Impact of Environment and Cultural Variables on Organization Structure and

Style

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Facilitator and Course Coordinator:

Vinayshil Gautam PhD, FRAS(London)(Founder Director IIM K; Leader Consulting Team IIM S)

A Al_Sager Chair Professor and First Head,

Management Department, IIT D

Chairman, DKIF

TOPICS COVERED

• External EnvironmentFirst Tier

General EconomySuppliersCustomersCompetition

Second TierPolitical Legal ForcesTechnologyInternational ForcesCustoms/CulturesSocio Cultural Forces

• Internal EnvironmentManagers

ValuesEthics

WorkersWork EthicsWork Values 2

Open System

General system approach

Property of Dynamic Homeostasis

Goal Oriented Growth

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External Environment

There are two types of forces:

First Tier Second Tier

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First Tier

General Economy Suppliers Customers Competition

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Second Tier

Technology Customs/Cultures Political Legal Forces International Forces Socio Cultural Forces

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Technology

Defining technology Types of technology Technology and structure Interaction of technology and culture

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Defining Technology

Technology of work refers to the process by which an organization converts input (knowledge, skills and techniques) to outputs.

Technology must be developed in conjunction with the resources needed for capturing and retaining the customer.

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Role of Organizational Technology

InputsInputs TRANSFORMATIONTRANSFORMATION Output Output

PROCESS PROCESS

(technology)(technology)People product

Materials service

Equipment job satisfaction

Money profits

Plant and facility

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Types of Technology

Based on work of Thompson’s and Perrow, the three kinds of technologies are Mediating Technologies, Long Linked Technologies and Intensive Technologies

Their categorization is based on task interdependence, identifying low, medium and high levels of interdependence needed to perform tasks.

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Types of Technology

Mediating Technologies

This type of technology is low interdependence, which is to say that the different parts of the whole organization are relatively independent of each other. Few demands are placed on coordination of the parts, cooperative decision making, and the like. This type of technology is best suited for bureaucratic structure with high standardization as the dominant integrator.

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Types of Technology

Long Linked Technologies

Characterized by moderate interdependence, technologies with sequential interdependence are typified by auto assembly plants or school cafeterias. Because these technologies demand coordination among the parts, management needs to plan ahead.

A bureaucratic structure with planning is best suited for this technology.

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Types of Technology

Intensive Technologies

The third type of technology, reciprocal interdependency, has the greatest amount of task interdependency. It makes the greatest demand on managerial decision making and communication/coordination.

Examples of organization using this type of tech include construction firms, mental health clinics and hospitals.

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Thompson’s Classification By Task Interdependence

Mediating Pooled interdependence

Commercial bank

Long linked

Sequential interdependence

Assembly line automobile

Intensive Reciprocal interdependence

General hospital

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Technology and Structure :By Perrow

Based on Degree of Non routine ness

Task Variety

Task Coping Difficulty

Few Exceptions Many Exceptions

Craft Work Non Routine Work

Routine Engineering

Engineering Technology

High

Low

Task Variability

Task Coping Difficulty

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Technology and Structure

The key dimensions on which differing technologies rest are routine ness and interdependence. Technology seem to be a determinant of structure but perhaps not the major one.

Routine ness technologies do seem to be associated with low complexity. The greater the routine ness, the less training is required by incumbents . Thus, organization with routine technology need high formalization at the technology’s core.

Routine technology goes with centralization if formalization is low; otherwise, with high formalization and routine technology we can easily have a decentralized structure.

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How new technologies are affecting Organizations and Work Flow

New information technologies are radically transforming

organizational structure and strategy. Staff members find themselves using a much more

elaborate network of communication that includes both personal contacts and task related interactions.

Power based on hierarchical position was replaced by power based on competency as demonstrated throughout the system.

The job of members became more flexible and the time available for getting work done increased.

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Technology

Technology and individual Technology and group Technology and Industrial relation

Technology and organization structure study by J Woodward

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Culture

What is culture

Common elements of culture

Determinants of Culture

Dimensions of culture

Characteristics of culture

How cultures are analyzed?

Maintaining the culture

Organization cultures and effectiveness

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What is culture

Culture is a pattern of basic assumptions- invented, discovered or developed by a given group as it learns to cope with its problems of external adaptations and internal integration-that has worked well enough to be considered valuable and to be taught to the new members.

-Edger Schein.

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Common Elements of Culture

Beliefs, values and attitudes Artifacts Language Behavior patterns Norms of behavior Ethical codes

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Determinants of organizational culture

History and ownership Size Technological base Goals and Objectives The state of environment Organizational members

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Dimensions / Typology of Culture

Harrison / Handy Typology Power Culture Role Culture Task Culture Person Culture

Deal and Kennedy Typology Tough-guy, macho culture Work-hard/play hard culture Bet-your company culture Process Culture

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Harrison / Handy Typology

Harrison suggested four types of organizational culture called power, role, task and person.

