ORGANIZATIONAL CULTURE AND ENVIRONMENT:

A LOOK AT THE CONSTRATINTS

How much impact does a Manager have in an organization?

MANAGEMENT THEORY
 Has two views on Managers:

1. Omnipotent View:
 in our first lessons we spoke about how important managers are to
management. This reflects the dominant assumption in management theory.

This view
 the quality of an organization’s managers determines the quality of the
organization itself.
 The differences in the organization’s performance are due to the manager’s
decisions and actions.

Good managers
 Anticipate change
 Exploit opportunities
 Correct poor performance
 Lead their organizations toward goals – which may be changed if needed.
 When profits are up – managers take the credit and reward themselves
 When profits are down – managers are fired and replaced with new blood
 Applicable in business and others like sports teams
 Someone is accountable regardless of reasons.
 To blame
 To praise – even if they had little to do with achieving positive outcomes.

2. Symbolic View:
In this view
 The manager’s ability to affect outcomes is influenced and constrained by
external factors
 Should not expect manager to significantly affect an organization’s
performance
 An organization’s results are influenced by factors managers do not control:
Economy, Customers, Governmental policies, Competitors’ actions,
Industry conditions, Control over technology, Decisions made by previous
managers

Symbolic View is based on the belief that

 Managers symbolize control and influence
 by creating meaning out of randomness, confusion and uncertainty; or
 trying to innovate and adapt
 by developing plans, making decisions and involving themselves in
managerial activities.

In Reality:
Managers are not helpless – nor powerless
They experience
  Internal constraints from organization’s culture
 External constraints from the organization’s environment
They influence the organization’s
 performance
 culture and
 environment

ORGANIZATION’S CULTURE
- Every person has a unique personality
 Warm, shy, relaxes, aggressive
- So do organization’s

Definition
Organizational Culture
Shared
- Values
- Principles
- Traditions
- Way of doing things
That influence the way organization members act

Evolved over time

Determines
- what the members think of the organization
- and how they behave

Implications of Culture
1. Culture is a perception
- from what they hear
- from what they see
- from what they experience
from within the organization
2.Whether they
- come from different backgrounds
- hold different positions
they tend to describe the organization in similar ways (shared)
3. Organizational culture is descriptive
Concerned with how members perceive the organization – not how they like it.
They do not evaluate it.
 7 DIMENSIONS THAT CAPTURE
ESSENCE OF ORGANIZATIONAL CULTURE

Exhibit 3–2 Dimensions of Organizational Culture

Each dimension ranges
- from High (Very Typical)
- to Low (Not Typical)

1. Attention to Detail
- Degree to which employees are expected to exhibit precision, analysis and
attention to detail
2. Innovation and Risk Taking
- Degree to which employees are encouraged to
be innovative and to take risks
3. Stability
- Degree to which organizational decisions and actions emphasize maintaining the
status quo.
4. Aggressiveness
- Degree to which the employees are aggressive and competitive rather than
cooperative.
5. Team Orientation
- Degree to which work is organized around teams rather than individuals.
6. People Orientation
- Degree to which management decisions take into account the effects on people
in the organization
7. Outcome Orientation
- Degree to which managers focus on results or outcome rather than how these
outcomes are achieved.

NOT ALL Cultures

Have EQUAL IMPACT
On Employees’
Behaviors and Actions

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

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.
- Values are clear and widely accepted
- Employees know
- what they should do
- what is expect of them
so they can act / react right away.

DISADVANTAGE OF A STRONG CULTURE

 Prevent employees from trying new approaches
- Especially in periods of rapid change

An organization’s current
 customs, traditions and general way of doing things
are largely due to what
 it has done before and
 how successful it has been with these endeavors.

SOURCES OF ORGANIZATIONAL CULTURE

 The organization’s founder
o Vision and Mission
 Past practices of the organization
o The way things have been done
 The behavior of top management

Organizational practices help maintain culture

CONTINUATION OF THE ORG CULTURE
 Recruitment of like-minded employees
 Socialization of new employees to help them adapt to
the culture.

x
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

HOW CULTURE AFFECTS MANAGERS

SAMPLES OF CULTURE
- Look busy even if you are not
- If you take risks and fail around here, you will pay dearly for it
- Before you make a decision, run it by your boss so that he or she is never
surprised
- We make our product only as good as the competition for us to
- What made us successful in the past will make as successful in the future
- If you want to get to the top here, you have to be a team player.

