Subject Code: BA7101 PRINCIPLES OF MANAGEMENT UNIT – 1 Organisational Environment and Culture Dr. V. R/DoMS nal

General Environment The layer of the external environment that affects the organization indirectly. Dr. V. R/DoMS 3

General Environment Technological Task Environment International The layer of the external environment that directly influences the organization’s operations and performance. Sociocultural Legal/Political Economic Dr. V. R/DoMS 9

Organization’s Internal Environment General Environment Technological Task Environment International Customers Sociocultural Organization’s Internal Environment Labor Market Competition Employees Culture Management Suppliers Legal/Political Economic Dr. V. R/DoMS 14

The Organization-Environment Relationship Dr. V. R/DoMS

Three Strategies for Coping with High Uncertainty 1. Adapt the organization to the changes in the environment 2. Influence the environment to make it more compatible with organizational needs. 3. Moving from one environment to another (“Domain Shift”) Dr. V. R/DoMS 16

Adapting to the Environment Boundary-spanning roles link and coordinate the organization with key elements in the external environment Forecasting = spotting trends that enable managers to predict future events Flexible structure--- Organic (non-bureaucratic) structure Has few rules and regulations Decentralized Decision Making Dr. V. R/DoMS 17

Mergers and Joint Ventures Also Reduce Uncertainty Merger occurs when two or more organizations combine to become one Joint venture is a strategic alliance by two or more organizations. Dr. V. R/DoMS 20

Influencing the Environment Advertising Public relations Political activity Trade associations Dr. V. R/DoMS 21

Domain Shifts Acquisitions Divestures New Product Creation Old Product Discontinuance Geographical Moves Dr. V. R/DoMS

Corporate Culture Key values, beliefs, understandings, and norms shared by members of an organization. Dr. V. R/DoMS 22

Culture that can be seen at the surface level Visible Artifacts such as dress, office layout, symbols, slogans, ceremonies Invisible Expressed values such as “The Penney Idea,” “The H-P Way” Underlying assumptions and deep beliefs such as “people are lazy and can’t be trusted” Deeper values and shared understandings held by organization members. Dr. V. R/DoMS 27

Types of Cultures There are many classification systems, including those based on: Risk Tolerance Communication Patterns Types of Control Coordination Techniques Reward Systems Open-Systems Focus Dr. V. R/DoMS 33

Four Types of Corporate Cultures Dr. V. R/DoMS

Four Types of Corporate Cultures Fast-Changing External Environment Adaptability Culture Puts customers first, stressing innovation, risk taking, Little stress on people, teamwork Involvement Culture Emphasizes employee participation in determining changes in response to the environment Much stress on employee well-being, teamwork Dr. V. R/DoMS

Four Types of Corporate Cultures Stable External Environment Achievement Culture Puts customers first, stressing competition, hard work Consistency Culture Emphasizes following rules, being careful Dr. V. R/DoMS

High-Performance Culture Based on solid mission / clear agreed upon purpose Fast changing environment provides opportunities Has shared adaptive values Employee involvement encouraged (i.e., Balances needs of Customers and needs of Employees Dr. V. R/DoMS

Sources of Culture Founder Change Agents Experience National, Regional Culture Dr. V. R/DoMS

Why Change a Culture? To keep up with the competition To meet customer needs Your company is doing poorly Your company is growing rapidly Dr. V. R/DoMS

Maintaining/Changing Culture Cultural Leadership Communicate Reward Set Examples Dr. V. R/DoMS