1. ORGANIZATIONAL CULTURE AND ENVIRONMENT: THE CONSTRAINTS
Chapter 3
ORGANIZATIONAL
CULTURE AND
ENVIRONMENT:
THE CONSTRAINTS
© 2003 Pearson Education Canada Inc.
3.1 1

2. LEARNING OBJECTIVES You should be able to:
Differentiate the symbolic from the omnipotent view of management
Define organizational culture
Identify the seven dimensions that make up an organization’s culture
Explain how cultures can be strong or weak
Describe the various ways that employees learn culture
3.2 2

3. LEARNING OBJECTIVES (continued)
You should be able to:
Explain how culture constrains managers
Describe the various components in an organization’s specific and general environments
Contrast certain and uncertain environments
Identify the various stakeholders with whom managers have to deal
Clarify how managers manage relationships with external stakeholders
3.3 3

4. THE MANAGER: OMNIPOTENT OR SYMBOLIC?
Omnipotent View of Management
Managers are directly responsible for an organization’s success
Symbolic View of Management
The actual part that managers play in organizational success or failure is minimal
Managers must create meaning out of randomness, confusion, and ambiguity
Reality Suggests a Synthesis
Managers are neither helpless nor all powerful
3.4 4

5. © 2003 Pearson Education Canada Inc.
PARAMETERS OF MANAGERIAL
DISCRETION (Exhibit 3.1)
Managerial
Discretion
Organizational Culture
Organization’s Environment
© 2003 Pearson Education Canada Inc.
3.5 5

6. WHAT IS ORGANIZATIONAL CULTURE?
A system of shared meaning and beliefs held by organizational members that determines, in large degree, how they act
Composite picture of organizational culture may be derived from seven dimensions
Organization’s personality often shaped by one of these dimensions
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7. © 2003 Pearson Education Canada Inc.
DIMENSIONS OF ORGANIZATIONAL CULTURE (Exhibit 3.2)
© 2003 Pearson Education Canada Inc.
3.7 7

8. THE CULTURE OF AN ORGANIZATION
Strong Versus Weak Cultures
In strong cultures, key values are deeply held and widely shared
Strong cultures have greater influence on employees than do weak cultures
Employees more committed to organizations with strong cultures
Strong cultures are associated with high organizational performance
Most organizations have moderate to strong cultures
3.8

9. THE CULTURE OF AN ORGANIZATION (continued)
The Source of Culture
Usually reflects the vision or mission of the founder
How Employees Learn Culture
Stories - a narrative of significant events or people
Rituals - repetitive sequences of activities
Material symbols – essential in creating an organization’s personality.
Language - organizations develop unique jargon
3.9

10. THE CULTURE OF AN ORGANIZATION (continued)
How Culture Affects Managers
Establishes appropriate managerial behavior
Constrains decision making in all management functions
Planning - degree of risk that plans should contain
Organizing - degree of autonomy given to employees
Leading - degree of concern for job satisfaction
Controlling - reliance on external or internal controls
3.10

11. © 2003 Pearson Education Canada Inc.
THE EXTERNAL ENVIRONMENT
General
Environment
Suppliers
Customers
The
Organization
Public
Pressure
Groups
Competitors
Specific
Environment
3.11
© 2003 Pearson Education Canada Inc. 8

12. THE EXTERNAL ENVIRONMENT (continued)
Forces and institutions outside the organization that may affect organizational performance
Specific environment - includes those constituencies that have a direct and immediate impact on managers’ decisions and actions
customers - absorb organization’s outputs
suppliers - provide material and equipment
competitors - provide similar services/products
pressure groups - special-interest groups
3.12

13. THE EXTERNAL ENVIRONMENT (continued)
General environment - includes the broad conditions that may affect organizations
Economic conditions - interest rates, changes in disposable income, and stage of the business cycle
Political/legal conditions - federal, provincial, and local governments and general stability of Canada
3.13

14. THE EXTERNAL ENVIRONMENT (continued)
General environment (continued)
Socio-cultural conditions - expectations of society (values, customs and tastes)
Demographic conditions - trends in the physical characteristics of a population
Technological conditions - most rapidly changing aspect of the general environment
Global conditions - increasing number of global competitors and consumer markets
3.14

15. HOW THE ENVIRONMENT AFFECTS MANAGERS
Assessing environmental uncertainty
Degree of unpredictable change
dynamic - frequent change
stable - minimal change
Environmental complexity
the number of components in the environment
amount of information available or required about those components
Managers attempt to minimize uncertainty
3.15

16. ENVIRONMENTAL UNCERTAINTY (Exhibit 3.6)
3.16

17. STAKEHOLDER RELATIONSHIP MANAGEMENT
Who are stakeholders?
Any constituencies that are affected by the organization’s decisions and actions
include internal and external groups
can influence the organization
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18. ORGANIZATIONAL STAKEHOLDERS (Exhibit 3.7)
3.18

19. STAKEHOLDER RELATIONSHIP MANAGEMENT (continued)
Why is stakeholder relationship management important?
The more secure the relationship, the more influence managers will have over organizational outcomes
It’s the “right” thing to do
3.19

20. STAKEHOLDER RELATIONSHIP MANAGEMENT (continued)
How can these relationships be managed?
Four steps
identify the stakeholders
determine real and potential concerns of each stakeholder group
determine whether stakeholder is critical
determine specific approach to manage the relationship
Approach to a stakeholder group based on the importance of the group and the degree of environmental uncertainty
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21. MANAGING STAKEHOLDER RELATIONSHIPS (Exhibit 3.8)
3.21

22. STAKEHOLDER RELATIONSHIP MANAGEMENT (continued)
Boundary spanning
Important stakeholder and environmental uncertainty
Interacting to gather and disseminate information
Stakeholder partnerships
Stakeholder is critical and environmental uncertainty is high
Pursue common goal
3.22