Simple rule for getting ahead in an organization:

Find out what the organization rewards
and do those things.

Manager’s decisions are influenced by the culture in which he/she operates

Planning
• The degree of risk that plans should contain

• Whether plans should be developed by individuals or teams

• The degree of environmental scanning in which

management will engage

Organizing
• How much autonomy should be designed into employees’
jobs
• Whether tasks should be done by individuals or in teams
• The degree to which department managers interact with each other

Leading
• The degree to which managers are concerned with increasing employee job
satisfaction
• What leadership styles are appropriate

• Whether all disagreements—even constructive ones—should be eliminated

Controlling
• Whether to impose external controls or to allow employees
to control their own actions
• What criteria should be emphasized in employee
performance evaluations
• What repercussions will occur from exceeding one’s budget

ORGANIZATIONAL CULTURE ISSUES

Four current organizational issues worthy of developing:

1. Creating an Ethical Culture
An organizational culture most likely to shape high ethical standards are
 High in risk tolerance
 Low to moderate aggressiveness
 Focus on means as well as outcomes

Managers
 are supported for taking risks and innovation,
 are discouraged from engaging in uncontrolled competition and
 will pay attention to how goals are achieved as well as t0 what goals are
achieved.

Creating an Ethical Culture

• Be a visible role model.

• Communicate ethical expectations.

• Provide ethics training.

• Visibly reward ethical acts and punish unethical ones.

• Provide protective mechanisms so employees can

discuss ethical dilemmas and report unethical
 behavior without fea

2. Creating an Innovative Culture

 Challenge and involvement
o How much employees are involved in, motivated by and committed to
long-term goals and success of the organization
 Freedom
o Degree to which employees can independently define their work,
exercise discretion and take initiative to day to day activities
 Trust and openness
o Degree to which employees are supportive and respectively of each
other
 Idea time
o Amount of time to elaborate on new ideas before action
 Playfulness/humor
o How much spontaneity, fun and ease there is in the workplace
 Conflict resolution
Degree to which individuals make decisions and resolve issues based on the
good of the organizations versus personal interest
 Debates
o How much employees are allowed to express their opinions and put
forth their ideas for consideration and review
 Risk-taking
o How much managers tolerate uncertainty and whether employees are
rewarded for taking risks

3. Creating a Customer-Responsive Culture

 Hiring the right type of employees (ones with a strong interest in serving
customers)
- Hire service-contact people with the personality
and attitudes consistent with customer service—
friendliness, enthusiasm, attentiveness, patience,
concern about others, and listening skills.

 Having few rigid rules, procedures, and regulations

- Employees need to have freedom to meeting
changing customer requirements.
- Design customer-service jobs so that employees
have as much control as necessary to satisfy
customers.

 Using widespread empowerment of employees

 Having good listening skills in relating to customers’ messages
- Train customer service people continuously by
focusing on improving product knowledge, active
listening, showing patience, and displaying
emotions.
  Providing role clarity to employees to reduce ambiguity and conflict and
increase job satisfaction
- As the leader, convey a customer-focused vision

and demonstrate through decisions and actions the

commitment to customers.
- Socialize new service-contact people to the
organization’s goals and values.
 Having conscientious, caring employees willing to take initiative
- Empower service-contact employees with the
discretion to make day-to-day decisions on job-
related activities.

4. Workplace Spirituality
Culture that recognizes that
- people have an inner life that nourishes and is nourished
- (PEOPLE HAVE A MIND AND SPIRIT)
- by meaningful work that takes place in the context of community.
- (WHICH SEEKS MEANING AND PRPOSE IN THEIR WORK AND DESIRE TO
CONNECT WITH OTHER HUMAN BEINGS IN THEIR COMMUNITY._

Seems Important in today’s world. Why?

