Chapter 3 Organizational Culture And Environment The Constraints

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  • Chapter 3 Organizational Culture And Environment The Constraints

    1. 1. Chapter 3 ORGANIZATIONAL CULTURE AND ENVIRONMENT: THE CONSTRAINTS © 2003 Pearson Education Canada Inc. 3.1
    2. 2. LEARNING OBJECTIVES <ul><li>You should be able to: </li></ul><ul><ul><li>Differentiate the symbolic from the omnipotent view of management </li></ul></ul><ul><ul><li>Define organizational culture </li></ul></ul><ul><ul><li>Identify the seven dimensions that make up an organization’s culture </li></ul></ul><ul><ul><li>Explain how cultures can be strong or weak </li></ul></ul><ul><ul><li>Describe the various ways that employees learn culture </li></ul></ul>3.2
    3. 3. LEARNING OBJECTIVES (continued) <ul><li>You should be able to: </li></ul><ul><ul><li>Explain how culture constrains managers </li></ul></ul><ul><ul><li>Describe the various components in an organization’s specific and general environments </li></ul></ul><ul><ul><li>Contrast certain and uncertain environments </li></ul></ul><ul><ul><li>Identify the various stakeholders with whom managers have to deal </li></ul></ul><ul><ul><li>Clarify how managers manage relationships with external stakeholders </li></ul></ul>3.3
    4. 4. THE MANAGER: OMNIPOTENT OR SYMBOLIC? <ul><li>Omnipotent View of Management </li></ul><ul><ul><li>Managers are directly responsible for an organization’s success </li></ul></ul><ul><li>Symbolic View of Management </li></ul><ul><ul><li>The actual part that managers play in organizational success or failure is minimal </li></ul></ul><ul><ul><li>Managers must create meaning out of randomness, confusion, and ambiguity </li></ul></ul><ul><li>Reality Suggests a Synthesis </li></ul><ul><ul><li>Managers are neither helpless nor all powerful </li></ul></ul>3.4
    5. 5. PARAMETERS OF MANAGERIAL DISCRETION (Exhibit 3.1) Managerial Discretion Organization’s Environment Organizational Culture © 2003 Pearson Education Canada Inc. 3.5
    6. 6. WHAT IS ORGANIZATIONAL CULTURE? <ul><li>A system of shared meaning and beliefs held by organizational members that determines, in large degree, how they act </li></ul><ul><li>Composite picture of organizational culture may be derived from seven dimensions </li></ul><ul><li>Organization’s personality often shaped by one of these dimensions </li></ul>3.6
    7. 7. DIMENSIONS OF ORGANIZATIONAL CULTURE (Exhibit 3.2) 3.7 © 2003 Pearson Education Canada Inc.
    8. 8. THE CULTURE OF AN ORGANIZATION <ul><li>Strong Versus Weak Cultures </li></ul><ul><ul><li>In strong cultures, key values are deeply held and widely shared </li></ul></ul><ul><ul><li>Strong cultures have greater influence on employees than do weak cultures </li></ul></ul><ul><ul><li>Employees more committed to organizations with strong cultures </li></ul></ul><ul><ul><li>Strong cultures are associated with high organizational performance </li></ul></ul><ul><ul><li>Most organizations have moderate to strong cultures </li></ul></ul>3.8
    9. 9. THE CULTURE OF AN ORGANIZATION (continued) <ul><li>The Source of Culture </li></ul><ul><ul><li>Usually reflects the vision or mission of the founder </li></ul></ul><ul><li>How Employees Learn Culture </li></ul><ul><ul><li>Stories - a narrative of significant events or people </li></ul></ul><ul><ul><li>Rituals - repetitive sequences of activities </li></ul></ul><ul><ul><li>Material symbols – essential in creating an organization’s personality. </li></ul></ul><ul><ul><li>Language - organizations develop unique jargon </li></ul></ul>3.9
    10. 10. THE CULTURE OF AN ORGANIZATION (continued) <ul><li>How Culture Affects Managers </li></ul><ul><ul><li>Establishes appropriate managerial behavior </li></ul></ul><ul><ul><li>Constrains decision making in all management functions </li></ul></ul><ul><ul><ul><li>Planning - degree of risk that plans should contain </li></ul></ul></ul><ul><ul><ul><li>Organizing - degree of autonomy given to employees </li></ul></ul></ul><ul><ul><ul><li>Leading - degree of concern for job satisfaction </li></ul></ul></ul><ul><ul><ul><li>Controlling - reliance on external or internal controls </li></ul></ul></ul>3.10
