Process Management OB3

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Chapter IIIChapter IIIOrganizational Culture and EnvironmentOrganizational Culture and Environment

A. Organizational cultureA. Organizational culture I. What is organizational culture?I. What is organizational culture?

1. Definition1. Definition2. Culture Assessment2. Culture Assessment

II. The source of cultureII. The source of cultureIII. Influence on management practiceIII. Influence on management practice

B. EnvironmentB. EnvironmentI. What is environment?I. What is environment?

1. General environment1. General environment2. Specific environment2. Specific environment3.Internal environment3.Internal environment

II. Influence on management practiceII. Influence on management practice


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Organizational Cultureand Environment

ORGANIZATIONAL CULTURE

What is an Organizational Culture ?

Definitions of Culture

The way things are done around here(M.Bower,1966).

The dominant values espoused by an

organization" (T.Deal & A. Kennedy, 1982).

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The philosophy that guides anorganization's policy toward employees andcustomers (R.Pascal & A.Athos, 1981).

The basic assumptions and beliefs that areshared by members of an organization"

(E.Schein, 1985) .

A system of shared meaning within an

organization that determines, in large degreehow employees act (Stephen P.Robbins, 1994).

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A Closer Look At What AnOrganizational Culture Means

Physical Aspects

Values and Beliefs

Patterns of Behavior

Attitudes andBehaviors

Purposes

Culture

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How to Assess an Org. Culture?

Member identityGroup emphasisUnit integrationControl

People focusRisk toleranceReward CriteriaConflict toleranceMeans-ends orientationOpen system focus

High Low

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The Sources of Culture

BasicAssumptions

Patterns of Behaviors

Values and Beliefs

Artifacts

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The founders biases and assumptions.The founders biases and assumptions.What first employees learn subsequentlyWhat first employees learn subsequently

from their own experience.from their own experience.Internalize value and belief Internalize value and belief

At this point others are brought intoAt this point others are brought into

organization, and a common historyorganization, and a common historybegins to be built.begins to be built.

The Sources of Culture


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Influence on Management Practice?

GoalsCULTURE CULTURE

ADMINISTRATION

Look busy, even if you are not.

Before you make a decision , run it

by your boss so that he or she is neversurprised .We make our product only as good as

the competition forces us to.

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ORGANIZATIONAL ENVIRONMENT

What is Environment ? Outsideinstitutions or forces that potentially affectan organization's performance.

What is Specific Environment ?The part of the environment that is directlyrelevant to the achievement of anorganization's goals.

What is General Environment ?Everything outside the organization.

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General environment

- Social culture

- Economy

-Politic-Legal

-Technology

Specific environment-suppliers

-Customers

- Competitors

-Creditors

-Government - pressure group

-Media

Internal environment-Employees

-Owners

-Board of directors

-Structure

- Resource

ExternalStakeholders

InternalInternalStakeholdersStakeholders- International

-Demographic


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The General EnvironmentThe General Environment

The GeneralThe GeneralEnvironmentEnvironment or or macromacroenvironmentenvironment includes sixincludes six

forces:forces:InternationalInternationalSocial cultureSocial cultureEconomicEconomic

Political-legalPolitical-legalTechnologicalTechnologicalDemographicDemographic


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The General EnvironmentThe General Environment

International ForcesInternational Forceschanges in the economic,changes in the economic,political, legal, andpolitical, legal, andtechnological global systemtechnological global systemthat may affect anthat may affect anorganizationorganization

Economic ForcesEconomic Forces consist of consist of general economic conditionsgeneral economic conditionsand trendsunemployment,and trendsunemployment,inflation, interest rates,inflation, interest rates,economic growththat mayeconomic growththat mayaffect an organizationsaffect an organizationsbalancebalance

Social culture ForcesSocial culture Forcesinfluences and trendsinfluences and trendsoriginating in a country,originating in a country,society, or cultures humansociety, or cultures humanrelationships and values thatrelationships and values thatmay affect and organizationmay affect and organization

