Management Organizational Culture & Environment PDF

Management Thirteenth Canadian Edition Chapter 2 Organizational Culture and the Organizational Environment Copyright © 2022 Pearson Canada Inc....

Management Thirteenth Canadian Edition Chapter 2 Organizational Culture and the Organizational Environment Copyright © 2022 Pearson Canada Inc. 2-1 Learning Outcomes 1. Contrast the actions of managers according to the omnipotent and symbolic views. 2. Discuss the characteristics and importance of organizational culture. 3. Describe the current issues in organizational culture. 4. Describe the features of the organizational environment. Copyright © 2022 Pearson Canada Inc. 2-2 The Manager: Omnipotent or Symbolic? (1 of 2) The Omnipotent View The view that managers are directly responsible for an organization’s success or failure. The performance of organizations is determined by its managers. Copyright © 2022 Pearson Canada Inc. 2-3 The Manager: Omnipotent or Symbolic? (2 of 2) The Symbolic View The ability of managers to affect outcomes is influenced and constrained by external factors: The economy, customers, governmental policies, competitors, industry conditions, proprietary technology, and the decision made by previous managers. Copyright © 2022 Pearson Canada Inc. 2-4 Exhibit 2.1 Parameters of Managerial Discretion Copyright © 2022 Pearson Canada Inc. 2-5 The Organization’s Culture (1 of 11) What Is Organizational Culture? A system of shared meaning and beliefs held by organizational members that determines, to a large degree, how they act towards each other and outsiders. “The way we do things around here” – Values, symbols, rituals, myths, & practices that have evolved over time. Copyright © 2022 Pearson Canada Inc. 2-6 The Organization’s Culture (2 of 11) Implications of an Organizational Culture Culture is a perception Culture is descriptive Culture is shared Copyright © 2022 Pearson Canada Inc. 2-7 Exhibit 2.2 Dimensions of Organizational Culture Copyright © 2022 Pearson Canada Inc. 2-8 Exhibit 2.3 Contrasting Organizational Cultures (1 of 2) Copyright © 2022 Pearson Canada Inc. 2-9 Exhibit 2.3 Contrasting Organizational Cultures (2 of 2) Copyright © 2022 Pearson Canada Inc. 2 - 10 The Organization’s Culture (3 of 11) Strong Cultures Key values are deeply held and widely shared. Have strong influence on organizational members. Copyright © 2022 Pearson Canada Inc. 2 - 11 The Organization’s Culture (4 of 11) Weak Cultures Some organizations do not make clear what is important and what is not, and this lack of clarity is a characteristic of weak cultures. In such organizations, culture is unlikely to greatly influence managers. Copyright © 2022 Pearson Canada Inc. 2 - 12 Exhibit 2.4 Strong versus Weak Cultures Strong Cultures Weak Cultures Values limited to a few people— Values widely shared usually top management Culture conveys consistent messages Culture sends contradictory messages about what’s important about what’s important Most employees can tell stories about Employees have little knowledge of company history or heroes company history or heroes Employees strongly identify with Employees have little identification culture with culture Strong connection between shared Little connection between shared values and behaviours values and behaviours Copyright © 2022 Pearson Canada Inc. 2 - 13 The Organization’s Culture (5 of 11) Advantages of strong cultures Employees are more loyal. Leads to high organizational performance. Disadvantages of strong cultures Prevent employees from trying new approaches, especially when conditions change rapidly. Copyright © 2022 Pearson Canada Inc. 2 - 14 The Organization’s Culture (6 of 11) Dominant culture System of shared meanings that expresses the core values of a majority of the organization’s members. It gives the organization its distinct personality. Copyright © 2022 Pearson Canada Inc. 2 - 15 The Organization’s Culture (7 of 11) Subcultures Organizations have dominant cultures and subcultures. Subcultures include the core values of the dominant culture, plus additional values unique to members of the subculture. Subcultures are likely to be defined by department designations and geographical separation. Copyright © 2022 Pearson Canada Inc. 2 - 16 The Organization’s Culture (8 of 11) Where culture comes from and how it continues Vision and mission of the organization’s founder. Is passed on and modified based on macro environmental factors. Copyright © 2022 Pearson Canada Inc. 2 - 17 The Organization’s Culture (9 of 11) How an organization’s culture is established and maintained Recruitment of employees who “fit” Actions of top management Socialization of new employees to help them adapt to the culture. Copyright © 2022 Pearson Canada Inc. 2 - 18 Exhibit 2.5 How an Organization’s Culture Is Established and Maintained Copyright © 2022 Pearson Canada Inc. 2 - 19 The Organization’s Culture (10 of 11) How Employees Learn Culture Stories: Narratives of significant events