2. AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO:
Define, What is Organizational Culture.
Recognize the characteristics and importance of
organizational culture.
Asses how Culture effects a manager's performance.
Describe current issues in organizational culture.
Understand external environment of an organization.
4. Omnipotent View of Management
Managers are directly responsible for an organization’s
success or failure.
The quality of the organization is determined by the quality
of its managers.
Managers are held accountable
for an organization’s performance
yet it is difficult to attribute
good or poor performance
directly to their influence
on the organization.
Good managers anticipate change and
Exploit opportunities.
5. Symbolic View of Management
Much of an organization’s success or failure is due
to external forces outside of managers’ control.
The ability of managers to affect outcomes is
influenced and constrained by external factors.
The economy, customers, governmental policies,
competitors, industry conditions,
technology, and the actions of
previous managers
Managers symbolize control and
influence through their action.
6. Parameters of Managerial Discretion
Reality Suggests A Synthesis
In reality, managers are neither powerful nor helpless and
their decisions and action options are constrained
Internal constraints come from the organization’s culture
and external constraints come from the organization's
environment
7. Organizational Culture
A system of shared meanings and
common beliefs held by organizational
members that determines, in a large
degree, how they act towards each other.
8. The Organization’s Culture
“The way we do things around here.”
Values, symbols, rituals, myths, and practices
Implications:
Culture is a perception.
Culture is descriptive.
Culture is shared.
11. Strong versus Weak Cultures
Strong Cultures
Are cultures in which key values are deeply held and widely
held.
Have a strong influence on organizational members.
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
12. Benefits of a Strong Culture
Creates a stronger employee commitment to the
organization.
Aids in the recruitment and socialization of new
employees.
Fosters higher organizational
performance by instilling and
promoting employee initiative.
14. How Employees Learn Culture
Stories
Narratives of significant events or actions of people that
convey the spirit of the organization
Rituals
Repetitive sequences of activities that express and reinforce
the values of the organization
Material Symbols
Physical assets distinguishing the organization
Language
Acronyms and jargon of terms, phrases, and word meanings
specific to an organization
15. How Culture Affects Managers
Cultural Constraints on Managers
Whatever managerial actions the organization recognizes as
proper or improper on its behalf
Whatever organizational activities the organization values
and encourages
The overall strength or weakness of the organizational
culture
Simple rule for getting ahead in an organization:
Find out what the organization rewards and do those things.
17. Components of the External Environment
Specific environment:
External forces that have a direct and immediate impact on
the organization.
General environment:
Broad economic, socio-cultural, political/legal,
demographic, technological, and global conditions that may
affect the organization.
19. The Organizational Environment
1. Specific Environment
“External forces that have a direct impact on manager’s
decisions and actions and are directly relevant to the achievement
of an organization’s goals”.
An organization’s specific environment is unique to it
Forces That Make Up A Specific Environment:
1. Customers
An organization exists to meet needs and wants of its
customers and they represent a potential uncertainty to an
organization because their tastes are continuously changed
20. The Organizational Environment
2. Suppliers
Managers seek to ensure a constant flow of needed inputs at
the lowest possible price and a limitation and delay in supply
can constrain a manager’s decisions
3. Competitors
All organizations either NPOs, NGOs and POs ------ have
competitors
Managers cannot afford to avoid or ignore competition
For Example: PTV has completion with digital cable, satellite,
DVDs and the internet----provide customers a broader choice
21. The Organizational Environment
4. Pressure Groups
Managers must recognize special-interest groups that attempt to
influence the actions of organizations
A manager should have information about environmental and
human rights activists picketing, boycotting and threatening
some organizations in order to managers to get change decisions
For Example: Pressure by PETA on McDonalds
Pressure by PALPA on PIA for improvements in incentives
22. The Organizational Environment
2. The General Environment
“It includes the broad economic, political/legal,
sociocultural, demographic and global conditions that affect
an organization”.