Political-legal ForcesPolitical-legal Forces

changes in the waychanges in the waypolitics shape laws andpolitics shape laws andshape the opportunitiesshape the opportunitiesfor and threats to anfor and threats to anorganizationorganization

Technological ForcesTechnological Forces newnewdevelopments for developments for transforming resourcestransforming resourcesinto goods or servicesinto goods or services

Demographic ForcesDemographic Forcesinfluences on aninfluences on anorganization arisingorganization arisingfrom changes infrom changes incharacteristics of acharacteristics of apopulationage,populationage,gender or ethnic origingender or ethnic origin


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The Specific EnvironmentThe Specific EnvironmentThe Specific EnvironmentThe Specific Environment

consists of 11 groups that presentconsists of 11 groups that presentyou with daily tasks to handle:you with daily tasks to handle:SuppliersSuppliersCustomersCustomersCompetitorsCompetitorsCreditorsCreditorsGovernment regulatorsGovernment regulatorsDistributorsDistributorsPressure GroupPressure Group

Mass mediaMass mediaStrategic alliesStrategic alliesLocal communitiesLocal communitiesFinancial institutionsFinancial institutions

Special-interest groupsSpecial-interest groups


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The Specific EnvironmentThe Specific Environment

CustomersCustomers those who paythose who payto use an organizationsto use an organizationsgoods or servicesgoods or services

CompetitorsCompetitors people or people or organizations thatorganizations thatcompete for customers or compete for customers or resourcesresources

Distributor Distributor is a person or is a person or an organization that helpsan organization that helpsanother organization sellanother organization sellits goods and services toits goods and services tocustomerscustomers

Strategic AlliesStrategic Allies describedescribethe relationship of twothe relationship of twoorganizations who join forcesorganizations who join forcesto achieve advantagesto achieve advantagesneither can perform as wellneither can perform as well

alonealone

Pressure GroupPressure Groupunions and associationsas aunions and associationsas a

rule of thumb unionsrule of thumb unionsrepresent hourly workers,represent hourly workers,

associations tend toassociations tend torepresent salaried workersrepresent salaried workers


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The Specific EnvironmentThe Specific Environment

Local CommunitiesLocal Communitiesschools and municipalschools and municipalgovernments rely on thegovernments rely on theorganization for their taxorganization for their taxbasefamilies andbasefamilies andmerchants depend on themerchants depend on theorganization for its payroll for organization for its payroll for their livelihoodtheir livelihood

Financial InstitutionsFinancial Institutions entrepreneurs may rely onentrepreneurs may rely oncredit cards, establishedcredit cards, established

companies need loans andcompanies need loans andrely on lenders such asrely on lenders such ascommercial banks,commercial banks,investment banks, andinvestment banks, andinsurance companiesinsurance companies

Government RegulatorsGovernment Regulatorsregulatory agencies thatregulatory agencies thatestablish ground rules under establish ground rules under which organizations canwhich organizations canoperateoperate

Special Interest GroupsSpecial Interest Groupsgroups whose members trygroups whose members tryto influence specific issuesto influence specific issues

Mass MediaMass Media no manager no manager can afford to ignore thecan afford to ignore thepower of the mass mediapower of the mass mediamost organizations have amost organizations have apublic-relations person or public-relations person or department to communicatedepartment to communicateeffectively with the presseffectively with the press


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Internal Environment (Internal Environment ( StakeholdersStakeholders ))

A formal system of task and reporting relationshipsthat coordinates and motivates organizationalmembers so that they work together to achieveorganizational goals.

Structure

Its members are elected by stockholders to see thatthe company is being run according to their bestinterestsin nonprofit organizations, called board of trustees , or board of regents

Board of Directors

Asset such as eo le machiner raw materials

Owners of an organization consist of all those whocan claim it as their legal property

Owners

In many of todays forward looking organizations,employees are considered the talentthe mostimportant resource

Employees


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Influence on Management Practice?

SWOTSWOT Analysis (Michael Porter)Analysis (Michael Porter)

Opportunity ThreatsS trength Weakness

External EnvironmentalanalysisInternal Environment analysis

Documents

Process Management OB3