CHAPTER 3

ORGANIZATIONAL CULTURE
AND THE ENVIRONMENT
THE CONSTRAINTS

Learning Outline
The Manager: Omnipotent or Symbolic
The Organizations Culture
Current Organizational Culture Issues
Facing Managers
The Environment

OMNIPOTENT VIEW OF
MANAGERS

The managers are directly

responsible for an organizations
success or failure.
It is assumed that the differences in
the organizations effectiveness and
efficiency is due to the decisions
and actions of the managers.

OMNIPOTENT VIEW OF MANAGERS

(Contd)
Good managers lead the organizations
towards goals. When the profit are up, the
managers take credit and reward
themselves with bonuses and stock
options.
When the performance is down there
should be some one who should be held
responsible and accountable regardless of
the reasons.

THE SYMBOLIC VIEW

That the managers have only a limited
effect on substantive organizational
outcomes because of the large number
of factors outside their controls.
These factors are economy, customers,
government policies, competitors
actions, industry conditions and
decisions made by the previous
managers.
According to this view managers
symbolize control and influence.

THE SYMBOLIC VIEW (Contd)

They create meanings out of ambiguity
and confusion and try to adapt and
innovate.
A managers action involves
developing plans, making decisions
and engaging in other managerial
activities which they do for the benefit
for the stake holders.

REALITY SUGGESTS SYNTHESIS

In reality managers are neither helpless
nor all powerful.

Organizational
Environment

Managerial
Discretions

Organizational
culture

THE ORGANIZATIONS CULTURE

Every person has a unique personality (a set
of relatively permanent and stable traits that
influence the way we act and interact with
others). When we describe someone as
warm, open, shy or aggressive, we are
describing personality traits. An
organization, too, has a personality, which
we call its culture.
It is a system of shared meaning and beliefs
held by organizational members that
determines, in large degree, how employees
act.

THE DEFINATION OF CULTURE

EMPLOYS THREE THINGS
PERCEPTION: The individuals perceive the
culture of the organization on the basis of what
they see, hear or experience.
THE SHARED ASPECT: The individuals may be
having different back grounds or working at
different levels they tend to describe the
organization culture in similar terms.
DESCRIPTIVE TERM: It describes rather
evaluate. It is concerned how the members
perceive the organization culture not whether
they like it.

DIMENSIONS OF ORGANIZATION
CULTURE
ATTENTION TO DETAIL: Degree to which
employees are expected to exhibit precision,
analysis, and attention to detail.

INNOVATION AND RISK TAKING: The

degree to which employees are encouraged to
be innovative and take risks.

STABILITY: The degree to which organization

decision emphasize maintaining the status quo.

DIMENSIONS OF ORGANIZATION
CULTURE
AGGRESSIVENESS: the degree to which the
employees are competitive rather than
cooperative.
TEAM ORIENTATION: The degree to which the
work is organized toward team rather
individuals.
PEOPLE ORIENTATION: The degree to which
management decisions take into account the
effects on people in the organization.
OUTCOME ORIENTATION: Degree to which
managers focus on results or outcomes
rather than on how these outcomes are
achieved.

STRONG VERSUS WEAK CULTURES

STRONG CULTURE: The culture where key

values are intensively held and widely

shared.
Although all organizations have culture,
not all cultures have an equal impact on
employees behaviors and actions.
The more employees accept the
organizations key value and the greater
their commitment to those values, the
stronger the culture is.

STRONG VERSUS WEAK CULTURES.

(Contd)
Strong culture enhances performances.
When values are clear and widely
accepted, employees clearly know what
is expected of them so that they can act
quickly to take care of problems.
How ever one draw back of strong
culture is that it prevent employees
using new approaches.

THE SOURCE OF CULTURE.

An organizations current customs, traditions
and general way of doing things are largely
due to what it has done before and the
degree of success it has had with those
endeavors.
The original source of culture usually reflects
the vision or mission of organizations
founders.
The founders establish the early culture by
projecting an image of what the organization
should be.

HOW AN ORGANIZATIONS CULTURE

CONTINUES
Once a culture is in place, certain
organizational practices help maintain it.
The actions of top executives also have a
major impact on the organizations culture.
The top managers set the norms that filter
down through the organization. This can
have positive effect on the employee on
giving the excellent customer service.

HOW AN ORGANIZATIONS CULTURE

CONTINUES (Contd)
SOCIALIZATION: The process that
adapts employees to the organizations
culture. Through the socialization process
the employees learn the organizations
way of doing things.

