Contemporary Management Concepts PDF

CONTEMPORARY MANAGEMENT CONCEPTS PART 3B THE ENVIRONMENT OF ORGANIZATIONS AND MANAGERS Part Outline The Organization’s Environments  The General Environment  The Task Environment  The Internal Environment The Organization’s Culture  The Importance of Organization Culture  Det...

CONTEMPORARY MANAGEMENT CONCEPTS PART 3B THE ENVIRONMENT OF ORGANIZATIONS AND MANAGERS Part Outline The Organization’s Environments  The General Environment  The Task Environment  The Internal Environment The Organization’s Culture  The Importance of Organization Culture  Determinants of Organization Culture  Managing Organization Culture Learning Objectives After studying this part, you should be able to:  Discuss the nature of the organizational environment and identify the components of the general, task, and internal environments.  Describe the importance and determinants of an organization’s culture. The Organization’s Environment External Environment  General environment is everything outside an organization’s boundaries—economic, legal, political, socio-cultural, international, and technical forces.  Task environment is composed of specific groups and organizations that effect the firm. Internal Environment  Conditions and forces within an organization. The Organization and Its Environments The External Environment The General Environment  The set of broad dimensions and forces in an organization’s surroundings that create its overall context.  Economic dimension is the overall health and vitality of the economic system in which the organization operates.  Technological dimension refers to the methods available for converting resources into products or services. The External Environment (cont’d) The General Environment (cont’d)  Sociocultural dimension includes the customs, mores, values, and demographic characteristics of the society in which the organization functions.  Political-legal dimension is the extent of government regulation of business and the general relationship between business and government.  International dimension is the extent to which the organization is affected by business in other countries. The External Environment (cont’d) The External Environment (cont’d) The Task Environment Specific groups affecting the organization  Competitors seeking the same resources as the organization.  Customers who acquire an organization’s products or resources.  Suppliers that provide resources for the organization.  Regulators (agencies and interest groups) that control, legislate, or influence the organization’s policies and practices.  Strategic partners (allies) who are in a joint venture or partnership with the organization. McDonald’s Task Environment The Internal Environment Conditions and stakeholder forces within an organization  Owners with legal property rights to a business.  Board of directors elected by the stockholders to oversee the general management of the firm to best serve the stockholders’ interest.  Employees who work for the firm and have a vested interest in its continued operation and existence.  Physical work environment of the organization and the work that people do. The Organization and Culture Organization Culture  The collection of values, beliefs, behaviors, customs, and attitudes that characterize a community of people. The Importance of Organization Culture  Culture determines the overall “feel” of the organization, although it may vary across different segments of the organization.  Culture is a powerful force that can shape the firm’s overall effectiveness and long-term success. The Organization’s Culture Determinants of Organization Culture  Organization’s founder (personal values and beliefs).  Symbols, stories, heroes, slogans, and ceremonies that embody and personify the spirit of the organization.  Corporate success that strengthens the culture.  Shared experiences that bond organizational members together. Organization Culture (cont’d) Managing Organization Culture  Understand the current culture to understand whether to maintain or change it.  Articulate the culture through slogans, ceremonies, and shared experiences.  Reward and promote people whose behaviors are consistent with desired cultural values. Organization Culture Changing Organization Culture  Develop a clear idea of what kind of culture you want to create.  Bring in outsiders to important managerial positions.  Adopt new slogans, stories, ceremonies, and purposely break with tradition. The Cultural Environment Language  In Japanese the word “hai” can mean either “yes” or “I understand.”  General Motors’ brand name “Nova” pronounced as “no va” in Spanish means “doesn’t go.” The Meaning of Colors  Green is popular in Muslim countries, yet it signifies death in other countries.  Pink is associated with feminine characteristics in the U.S.; yellow is the most feminine color in other countries. Individual differences across cultures The (Multi-) Cultural Environment The Increasing Diversity of the Workforce and the Environment  Diversity: differences among people due to age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background, education, physical appearance, capabilities, disabilities, and any other characteristic used to distinguish people. Age Gender Race and Ethnicity Religion Capabilities/disabilities Sexual Orientation Other Kinds Diversity Socioeconomic background How Organizations and Environments Interact How Environments Affect Organizations How organizations adopt to their environments Five-Forces Analysis (Porter)