or actions of people that convey the spirit of the organization. Rituals: Repetitive sequences of activities that express and reinforce the values of the organization. Materials Artifacts and Symbols: Physical assets distinguishing the organization. Language: Acronyms and jargon of terms, phrases, and word meanings specific to an organization. Copyright © 2022 Pearson Canada Inc. 2 - 20 The Organization’s Culture (11 of 11) How Culture Affects Managers Whatever managerial actions the organization recognizes as proper or improper on its behalf. Whatever organizational activities the organization values and encourages. The overall strength or weakness of the organizational culture. Copyright © 2022 Pearson Canada Inc. 2 - 21 Current Issues in Organizational Culture (1 of 5) Creating an Innovative Culture Challenge and involvement Freedom Trust and openness Idea time Playfulness / humour Conflict resolution Debates Risk taking Copyright © 2022 Pearson Canada Inc. 2 - 22 Current Issues in Organizational Culture (2 of 5) Creating an Ethical Culture Context and strengths of organizational culture influences its ethical climate and ethical behavior of employees. Strong culture that supports ethical standards have a strong and positive effect on employees. Copyright © 2022 Pearson Canada Inc. 2 - 23 Current Issues in Organizational Culture (3 of 5) Characteristics of Customer-Responsive Culture Outgoing and friendly employees Few rigid rules, procedures and regulations Widespread use of empowerment Good listening skills Role clarity Employees attentive to customer needs Copyright © 2022 Pearson Canada Inc. 2 - 24 Current Issues in Organizational Culture (4 of 5) Creating a Culture That Supports Diversity Workforce Diversity: is the mix of people in organizations in terms of gender, race, ethnicity, age, and other characteristics that reflect differences. It contributes to more creative solutions and enhances employee morale. Copyright © 2022 Pearson Canada Inc. 2 - 25 Current Issues in Organizational Culture (5 of 5) Creating a Culture That Supports Sustainability Sustainability is a company’s ability to achieve its business goals and increase long-term shareholder value by integrating economic, environmental, and social opportunities into its business strategies. For many companies, sustainability is developed into the organization’s overall culture. Copyright © 2022 Pearson Canada Inc. 2 - 26 The Organizational Environment (1 of 7) External Environment The forces and institutions outside the organization that potentially can affect the organization’s performance. Copyright © 2022 Pearson Canada Inc. 2 - 27 Exhibit 2.6 Components of the External Environment Copyright © 2022 Pearson Canada Inc. 2 - 28 The Organizational Environment (2 of 7) Components of the External Environment Economic: factors such as interest rates, inflation, changes in disposable income, stock market fluctuations, and business cycle stages. Demographic: trends in population characteristics such as age, race, gender, education level, geographic location, income, and family composition. Political/legal component: federal, provincial, and local laws as well as global laws and laws of other countries. Copyright © 2022 Pearson Canada Inc. 2 - 29 The Organizational Environment (3 of 7) Components of the External Environment Sociocultural: societal and cultural factors such as values, attitudes, trends, traditions, lifestyles, beliefs, tastes, and patterns of behaviour. Technological: scientific or industrial innovations. Global: globalization and a world economy. Copyright © 2022 Pearson Canada Inc. 2 - 30 The Organizational Environment (4 of 7) How the external environment affects managers Knowing what the various components of the external environment are and examining certain aspects of that environment are important to managers. Understanding how the environment affects managers. Copyright © 2022 Pearson Canada Inc. 2 - 31 The Organizational Environment (5 of 7) How the external environment affects managers Impact on jobs and employment: changes in external conditions affect the types of jobs that are available, they affect how those jobs are created and managed. Copyright © 2022 Pearson Canada Inc. 2 - 32 The Organizational Environment (6 of 7) How the external environment affects managers Environmental uncertainty: degree of change and the degree of complexity in an organization’s environment. Environmental complexity: number of components in an organization’s environment and the extent of the organization’s knowledge about those components. Copyright © 2022 Pearson Canada Inc. 2 - 33 The Organizational Environment (7 of 7) How the external environment affects managers Stakeholder relationships: any constituencies in the organization’s external environment that are affected by the organization’s decisions and actions. Copyright © 2022 Pearson Canada Inc. 2 - 34 Exhibit 2.8 Organizational Stakeholders Copyright © 2022 Pearson Canada Inc. 2 - 35