Engineering Management Chapter 2: Understanding Management's Context PDF

Engineering Management Chapter 2: Understanding Management’s Context: Constraints and Challenges Engr. Pamela E. Ambrocio, CLSSGB, MSME  Learning Objective After this lesson, the student will now be able to: Contrast the actions of managers according to the omnipotent a...

Engineering Management Chapter 2: Understanding Management’s Context: Constraints and Challenges Engr. Pamela E. Ambrocio, CLSSGB, MSME  Learning Objective After this lesson, the student will now be able to: Contrast the actions of managers according to the omnipotent and symbolic views Describe the constraints and challenges facing managers in today’s external environment. Discuss the characteristics and importance of organizational culture. Describe current issues in organizational culture.  Topic Outline Topic 2.1 The Omnipotent and Symbolic Views Topic 2.2 The Constraints and Challenges of Organizations Topic 2.3 The Current Issues in Organization Culture The Omnipotent and Symbolic Views  Omnipotent and Symbolic Views How much difference does a manager make in how an organization performs? The dominant view in management theory and society in general is that managers are directly responsible for an organization’s success or failure. We call this perspective the omnipotent view of management. In contrast, others have argued that much of an organization’s success or failure is due to external forces outside managers’ control. This perspective is called the symbolic view of management. This view of managers as omnipotent is consistent with the stereotypical picture of the take-charge business executive who overcomes any obstacle in seeing that the organization achieves its goals. And this view isn’t limited to business organizations.  Omnipotent and Symbolic Views The symbolic view says that a manager’s ability to affect performance outcomes is influenced and constrained by external factors. According to this view, it’s unreasonable to expect managers to significantly affect an organization’s performance. Instead, performance is influenced by factors over which managers have little control such as the economy, customers, governmental policies, competitors’ actions, industry conditions, and decisions made by previous managers. This view is labeled “symbolic” because it’s based on the belief that managers symbolize control and influence. How do they do that? By developing plans, making decisions, and engaging in other managerial activities to make sense out of random, confusing, and ambiguous situations. However, the actual part that managers play in organizational success or failure is limited according to this view. The Constraints and Challenges of Organizations Constraints and Challenges  Constraints and Challenges The term external environment refers to factors and forces outside the organization that affect its performance. It includes several different components.  Constraints and Challenges The economic crisis—called the “Great Recession” by some analysts began with turmoil in home mortgage markets in the United States when many homeowners found themselves unable to make their payments. The problems soon affected businesses as credit markets collapsed. All of a sudden, credit was no longer readily available to fund business activities. It didn’t take long for these economic troubles to spread worldwide. Even as global economies began the slow process of recovery, most experts believed that the economic environment facing managers and organizations would not be as it was and would continue to constrain organizational decisions and actions.  External Environment Affects Managers Jobs And Employment As any or all external environmental conditions (economic, demographic, technological, globalization, etc.) change, one of the most powerful constraints managers face is the impact of such changes on jobs and employment—both in poor conditions and in good conditions. The power of this constraint became painfully obvious during the recent global recession as millions of jobs were eliminated and unem- ployment rates rose to levels not seen in many years. Assessing Environmental Uncertainty Another constraint posed by external environments is the amount of uncertainty found in that environment, which can affect organizational outcomes. Environmental uncertainty refers to the degree of change and complexity in an organization’s environment.  External Environment Affects Managers The other dimension of uncertainty describes the degree of environmental complexity, which looks at the number of components in an organization’s environment and the extent of the knowledge that the organization has about those components. An organization with fewer competitors, customers, suppliers, government agencies, and so forth faces a less complex and uncertain environment.  External Environment Affects Managers Managing Stakeholder Relationships, The nature of stakeholder relationships is another way in which the environment influences managers. The more obvious and secure these relationships, the more influence managers will have over organizational outcomes. Stakeholders are any constituencies in the organization’s environment that are affected by an organization’s decisions and actions. These groups have a stake in or are significantly influenced by what the organization does.  Organizational Culture: Constraints and Challenges Organizational culture has been described as the shared values, principles, traditions, and ways of doing things that influence the way organizational members act. In most organizations, these shared values and practices have evolved over time and determine, to a large extent, how “things are done around here”. Research suggests seven dimensions that can be used to describe an organization’s culture. These dimensions range from low to high, meaning it’s not very typical of the culture (low) or is very typical of the culture (high). Describing an organization using these seven dimensions gives a composite picture of the organization’s culture. In many organizations, one cultural dimension often is emphasized more than the others and essentially shapes the organization’s personality and the way organizational members work.  Organizational Culture: Constraints and Challenges Dimension of Organizational Culture  Organizational Culture: Constraints and Challenges All organizations have cultures, but not all cultures equally influence employees’ behaviors and actions. Strong cultures—those in which the key values are deeply held and widely shared—have a greater influence on employees than do weaker cultures.  Organizational Culture: Constraints and Challenges Where Culture Comes From and How It Continues  Organizational Culture: Constraints and Challenges Where Culture Comes From and How It Continues The original source of the culture usually reflects the vision of the founders Company founders are not constrained by previous customs or approaches and can establish the early culture by articulating a vision of what they want the organization to be. Also, the small size of most new organizations makes it easier to instill that vision with all organizational members. Finally, organizations help employees adapt to the culture through socialization, a process that helps new employees learn the organization’s way of doing things.  Organizational Culture: Constraints and Challenges How Culture Affects Managers a manager’s decisions are influenced by the culture in which he or she operates. An organization’s culture, especially a strong one, influences and constrains the way managers plan, organize, lead, and control.  Current Issues in Organizational Culture Three current cultural issues: creating an innovative culture, creating a customer-responsive culture, and nurturing workplace spirituality. Creating an Innovative Culture How important is culture to innovation? In a recent survey of senior executives, over half said that the most important driver of innovation for companies was a supportive corporate culture. What does an innovative culture look like? According to Swedish researcher Goran Ekvall, it would be characterized by the following: Challenge and involvement – Are employees involved in, motivated by, and commit- ted to long-term goals and success of the organization? Freedom – Can employees independently define their work, exercise discretion, and take initiative in their day-to-day activities?  Current Issues in Organizational Culture Trust and openness – Are employees supportive and respectful to each other? Idea time – Do individuals have time to elaborate on new ideas before taking action? Playfulness/humor – Is the workplace spontaneous and fun? Conflict resolution – Do individuals make decisions and resolve issues based on the good of the organization versus personal interest? Debates – Are employees allowed to express opinions and put forth ideas for consideration and review? Risk-taking – Do managers tolerate uncertainty and ambiguity, and are employees rewarded for taking risks  Current Issues in Organizational Culture Creating a Customer-Responsive Culture  Current Issues in Organizational Culture Spirituality and Organizational Culture What is workplace spirituality? It’s a culture in which organizational values promote a sense of purpose through meaningful work taking place in the context of community. Organizations with a spiritual culture recognize that people have a mind and a spirit, seek to find meaning and purpose in their work, and desire to connect with other human beings and be part of a community. And such desires aren’t limited to workplaces, as a recent study showed that college students also are searching for meaning and purpose in life.  Current Issues in Organizational Culture Research shows that spiritual organizations tend to have five cultural characteristics. Strong sense of purpose Focus on individual development Trust and openness Employee empowerment Toleration of employee expression -The End-