    11. 11. THE EXTERNAL ENVIRONMENT Customers Competitors Suppliers Public Pressure Groups The Organization General Environment Specific Environment 3.11 © 2003 Pearson Education Canada Inc.
    12. 12. THE EXTERNAL ENVIRONMENT (continued) <ul><li>Forces and institutions outside the organization that may affect organizational performance </li></ul><ul><ul><li>Specific environment - includes those constituencies that have a direct and immediate impact on managers’ decisions and actions </li></ul></ul><ul><ul><ul><li>customers - absorb organization’s outputs </li></ul></ul></ul><ul><ul><ul><li>suppliers - provide material and equipment </li></ul></ul></ul><ul><ul><ul><li>competitors - provide similar services/products </li></ul></ul></ul><ul><ul><ul><li>pressure groups - special-interest groups </li></ul></ul></ul>3.12
    13. 13. THE EXTERNAL ENVIRONMENT (continued) <ul><li>General environment - includes the broad conditions that may affect organizations </li></ul><ul><ul><li>Economic conditions - interest rates, changes in disposable income, and stage of the business cycle </li></ul></ul><ul><ul><li>Political/legal conditions - federal, provincial, and local governments and general stability of Canada </li></ul></ul>3.13
    14. 14. THE EXTERNAL ENVIRONMENT (continued) <ul><li>General environment (continued) </li></ul><ul><ul><li>Socio-cultural conditions - expectations of society (values, customs and tastes) </li></ul></ul><ul><ul><li>Demographic conditions - trends in the physical characteristics of a population </li></ul></ul><ul><ul><li>Technological conditions - most rapidly changing aspect of the general environment </li></ul></ul><ul><ul><li>Global conditions - increasing number of global competitors and consumer markets </li></ul></ul>3.14
    15. 15. HOW THE ENVIRONMENT AFFECTS MANAGERS <ul><li>Assessing environmental uncertainty </li></ul><ul><ul><li>Degree of unpredictable change </li></ul></ul><ul><ul><ul><li>dynamic - frequent change </li></ul></ul></ul><ul><ul><ul><li>stable - minimal change </li></ul></ul></ul><ul><ul><li>Environmental complexity </li></ul></ul><ul><ul><ul><li>the number of components in the environment </li></ul></ul></ul><ul><ul><ul><li>amount of information available or required about those components </li></ul></ul></ul><ul><ul><li>Managers attempt to minimize uncertainty </li></ul></ul>3.15
    16. 16. ENVIRONMENTAL UNCERTAINTY (Exhibit 3.6) 3.16
    17. 17. STAKEHOLDER RELATIONSHIP MANAGEMENT <ul><li>Who are stakeholders? </li></ul><ul><ul><li>Any constituencies that are affected by the organization’s decisions and actions </li></ul></ul><ul><ul><ul><li>include internal and external groups </li></ul></ul></ul><ul><ul><ul><li>can influence the organization </li></ul></ul></ul>3.17
    18. 18. ORGANIZATIONAL STAKEHOLDERS (Exhibit 3.7) 3.18
    19. 19. STAKEHOLDER RELATIONSHIP MANAGEMENT (continued) <ul><li>Why is stakeholder relationship management important? </li></ul><ul><ul><li>The more secure the relationship, the more influence managers will have over organizational outcomes </li></ul></ul><ul><ul><li>It’s the “right” thing to do </li></ul></ul>3.19
    20. 20. STAKEHOLDER RELATIONSHIP MANAGEMENT (continued) <ul><li>How can these relationships be managed? </li></ul><ul><ul><li>Four steps </li></ul></ul><ul><ul><ul><li>identify the stakeholders </li></ul></ul></ul><ul><ul><ul><li>determine real and potential concerns of each stakeholder group </li></ul></ul></ul><ul><ul><ul><li>determine whether stakeholder is critical </li></ul></ul></ul><ul><ul><ul><li>determine specific approach to manage the relationship </li></ul></ul></ul><ul><ul><li>Approach to a stakeholder group based on the importance of the group and the degree of environmental uncertainty </li></ul></ul>3.20
    21. 21. MANAGING STAKEHOLDER RELATIONSHIPS (Exhibit 3.8) 3.21
    22. 22. STAKEHOLDER RELATIONSHIP MANAGEMENT (continued) <ul><li>Boundary spanning </li></ul><ul><ul><li>Important stakeholder and environmental uncertainty </li></ul></ul><ul><ul><li>Interacting to gather and disseminate information </li></ul></ul><ul><li>Stakeholder partnerships </li></ul><ul><ul><li>Stakeholder is critical and environmental uncertainty is high </li></ul></ul><ul><ul><li>Pursue common goal </li></ul></ul>3.22

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