HOW AN ORGANIZATIONS CULTURE

IS ESTABLISHED AND MAINTAINED

TOP
MANAGEMENT
PHILOSOPHYOF
ORGANIZATIONS
FOUNDERS

SELECTION
CRITERIA

ORGANIZATION
CULTURE
SOCIALIZATION

HOW EMPLOYEES LEARN

CULTURES
CULTURE IS TRANSMITTED IN THE
EMPLOYEES USING FOLLOWING WAYS
1. STORIES
2. RITUALS
3. MATERIAL SYMBOLS
4. LANGUAGES

HOW EMPLOYEES LEARN

CULTURE(CONTINUED)
STORIES: To help employees learn the
culture, organizational stories anchor the
present in the past, provide explanations
and legitimacy for current practices, and
exemplify what is important to the
organization.
RITUALS: Set of actions performed on
certain occasions. These are sequence of
activities which express the importance of
values, goals and people.

HOW EMPLOYEES LEARN

CULTURE(CONTINUED)
MATERIAL SYMBOLS: A feel of formal, casual,
fun, serious and so forth regarding a business or
organization demonstrate the power of material
symbol. The layout of facilities, elegance of
furnishing, luxury cars provided to the
executives, dress of employees are example of
material symbols.
LANGUAGE: Many organization and units within
organizations use language as a way to identify
members of a culture. By using this language
members attest to their acceptance of the
culture and their willingness to help preserve it.

HOW CULTURE AFFECTS THE

MANAGER
An organization culture, especially a

1
2
3

strong one, constrains a managers

decision making option in all
management functions.
PLANNING:
The degree of risk in planning.
Whether plans should be developed by
individuals or in teams.
The degree of engagement of
management in environment scanning.

HOW CULTURE AFFECTS THE

MANAGER (Continued)
ORGANIZING
1.
2.
3.

The degree of autonomy in employees jobs.

Whether tasks should be done by individuals or in
teams.
The degree of interaction among department
managers.

LEADING
1.
2.
3.

Degree of concern among managers regarding

increasing the employees job satisfaction.
Decision about leadership style.
What decisions to be taken about disagreement.

HOW CULTURE AFFECTS THE

MANAGER (Continued)
CONTROLLING
1. Whether to impose external controls or
allow employees to control their own
actions.
2. Decisions about criteria on employees
performance evaluation.
3. What effects will occur from exceeding
ones budget.

CURRENT ORGANZATIONAL CULTURE

ISSUES FACING MANAGERS
CREATING AN ETHICAL CULTURE: If a
culture is strong and supports high ethical
standards, it should have a positive
influence of employees behavior
CREATING AND INNOVATIVE CULTURE: The
organizations culture should support the
creativity and new ideas. Involvement,
creativity, communication and diversity are
key to innovative culture.

CURRENT ORGANZATIONAL CULTURE

ISSUES FACING MANAGERS (CONTINUED)

1.
2.
3.
4.
5.
6.

CREATING A CUSTOMER RESPONSIVE CULTURE

A customer responsive culture carries 6
characteristics.
Employees (Friendly, outgoing, polite and courteous).
Few rigid rules, procedures and regulations.
Wide spread empowerment.
Good listening skills. Employees should have the
ability to listen and understand the messages sent by
the customers.
Role clarity. The employee should be certain about his
or her role and the best way to perform the job.
Employees are Conscientious in their desire to serve
the customer.

SPIRITUALITY AND ORGANIZATIONAL

CULTURE
Organization that promotes work place
spirituality recognize that people have a mind
and a spirit and they seek the meaning and
purpose in their work and desire to connect with
others and become a part of community.
WORK PLACE SPIRITUALITY: A recognition
that people have an inner life that nourishes and
is nourished by meaningful work that takes place
in the context of community.

CHARACTERSTICS OF SPIRITUAL
CULTURE IN ORGANIZATIONS
Strong sense of purpose.
Focus on individual development.
Trust and Openness.
Employee empowerment.
Tolerance of employees expressions.

ENVIRONMENT
There are various forces in the environment which
shape the managers actions. We will identify the
critical environmental forces which affect
managerial decisions and constrain the managerial
discretions.

