1. ORGANIZATION AND
2. Figure 3.1
The Organization in its Environment
3. Modernist Levels of the Environment
4. Organizational Environment
Modernist theory, the environment …
lies outside the boundary of the organization.
provides the organization with resources and absorbs
its products and services.
imposes constraints upon and demands adaptation
from the organization.
5. Organizational Environment
Symbolic-Interpretivists suggest environments …
are social constructions.
organizational members construct environmental
features they think are significant.
different organizations construct their environments
differently based on management’s interpretation.
8. Managing the Environment
Protecting the internal
organizational environment from
Example: Material, labour, or capital shortages.
9. Managing the Environment
– Environmental monitoring activities.
– Representing the organizational interests to the
10. Stakeholder theory
Organizations operate under a social contract
that guarantees certain rights to those who have
a stake in the organization’s activities or
outcomes. Those attending to stakeholder
demands will be more successful.
11. Interorganizational Network
Any actor that affects or is
affected by the organization.
employees, media, suppliers,
distributors, government, the
physical environment, etc.
12. Figure 3.3
13. General Environment
14. Some trends in
16. International Environment
The economic, political, sociocultural, legal, technological,
and physical interconnections
that allow for permeable
borders between nations.
17. Table 3.1
Contribution of Environmental
Contribution to Global Change
Personal computers, internet, digital cameras, cell
Global capital markets, technology exchanges,
worldwide trade, etc.
Breakdown of nation-state authority, erosion of
territorial borders, etc.
Global media coverage, popular culture,
Population growth, loss of biodiversity, global
19. Environmental Contingency Theory
Resource Dependence Theory
20. Environmental Contingency Theory
Successful organizations match their internal
structure to environmental characteristics (dynamic
(Burns & Stalker, Lawrence &
21. Environmental Contingency Theory
Strict lines of authority
Distinct areas of responsibility
Rapidly Changing Environments
• Application of skill where needed
• Changing work patterns
22. Environmental Contingency Theory
Information Perspective on
Uncertainty is experienced by individuals
when they make decisions, rather than in the
23. Fig. 3.7
Rate of change
24. Fig. 3.8
Links Between Conditions
Rate of change
is known and
Constant need for
25. Responding to Uncertainty
The Law of Requisite Variety
(General Systems Theory)
For one system to deal effectively with another it must
be of the same or greater complexity.
The organization takes
on the same form
as its environment.
26. Resource Dependence Theory
Analysis of the
network can help the
relationships that exist
between it and other
27. Power and Dependence
An organization depends on resources
controlled by the environment.
The environment therefore has power over an
organization and can influence decision
28. Fig. 3.9
Applying Resource Dependence Theory
29. Managing Power/Dependence
Pfeffer and Salancik suggest prioritizing
dependence elements according to :
The estimate of the importance
of a particular resource
The estimate of resource availability
30. Other Dependence Management
• Vertical integration
• Horizontal integration
• Developing personal
• Establishing formal ties with
*Your job as a manager: find the right mix of
counter-dependencies you can create with
those on whom you depend for critical, scarce,
31. Population Ecology
Organizations within an ecological niche are competitively
interdependent and compete for survival.
Study how & why some
• Operation at the level of
32. Population Ecology
The portion of the environment studied by population
ecology is an ecological niche. Consisting of the
resource pool upon which a group of competitors
*Your job as a manager is to help your
firm find a pool of resources over which it
can compete successfully with other
firms for its survival.
33. Darwin and Organizations
Darwin’s survival of the fittest
principle helps to explain the
dynamics of populations of
Variation: Entrepreneurial innovation that gives birth
to new organizations as well as adaptation of existing
Selection: Organizations that best fit the needs and
demands of their niche are supported with resources.
Retention: Organizational survival and fitness are
maintained through the flow of resources.
34. Domain of
Political Domain of Resource
35. Institutional Theory
The Enacted Environment
36. Institutional Theory (Selznick)
Organizations adapt to both the values of
the internal groups and external society
37. Institutional Theory
(DiMaggio & Powell)
An organization is institutionalized by the
1. Technical, Economic, or Physical
e.g. production and exchange of
goods in a market
2. Social, Cultural, Legal, or Political
e.g. conforming to norms, values, rules,
and beliefs upheld by society.
38. Institutional Pressures
Coercive: Pressure to conform that comes from
the government in the form of rules or laws.
Normative: Pressure from cultural
Mimetic: The desire of one organization to
look like another. Usually used as a response to
39. Social Legitimacy
Institutional environments reward organizations for adopting
acceptable practices and structures. Without this acceptance,
organizations can be driven out of business.
Your job as a manager is to to help your firm mimic practices indicated by the
institutional environment through coercion or normative expectation in order to
ensure its social legitimacy.
40. Fig. 3.10
Social Legitimacy as an
• raw materials
• social legitimacy
41. Enacted Environment
The conditions of the environment
cannot be separated from managers
perceptions of those conditions.
When decision makers respond to
their perceptions they enact the
environment they anticipated.
42. Ambiguity Theory
Encouraging multiple interpretations of goals,
vision, and actions to produce different
Trace discursive and non-discursive
influences over time
44. Burns’s Three Phases of Industrialization
Simple manufacturing – British textile factories
Complex manufacturing – clothing, food, chemical
processing, iron and steel factories
Supply outstrips demand, competition increases, search
for global markets puts focus on consumer, all employees
must contribute to economic success
45. Phases of Industrialization
The Factory System Productivity through
machines and routinization.
46. Phases of Industrialization
Greater product variety, more
complex production processes,
growth in bureaucracy
- Control, routine, and specialization.
- Development of management structure
Society is organized around
the creation of knowledge
and uses of information.
Society is shaped by its
method of acquiring and
49. Avoiding Hegemony
Hegemony is the practice of interpreting
the interests of the ruling class as
- Surface language that implies the dominance
of one group over others.
- Give voice to others.