Later Handy reworked describing four cultures using simple pictograms and making reference to Greek mythology.

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Power Culture(The Web)

Advantages Ability to react quickly

Disadvantages Not feasible for large and complex

organizations Cant adjust to change in

Leadership

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Role Culture(Greek Temple)

Advantages Reliance on formal rational rules It generate economies of scale

Disadvantages Inability to innovate and adapt

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Task Culture(Lattice)

Advantages

Emphasizes technical expertise rather than formal authority

Disadvantages Creates high level of stress and conflicts Management controls problems

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Person Culture(Cluster)

Advantages

Existence of organizations for individuals

Disadvantages

Difficult to Manage

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Deal Kennedy Typology

Bet Your CompanyTough

Guy/Macho

ProcessWork Hard/

Play Hard

Slow Fast

High

Low

Speed of Feedback

Degreeof

Risk

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The Deal and Kennedy typology

The tough-guy, macho culture

High risk, rapid feedback culture Focus on speed and the short-term Places enormous pressure on individual Burn-out is a a common problem Internal competition, tension and conflict are normal Tend to have high turnover of staff

Example: Xerox, McDonald’s

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The Deal and Kennedy typology

The work-hard/play-hard culture

Low-risk, quick-feedback culture. Highly dynamic and customer-focused. Tendency for volume to displace quality. Pursue ‘quick-fix’ solutions when things go wrong.

Examples: Silicon Valley companies, IT companies

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The Deal and Kennedy typology

Bet-your-company culture

High risk, low feedback Focused primarily on the future, decision making tends

to be top-down. Respect of authority and technical competence. Strength to deal with the high-pressure decisions Good at producing high quality inventions and scientific

breakthroughs.

Examples: Boeing, Shell

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The Deal and Kennedy typology

The process culture

Low-risk, slow-feedback culture Focus on how to do rather than what to do. Orderly, punctual and attend to details. Emphasis on job titles and formality. Effective when dealing with known predictable

environment Unable to react quickly, lack of vision and creativity.

Examples: banks, insurance companies, civil services.

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Characteristics of culture

Innovation and risk taking Outcome orientation Team orientation Stability Aggressiveness Dominant values Attention to detail

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How cultures are analyzed

Weather forecast type by Harry C Miller

Trade winds

The organization's purpose

Temperature

The hotness or coldness of morale

Ceiling level The level of desire, commitment and energy for organizational goals.

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Maintaining the culture

By group processes

By constant reinforcement of core values and beliefs

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Organization cultures and effectiveness

Reactive Organization Responsive Organization Proactive Organization Interactive Organization Inspired Organization

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Internal Environment

Managers Values

• Theoretical values• Economic values• Aesthetic values• Social values• Political values• Religious values

Ethics

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Phase 1

Profit Maximizing Management

Phase 2

Trusteeship Management

Phase 3

Quality of Life Management

Economic ValuesRaw self interest Self interest

Contributor's interest

Enlightened self interest

Contributors interest

Society’s interest

What's good for me is good for my country

What's good for GM is good for our country

What’s good for society is good for our company

Profit maximizer Profit satisfier Profit is necessary but

Money and Wealth are most important

Money is important but so are people

People are more important

Let buyer beware Let us not cheat the customer

Let the seller beware

Labor is commodity to be bought and sold

Labor has certain rights which need to be recognized

Employee dignity has to be satisfied

Comparison of Managerial Values

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Comparison of Managerial Values

Technology Values

Technology is very important

Technology is important but so are people

People are more important than technology

Social Values

Employee personal problems must be left at home

Employee have needs beyond their economic needs

Hire the person as a whole

manage business as he please

Recognize the value of group participation

Group participation is fundamental to success

Minority groups are inferior

Minority groups have their place in the society

Minority group members are people are you and I are

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Comparison of Managerial Values

Political Values

Government which govern lest is the best

Government is a necessary evil

Business and government must cooperate to solve society's

Environmental Values

Environment controls the destiny of man

Man can control and manipulate environment

We must preserve the environment in order to lead a quality life

Aesthetic Values

Aesthetic values?? What are they?

Aesthetic values are okay but not for us

We must preserve our aesthetic values and we will do our part.

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Workers

Work ethics Consists of the beliefs people have about their jobs

and about carrying them out.

Work valuesWork ethic in some degree is accepted by most workers. There are differences between the age groups.

Internal Environment

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Bibliography

Name Of The Book

Author Publication House

Date & Place of Publication

Organizational Culture

Andrew Brown Pitman Publications

Great Britain, 1995

Organization Management

Prof. Vinayshil Gautam

Class Notes New Delhi

Designing Effective Organizations

T. Elaine Gagne & David K. Banner

Sage Publications

U.S.A, 1995

Management Process & Organizational Behaviour

Amrik Singh Sudan & N.Kumar

Anmol Publications

New Delhi, 2003

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ThankThank YouYou

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