- A way to counterbalance turbulence of life.
- People looking for connection
- Formal religion has not worked and looking for anchor to replace lack of faith
– filling emptiness
-
Characteristics of a Spiritual Organization
 Strong sense of purpose
o Building an organization for a meaningful purpose instead of just
making money.
 Focus on individual development
o Not just providing jobs. Realize importance of people and need to
grown and learn.
 Trust and openness
o Characterized by mutual trust and honesty.
o Leaders admit mistakes
o Upfront with customers and stakeholders
 Employee empowerment
o Managers trust employees to make conscientious and thoughtful
decision
 Toleration of employees’ expression
o Do not stifle employees expression of feelings

BENEFITS OF A SPIRITUAL ORGANIZATION

• Improved employee productivity

 • Reduction of employee turnover

• Stronger organizational performance

• Increased creativity

• Increased employee satisfaction

• Increased team performance

• Increased organizational performance

Concerns:
- Secular organizations like business should not impose spiritual values on
employees
- Are spirituality and business compatible?

THE ENVIRONMENT

Earlier we discussed the Systems Approach.

 Modern organizations all work in an open system
o Recognizing that it interacts with its environment
 Organizations takes its inputs from the environment
 & Distributes its output to the environment

External Environment
 Those factors and forces outside the organization that affect the organization’s
performance.

Components of the External Environment

 Specific environment: external forces that have a direct and immediate impact on
the organization.
- Suppliers
o Products
o Resources: Human, Funds etc
- Customers
o Tastes can change
- Competitors
o Pricing
o Product/Services Development
o Products/Services Offered.
- Pressure Groups
o Social and political groups outside that influence our organization
 General environment: broad economic, socio-cultural, political/legal, demographic,
technological, and global conditions that may affect the organization.
ECONOMIC CONDITIONS
- Interest rates
- Inflation
- Changes in disposable income
Affect how managers manage their employees

POLITICAL/ LEGAL CONDITIONS

Laws and regulation can limit manager’s options
- Ex. Dismissing an employee / Labor Laws
Political conditions influence decisions and actions
- in country and outside. $ Allocation

SOCIOCULTURAL CONDITIONS
Managers adjust to changing expectations
- Junk food to healthy snacks
- Smoking
- Other countries’ values and cultures

DEMOGRAPHIC CONDITIONS
- Gender,
- age,
- level of education,
- geographic location,
- income,
- family composition
Changes may constrain how manager’s plan, organize, lead and control.

TECHNOLOGICAL
- Continuous technological changes
- DNA – human genetic code
- Telephones are getting smaller and smaller
- Automated Offices / Virtual Offices
- Electronic Meetings
- Robotic manufacturing
- Synthetic fuels

GLOBAL CONDITIONS
- World is getting smaller
- Managers are challenged by big and small competitors in the environment

HOW ENVIRONMENT AFFECTS THE MANAGER

Not all environments are the same.
- It differs in the degree of change and complexity in the organization’s
environment

1. 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.
o and the extent of knowledge the organization has about these
components.
o The less components, the more stable the environment

 Degree of change in environmental components: how dynamic or stable the

external environment is.

o Stable – minimal change

 Changes that can be predicted and anticipated
o Dynamic
 Example: Record company – Digital
 Rapid technology changes make it
Difficult to anticipate

Environmental Uncertainty Matrix

Uncertain environments are threats to organizations

- Managers prefer Simple and Stable Environments
- But environment cannot be controlled.

The second
2. Stakeholders
 Any constituencies in the organization’s environment
o that are affected by the organization’s decisions
and actions
o and who can affect the organization

Why Manage Stakeholder Relationships?

 It can lead to improved organizational performance.
o Knowing who they are can help you serve them better
 It’s the “right” thing to do given the interdependence of the organization and its
external stakeholders.
o Organizations depend on stakeholders

How do we manage our Stakeholders?

1. Identify the organization’s external stakeholders.

2, Determine the particular interests and concerns of the
external stakeholders.
3. Decide how critical each external stakeholder is to the
organization.
4.Determine how to manage each individual external
stakeholder relationship.
- The more critical the stakeholder, the more uncertain the environment