EXTERNAL ENVIRONMENT: refers to forces

and institutions outside the organization that
potentially can affect the organizations
performance. The external environment
consists of two components
1. THE SPECIFIC ENVIRONMENT
2. GENERAL ENVIRONMENT

The Specific Environment

That part of external environment that is
directly relevant to the achievement of an
organizational goals. These are
1. CUSTOMERS
2. SUPPLIERS
3. PUBLIC PRESSURE GROUPS
4. COMETITORS

SPECIFIC ENVIRONMENT (Contd)

CUSTOMERS: They possess most strong
uncertainty for the organization. Their tastes can
be changed or they can become dissatisfied with
the organizations products. An organizations
success depends upon the proper response to
customers changing demand.
SUPPLIERS: Organizations suppliers are those who

supply material, equipment, financial and labor inputs.

Manager seek a steady flow of needed inputs at the lowest
price. If these inputs are delayed, this can significantly
reduce the organizations effectiveness. The
organizations are using e-business techniques to
ensure that it has the right material at right time and right
place. This can help manager to reduce uncertainty but
they really dont eliminate it.

SPECIFIC ENVIRONMENT (Contd)

COMPETITORS: All organizations have one or
more competitors. Managers can not ignore
competition, when they ignore they suffer.
Competitors, in terms of pricing, new products
developed, services offered, and the like, represent
an environmental force that managers must monitor
and to which they must be ready to response.
PRESSURE GROUPS: Managers must recognize
the special-interest groups that attempt to influence
the actions of organizations. A social and political
attitudes change so too does the power of pressure
groups.

The General Environment

Broad external conditions that may affect
the organizations
1. ECONOMIC
2. POLITICAL
3. SOCIO CULTURAL CONDITIONS
4. DEMOGRAPHIC CONDITIONS
5. TECHNOLOGICAL CONDITIONS
6. GLOBAL

The General Environment (continued)

ECONOMIC CONDITIONS: Interest rates, inflation,

changes in disposable income, stock market

fluctuations and the stage of general business
cycle are some of the economic factors which can
affect the management practices in an
organization.
POLITICAL/LEGAL CONDITIONS: Federal,
Provincial, Local Governments influence what
organizations can or can not do. Organizations
spend lot of money and time to meet the
governmental regulations. They limit the
managerial discretions by reducing choices
(Employees hiring and firing, environmental
regulations). Other aspects are general stability
and political conditions.

The General Environment (continued)

SOCIOCULTURAL CONDITIONS: Managers
must adapt their practices to the changing
expectations of the society in which they
operate. As social values customs, and tastes
change, managers also must change.
DEMOGRAPHIC CONDITIONS: The
demographic conditions encompass trends in
the physical characteristics of a population such
as gender, age, level of education, geographic
location, income, family compositions and so
forth. Changes in conditions may constrain how
managers manage.

The General Environment (continued)

TECHNOLOGICAL: We live in the time of continuous
technological change. The companies (eBay, Amazon,
G.Electric, Google, wall mart) which capitalize

technology, prosper. They use information

systems to remain on top of current sales trends
and some use information as competitive
advantage (Amazon.com).
GLOBAL: The globalization is one of the major
factors affecting managers and organizations.
Manager of both large and small organizations
are challenged by an increasing number of global
competitors and markets as part of external
environment.

HOW ENVIRONMENT AFFECTS

MANAGERS
The environment affects managers
through
1. the degree of environment uncertainty
that is present.
2. and through the various stakeholder
relationships that exist between the
organization and its external
constituencies.

ASSESSING ENVIRONMENTAL
UNCERTAINTY
All environment are not the same. They differ by what
we call their degree of environmental uncertainty
which is degree of change and degree of complexity
in an organizations environment.
There are two dimensions in this definition

1. DEGREE OF CHANGE: If components of

environment change frequently we call it dynamic, if

change is minimal, it is stable.

2. DEGREE OF COMPLEXITY: The number of

components in organizations environment and the
extent of its knowledge about the components.

MANAGING STAKE HOLDERS

RELATIONSHIPS
Any constituencies in organizations external
environment that are affected by the
organizations decisions and actions.
Managing the stake holders relationship is
important as it can improve predictability about
environmental change.
Successful organizations always tend to
consider the interests of all major stakeholder
groups as they make decisions.

Type of STAKE HOLDERS an

organization may have
CUSTOMERS

EMPLOYEES

SOCIAL AND POLITICAL

ACTION GROUPS

UNIONS

SHARE HOLDERS

ORGANIZATION

COMPETITORS
TRADE AND INDUSTRY
ASSOCIATIONS

COMMUNITIES

GOVERNMENT

SUPPLIERS
MEDIA