This environment does not impact very much but a
manger must consider them as they plan, organize, lead
and control
23. The Organizational Environment
Forces That Make Up A Specific Environment:
1. Economic Conditions
Interest rates, inflation, changes in disposable income, stock
market fluctuations and the stage of the general business cycle
are some economic factors that affect management practices
When consumers income fall or when their confidence about job
security declines, they will postpone purchasing anything that
isn’t a necessity
24. 2. Political/Legal Conditions
Federal, State, Provincial and local laws, as well as global and other
country laws and regulations, influence what organizations can and
cannot do
Organizations spend a great deal of time and money to meet such
Governmental demands, and these reduce managerial discretion by
limiting the available choices
For Example: Quota for disables and minorities, principles of good
faith and dealings with employees by employers
Besides this, political conditions and stability of a country where an
organization operates and the attitudes that elected Governmental
officials hold towards business also influences a manager’s
decisions
25. The Organizational Environment
3. Sociocultural Conditions
Managers must adapt their practices to the chaining expectations of
the society in which they operate
As values, customs and tastes change, managers must also change
For Example: The demand of more balanced life by the workers,
organizations have had to adjust by offering family leave policies,
flexible work hours and on-site child care facilities
26. The Organizational Environment
4. Technological Conditions
The most rapid change in general environment
Technology has introduced the automated offices, electronic
meetings, robotic manufacturing, lasers, integrated circuits, faster
and more powerful microprocessors, synthetic fuels and new
models of business
Companies that have invested in technology have higher ROI such
as google, GE, e-bay and Wal-Mart
27. The Organizational Environment
5. Demographic Conditions
Demographic conditions encompass trends in population
characteristics such as gender, age, level of education,
geographic location, income and family composition
Changes in these conditions may constrain how managers plan,
organize, lead and control
6. Global Conditions
Managers are challenged by an increasing number of global
competitors and markets as part of the external environment
Globalization has impacted the way as mangers plan,
organize, lead and control
28. How the Environment Affects Managers
Environmental Uncertainty
The extent to which managers have knowledge of
and are able to predict change their organization’s
external environment is affected by:
Complexity of the environment: the number of
components in an organization’s external environment.
Degree of change in environmental components: how
dynamic or stable the external environment is.
29. How the Environment Affects Managers
There are two ways the environment affects
managers
(1) Through the degree of Environmental
Uncertainty
(2) Thorough managing stakeholders
relationships
30. How the Environment Affects Managers
1. Assessing Environmental Uncertainty
“The degree of change and complexity in an
organization's environment is called Environmental
Uncertainty”.
Hence Environmental Uncertainty has two dimensions
(a) Degree of Change
(b) Degree of Complexity
31. How the Environment Affects Managers
(a) Degree of Change
Stable Environment: If components in an origination's
environment change infrequently, its called Stable
Environment
A stable environment might be one in which there are no new
competitors, few technological breakthroughs by current
competitors, little activity by pressure groups to influence the
organization and so forth e.g. Zippo Lighters have stable
environment
32. How the Environment Affects Managers
Dynamic Environment: If components in an origination's
environment change frequently, its called Stable Environment
A dynamic environment is highly uncertain and unpredictable
E.g. The recorded music industry faces a dynamic environment
due to digital formats and music-downloading websites
When we talk about degree of change, we mean change
that is unpredictable and if change can be accurately
anticipated, it’s not uncertainty that mangers must confront
33. How the Environment Affects Managers
(b) Environmental Complexity
The number of components in an organization's
environment and the extent of the organization’s knowledge
about those components
When an organization has fewer competitors, customers,
suppliers, government agencies and so forth, the less
complex and uncertain it’s environment is
34. How the Environment Affects Managers
(2) Managing Stakeholder's Relationships
Stakeholders: Any constituencies in the organization’s
environment that are affected by the organization’s
decisions and actions
The more obvious and secure the relationships among
stakeholders, the more influence the managers will have
over organizational outcomes
Hence Stakeholders are influenced by an organization
and influence on an organization in return
35. How the Environment Affects Managers
These stakeholders include both internal and eternal
stakeholders
Mangers take inputs (resources) from External
Stakeholders and as outlets for outputs (goods and
services)
36. Stakeholder Relationships
Stakeholders
Any constituencies in the organization’s environment that
are affected by the organization’s decisions and actions
Why Manage Stakeholder Relationships?
It can lead to improved organizational performance.
It’s the “right” thing to do given the interdependence of the
organization and its external stakeholders.
37. Stakeholder Relationships
Managers can manage Stakeholders relationships in
following ways
a) Identify the organization’s external stakeholders
b) Determine the particular interests and concerns of the external
stakeholders
c) Decide how critical each external stakeholder is to the
organization
d) Determine how to manage each individual external stakeholder
relationship
39. CURRENT Organization
Cultural Issues
Creating an Ethical Culture
Creating an Innovative Culture
Creating a Customer-Responsive Culture
Spirituality and Organizational Culture
Teamwork Culture
40. Creating an Ethical Culture
High in risk
tolerance
Low to moderate
aggressiveness
Focus on means as
well as outcomes
Creating an Innovative Culture
Challenge and
involvement
Freedom
Trust and openness
Idea time
Playfulness/humor
Conflict resolution
Debates
Risk-taking
41. Hiring the right type of employees (ones with a
strong interest in serving customers)
Having few rigid rules, procedures, and regulations
Using widespread empowerment of employees
Having good listening skills in relating to customers’
messages
Providing role clarity to employees to reduce
ambiguity and conflict and increase job satisfaction
Having conscientious, caring employees willing to
take initiative
Creating a Customer-Responsive Culture
42. Spirituality and Organizational Culture
Workplace Spirituality
The recognition that people have an inner life that
nourishes and is nourished by meaningful work that
takes place in the context of community.
Characteristics of a Spiritual Organization
Strong sense of purpose
Focus on individual development
Trust and openness
Employee empowerment
Toleration of employees’ expression