Opportunity Commission (EEOC) classifies Figure 4: Types of diversity found in workplaces
a person as disabled who has any physical or mental impairment that substantially limits one
or more major life activities.
Bias is a tendency or preference toward a particular perspective or ideology.
it’s generally seen as a “one-sided” perspective.
One outcome of our personal biases can be prejudice, a preconceived belief opinion, or
judgment toward a person or a group of people.
a major factor in prejudice is stereotyping, which is judging a person on the basis
of one’s perception of a group to which he or she belongs.
Both prejudice and stereotyping can lead to someone treating others who are members of a
particular group unequally, that’s what we call discrimination, which is when people act out
their prejudicial attitudes toward people who are the targets of their prejudice.
Glass ceiling is a metaphor used to describe an invisible barrier that limits the level to which
a woman or another member of a demographic minority can advance within the hierarchy of
an organization.
Mentoring is a process whereby an experienced (typically senior) organizational member (a
mentor) provides advice and guidance to a less-experienced member (a protégé).
An employee resource group (also frequently called an affinity group) is a voluntary,
employee-led subgroup within an organization that shares distinctive qualities, interests, or
goals.
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, Chapter 3: Managing Change and Disruptive Innovation
The term organizational change is used to describe any alteration of people, structure, or
technology in an organization.
Change agent: someone who acts as a catalyst and assumes the responsibility for managing
the change process.
VUCA: an acronym describing an environment of nonstop volatility, uncertainty, complexity,
and ambiguity.
Kurt Lewin developed the three-step
change process, which means unfreezing
the status quo, changing to a new state,
and refreezing to make the change
permanent.
The popular term used to describe change
methods that focus on people and the nature and Figure 5: The Three-Step Change Process
quality of interpersonal work relationships is called
organizational development (OD).
Stress is the adverse reaction people have to excessive pressure placed on them from
extraordinary demands, constraints, or opportunities.
stress can be caused by personal factors and by job-related factors called
stressors.
Role conflicts create expectations that may be hard to satisfy; role overload is experienced
when the employee is expected to do more than time periods.
Role ambiguity is created when role expectations are not clearly understood, and the
employee is not sure what he or she is to do.
The most commonly used labels for personality traits are Type A and Type B.
type A personality is characterized by a chronic sense of time urgency, an
excessive competitive drive, and difficulty accepting and enjoying leisure time.
type B personality are people who are more relaxed and easygoing and accept
change easily.
Creativity refers to the ability to combine ideas in a unique way or to make unusual
associations between ideas.
The outcomes of the creative process need to be turned into useful products or work
methods, which is innovation.
Idea champions: individuals who actively and enthusiastically support new ideas, build,
support, overcome resistance, and ensure that innovations are implemented.
Disruptive innovation describes innovations in products services or processes that radically
change an industry’s rules of game.
Sustaining innovation: small and incremental changes in established products rather than
dramatic breakthroughs.
Skunk works are defined as a small group within a large organization, given a high degree of
autonomy and unhampered by corporate bureaucracy, whose mission is to develop a project
primarily for the sake of radical innovation.
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