PowerPoint Presentation to Accompany Management, 9/e John R. Schermerhorn, Jr. Prepared by: Jim LoPresti University of Colorado, Boulder Published by: John Wiley & Sons, Inc. Chapter 4: Environment and Organizational Culture

Management 9/e - Chapter 42 Study Question 1: What is the external environment of organizations?  Competitive advantage is a core competency that clearly sets an organization apart from competitors and gives it an advantage over them in the marketplace.

Management 9/e - Chapter 43 Study Question 1: What is the external environment of organizations?  Companies may achieve competitive advantage in many ways, including:  Products  Pricing  Customer service  Cost efficiency  Quality

Management 9/e - Chapter 44 Study Question 1: What is the external environment of organizations?  The general environment — all of the background conditions in the external environment of the organization including: Economic Socio-cultural Legal-political Technological Natural environment

Management 9/e - Chapter 45 Study Question 1: What is the external environment of organizations?  The specific (task) environment — actual organizations, groups, and persons with whom an organization interacts and conducts business.  Includes important stakeholders such as: Customers Suppliers Competitors Regulators Investors/owners

Management 9/e - Chapter 46 Figure 4.1 Stakeholder analysis of value creation for key constituencies of a business firm: an open-systems approach.

Management 9/e - Chapter 47 Study Question 1: What is the external environment of organizations?  Environmental uncertainty is a lack of complete information regarding what exists and what developments may occur in the external environment.  Two dimensions of environmental uncertainty: Complexity Rate of change

Management 9/e - Chapter 48 Study Question 2: What is a customer-driven organization?  External customers purchase the organization’s goods or utilize its services.  Internal customers are the persons and groups within an organization who depend on the results of others' work to do their own jobs.

Management 9/e - Chapter 49 Study Question 2: What is a customer-driven organization?  Customers want: High quality. Low price. On-time delivery.  Key customer service lessons: Protect reputation for quality products. Treat customers right.

Management 9/e - Chapter 410 Study Question 2: What is a customer-driven organization?  Customer relationship management establishes and maintains high standards of customer service in order to strategically build lasting relationships with and add value to customers.  Supply chain management is the strategic management of all operations relating to an organization’s resource suppliers.

Management 9/e - Chapter 411 Study Question 3: What is organizational culture?  Organizational culture is the system of shared beliefs and values that develops within an organization and guides the behavior of its members.

Management 9/e - Chapter 412 Study Question 3: What is organizational culture?  What is observable culture? What one sees and hears when walking around an organization.  Elements of observable culture: Stories Heroes Rites and rituals Symbols

Management 9/e - Chapter 413 Study Question 3: What is organizational culture?  What is the core culture? Underlying assumptions and beliefs that influence behavior and contribute to the observable culture.  Core culture and values: Strong cultures have a small but enduring set of core values. Commitment to core values is a key to long-term success.

Management 9/e - Chapter 414 Study Question 3: What is organizational culture?  Important cultural values include: Performance excellence Innovation Social responsibility Integrity Worker involvement Customer service Teamwork

Management 9/e - Chapter 415 Study Question 4: How is diversity managed in a multicultural organization?  Diversity: Describes differences among people at work. How diversity is handled in the workplace reflects the organization’s culture.  Respect and inclusion.  Disrespect and exclusion. A potential source of competitive advantage.

Management 9/e - Chapter 416 Study Question 4: How is diversity managed in a multicultural organization?  Diversity trends in the sociocultural environment: People of colors are an increasing percentage of the workforce. More women are working. People with disabilities are gaining more access to the workplace. Average age of workers is increasing. Religious diversity of workers is increasing.

Management 9/e - Chapter 417 Study Question 4: How is diversity managed in a multicultural organization?  Characteristics of multicultural organizations: Pluralism Structural integration Informal network integration Absence of prejudice and discrimination Minimum intergroup conflict

Management 9/e - Chapter 418 Study Question 4: How is diversity managed in a multicultural organization?  Organizational subcultures Cultures based on shared work responsibilities and/or personal characteristics. Ethnocentrism is the belief that one’s subculture is superior to all others  Common subcultures include: Occupational Functional Ethnic or national Racial Generational Gender

Management 9/e - Chapter 419 Study Question 4: How is diversity managed in a multicultural organization?  Challenges faced by minorities and women: Glass ceiling Misunderstanding and lack of sensitivity Sexual harassment Pay discrimination Job discrimination  Minorities may adapt by exhibiting biculturalism.

Management 9/e - Chapter 420 Figure 4.3 Glass ceilings as barriers to women and minority cultures in traditional organizations.

Management 9/e - Chapter 421 Study Question 4: How is diversity managed in a multicultural organization?  Diversity leadership approaches: Managing diversity commits to changing the organizational culture. Affirmative action commits the organization to hiring and advancing minorities and women. Valuing diversity commits the organization to education and training programs.

Management 9/e - Chapter 422 Figure 4.4 Leadership approaches to diversity—from affirmative action to managing diversity. Source: Developed from R. Roosevelt Thomas, Jr., Beyond Race and Gender (New York: AMACOM, 1991), p. 28.