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Lecture 3


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  • 1. Fundamentals of ManagementBBA - 2009
    Lecture 3
    Organizational Culture
    Chapters 2 & 3
  • 2. Recap
    Companies employ two categories of people:
    Non-managerial employees
    Managerial employees
    At its simplest:
    Non-managerial employees work directly on a task or job.
    Managers are those figures to whom non-managerial employees report to
  • 3. Recap:
    A manager is someone who works with and through other people to coordinate and integrate work activities in order to accomplish organizational goals.
    Planning, Organizing, Leading, Controlling
    Management is the coordinating of work activities so that they are completed efficiently and effectively
  • 4. Recap
    Management can be organized according to:
    Planning, Organizing, Leading, Controlling
    Interpersonal, Informational, Decisional
    Technical, Human (interpersonal), Conceptual
  • 5. Recap
    Specialization leads to higher productivity and increased returns (Adam Smith)
    “Management” is the layer between “Capital” (owners) and “Labor” (assets)
    As business processes become more organized and complicated, so does “management” become multilayered and diverse:
    Farmer > Market
    Farmer > Farm manager > Field Workers > Market
    Modern Corporations – Owners are remote, management controls all levels of business.
  • 6. Recap - Management Theories
    Six management theories
    Scientific Management
    General Administrative
    Quantitative Approach
    Organizational Behavior
    Systems Approach
    Contingency Approach
  • 7. General Administrative: Fayolism:
    6 Functions:
    14 Principles:
    Division of Work
    Unity of Command
    Unity of Direction
    Subordination of individual interests
    Esprit de corps
  • 8. Organizational Behavior
    Organizational behavior focuses on human resources. People are the most important assets of a company
    Hawthorn studies indicated that compensation had less of an effect on productivity than did group pressure, acceptance and security.
  • 9. Systems approach – 1960’s
    A system is a set of interrelated, interdependent parts arranged to produce a unified whole
    Business organizations are open systems.
    Managers in a organization coordinate the various parts of the organization an ensure that the goals are being met.
    Systems within an organization are interdependent and affect each other
  • 10. Modern Management Science
    Incorporates all theories to some extent, but Organizational Behavior and Systems Approach dominate.
    Most easily accommodate modern trends such as globalization, HR management, etc.
    The four cornerstones of Management science remain:
  • 11. Business Organizations
    Sole proprietorship: A business owned by one person. The owner may operate on his own or employ others.
    Partnership: a form of business owned by two or more people. In most forms of partnerships, each partner has personal liability of the debts incurred by the business.
    General Partnership, limited partnership, limited liability partnerships
    Corporation: is either a limited liability or unlimited liability entity that has a separate [legal personality] from its members.
    owned by multiple shareholders overseen by a board of directors.
    What are the differences?
  • 12. The Manager
    The general perception is that the managers are directly responsible for an organizations failure or success.
    Omnipotent view of management
    Alternately: managers are just captains of the ship – success and failure are due to outside influences
    Symbolic view of management
    Reality – a combination of the two.
  • 13. The Manager – Omnipotent?
    The performance of a business is assumed to be directly due to the decisions and actions of its managers.
    Managers anticipate changes, exploit opportunities, make corrections, lead the org.
    Rewards are promotions, bonuses, stock options
    Are also held accountable for poor performance
    Can get fired!
  • 14. The Manager – Symbolic View
    A manager’s ability to affect outcome is influenced by external factors
    Economy, customers, competitors, govt. policy and. . . decisions made by previous managers
    These factors are out of the manager’s control
    The part that managers actually play in organizational success or failure is limited.
  • 15. The Manager
    In reality: Managers are neither all powerful, not helpless
    Instead, their decision and actions are constrained
    Internal constraints – Organizational Culture
    External constraints – Organizational environment
  • 16. Organizational Culture
    The shared values, principles, traditions, that influence how the members act
    The way of doing things
    Research shows that there are seven dimensions that describe an organization’s culture
    Each of these dimensions is ranked from high to low
  • 17. Organizational Culture – 7 dimensions
  • 18. Organizational Culture:Strong Vs. Weak Cultures
    Strong cultures: key values are deeply held and widely shared
    Most organizations have strong or moderate cultures
    The stronger the culture, the more it impacts on how managers plan, organize, lead and control
    Research shows that strong cultures are associated with higher performance
    Employees are more loyal - committed
  • 19. How Organizational Culture develops
    Source of the culture is usually the founder
    Vision, mission statement, personality etc
    Maintained by employees
    Recruitment, decision making, action
    Socialization – helping new recruits learn how things are done – stories, rituals, symbols, language
  • 20. Strong Vs. Weak Cultures
    Values are shared throughout organization
    Most employees know this history of the organization
    Employees strongly identify with the culture
    Strong connection between shared values and behaviors
    Values limited to a few people – usually top employees
    Employees get contradictory messages
    Employees have little identification with culture
    Little connection with shared values and behaviors
  • 21. Factors influencing Culture
    Factors Influencing the Strength of Culture
    Size of the organization
    Age of the organization
    Rate of employee turnover
    Strength of the original culture
    Clarity of cultural values and beliefs
  • 22. How Culture Affects Managers
    • The degree of risk that plans should contain
    • 23. Whether plans should be developed by individuals or teams
    • 24. The degree of environmental scanning in which management will engage
    • 25. Organizing
    • 26. How much autonomy should be designed into employees’ jobs
    • 27. Whether tasks should be done by individuals or in teams
    • 28. The degree to which department managers interact with each other
  • How Culture Affects Managers
    • Leading
    • 29. The degree to which managers are concerned with increasing employee job satisfaction
    • 30. What leadership styles are appropriate
    • 31. Whether all disagreements—even constructive ones—should be eliminated
    • 32. Controlling
    • 33. Whether to impose external controls or to allow employees to control their own actions
    • 34. What criteria should be emphasized in employee performance evaluations
    • 35. What repercussions will occur from exceeding one’s budget
  • Current Organizational issues
    Customer Responsive
  • 36. Ethical culture. . .
    Ethics: A moral philosophy that considers questions of right and wrong
    Good and evil, justice, virtue, etc.
    Business ethics – professional ethics
    Issues usually involve – discrimination, compensation, relationships, privacy, law, safety, health, environmental issues, marketing (price fixing) advertizing, etc.
  • 37. Creating an ethical culture:
    Be a visible role model
    Communicate ethical expectations
    Provide ethic training,
    Visibly reward ethical acts and punish unethical ones
    Provide protective mechanisms so that employees are comfortable.
  • 38. Homework:
    How would you describe the culture at FAST-NUCES? Use the seven dimensions.