7–1

Organization

• The External Environment

• Mega or General• Environment

Task or Specific Environment

TheOrganization

Suppliers Customers

PublicPressureGroups Competitors

7–2

Organization

• The Mega Environment

Technological element Economic element

International element

Legal – Political element

Socio cultural element

The Organization

7–3

Organization

• The Task Environment

TheEmployment

Market

Customers / Clients

PublicPressureGroups

Suppliers

Government Regulators

Competitors

TheOrganization

7–4

Organization

• The Task Environment• Major elements;1. Customers and Clients

Individual and organizations purchasing products / services.

2. CompetitorsOther organizations either offering ( or a high potential of offering ) rival products / services (Restaurants, Hotels).

3. SuppliersOrganizations and individuals supplying resources an organization needs to conduct its operations.

7–5

Organization

• The Task Environment

4. Labor Supply

Individuals potentially employable by an organization.

5. Government Agencies

Agencies providing services monitoring compliance with laws and regulations at local, State or regional and national levels (Environmental Laws, Labor Laws, Social Security).

7–6

Organization

• Competitive Forces in the Task Environment

Rivalry among existing forms

in industry

Buyers bargaining

power

Threat of new Competitors

Suppliers bargaining

power

Threats ofsubstitute

goods/services

7–7

Organization

• Internal Environment

• Nature of organization culture

• A system of shared values, assumptions, beliefs and norms uniting organizational members

• The way we do things around here.

• The “glue” binding all the parts (or the oil that keeps them moving).

7–8

Organization

• The organization’s Culture

• A system of shared meanings and beliefs held by organizational members.

Implications:Culture is a perception.Culture is shared.Culture is descriptive

(Complaint culture, Shouting culture, Disturb Culture)

7–9

Organizational Culture

• Sources of Organizational CultureThe organization’s founder

Vision and mission

Past practices of the organization The way things have been done

The behavior of top management

• Continuation of the Organizational CultureRecruitment of like-minded employees who “fit”Socialization of new employees to help them adapt to

the culture

7–10

Organizational Culture

• 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

7–11

Organizational Culture

• Stakeholder Relationships

• Stakeholders

Any constituencies in the organization’s external 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.

7–12

Managing Stakeholder Relationships

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.

7–13

Organization

• Organizational Stakeholders

Unions

Employees

OrganizationShareholders

Communities

Suppliers Media

CustomersSocial andPolitical

Action Groups

Competitors

Trade and Industry Associations

Governments

7–14

Stake holder's Concern

• Stake holder Group

• Owners and Investors

Examples of concerns• Financial Soundness• Consistency in meeting

stake holder expectations• Sustained profitability• Average return on assets• Timely and accurate

disclosure of financial information

7–15

Stake holder's Concern

• Stake holder Group

• Customers

Examples of concerns• Product / service quality,

and availability• Responsible management

of defective or harmful products / services

• Safety records for products / services

• Pricing policies and practices

• Honest, accurate and responsible advertising

7–16

Stake holder's Concern

• Stake holder Group

• Employees

Examples of concerns• Nondiscriminatory, merit-

based hiring and promotion• Diversity of workforce• Wage and salary levels and

equitable distributions• Availability of training and

development• Workplace safety and

privacy

7–17

Stake holder's Concern

• Stake holder Group

• Community

Examples of concernsEnvironmental issues• Environmental sensitivity in

packaging and product design

• Recycling efforts and use of recycled materials

• Pollution prevention• Global application of

environmental standards

7–18

• Organization’s Social Responsibility

• The obligation of an organization to seek actions protecting and improving society’s welfare along with its own interests.

7–19

Organizational Culture

• Factors Influencing the Strength of Culture

Size of the organizationAge of the organizationRate of employee turnoverStrength of the original cultureClarity of cultural values and beliefs

7–20

Organizational Culture

• 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.

7–21

Organizational Culture

• Ethical Guidelines for Managers

1. Obey the law

2. Tell the truth

3. Show respect for people

7–22

Organizational Culture

• Creating an Ethical CultureHigh in risk toleranceLow to moderate

aggressivenessFocus on means as

well as outcomes

• Creating an Innovative CultureChallenge and

involvementFreedomTrust and openness Idea timePlayfulness/humorConflict resolutionDebatesRisk-taking

7–23

Organizational Culture

• Creating a Customer-Responsive CultureHiring the right type of employees (ones with a strong

interest in serving customers)Having few rigid rules, procedures, and regulationsUsing widespread empowerment of employeesHaving good listening skills in relating to customers’

messagesProviding role clarity to employees to reduce

ambiguity and conflict and increase job satisfactionHaving conscientious, caring employees willing to

take initiative

7–24

Spirituality and Organizational Culture

•Workplace SpiritualityThe 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 OrganizationStrong sense of purposeFocus on individual developmentTrust and opennessEmployee empowermentToleration of employees’ expression

7–25

Benefits of Spirituality

• Improved employee productivity• Reduction of employee turnover• Stronger organizational performance• Increased creativity• Increased employee satisfaction• Increased team performance• Increased organizational performance

7–26

How Culture Affects Managers

• Cultural Constraints on ManagersWhatever 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.