organizational culture & environments

Organizational

Culture& Environments

Future Future ExecutivesExecutives

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Leader”Leader” Layon Ivan Patrick LoboLayon Ivan Patrick Lobo 60786078

ContentContent Why is it important to know about organization culture?

What is organizational culture?

Kinds of organizational culture.

Different role of Manager’s in different organizational cultures.

How Cultures effect Managers?

What is Organizational environment?

How Environment’s influence managers?

Case Study

QuotationQuotation

“The conventional definition of management is getting work done through people, but real management is developing people through work”

Agha Hasan Abedi Founder Bank of Credit and Commerce International Luxembourg

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Why is it Important to know about Why is it Important to know about organization culture?organization culture?

Vision and Mission are the benchmark for any organization’s culture.

To learn how different tasks are performed in an organization.

Customs

Traditions

Ways of working

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Organizational CultureOrganizational Culture

The cognitive framework of

Attitudes Values Behavioral norms Expectations

Key is that they are shared by organizational members

Aspects of Organization Aspects of Organization CultureCulture

Achievement Self actualizing Humanistic Approval Conventional

Avoidance Power Competitive Oppositional

Organizational Culture Organizational Culture ProvidesProvides

A sense of identity for group members

Commitment to the mission of the organization

Clarifies and reinforces standards of behavior

Culture usually takes 5-10 years to develop

How is organizational How is organizational culture transmitted?culture transmitted? Symbols (buildings, lobby, decorations, etc.)

Stories that get passed on

Ceremonies (holiday parties, awards)

Statements of principles

Policies

Reward structure

How do they create this How do they create this culture?culture? Values = people, play and profit

They have a playroom as a corner office

Physical environment

Polaroid pictures and graffiti on the walls Drumming to announce meetings Use magazines to generate ideas Bring toys to work

Is organizational culture Is organizational culture important..?important..?

Research shows there is not one best culture, but it is important to have a strong culture

A culture that supports affiliation among co-workers, flexibility, and encourages supervisor support has been linked to positive outcomes

Important to have a fit between the person and the org culture (increases satisfaction and commitment)

What does organization What does organization culture..?culture..?

Helps to distinguish an org from other orgs and its general environment by providing it with an external identity

Sense of commitment to social entity greater than one’s self interest

Is a source of high reliability in organizations

Provides members with interpretive scheme or way to make sense of positions and activities

Culture is a social control mechanism

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QuotationQuotation

“There is less to fear from outside ompetition than from inside inefficiency, discourtesy and bad service”

Anonymous

What is organizational What is organizational culture.?culture.?

“Shared values, principles, traditions & ways of doing things that influence the way organizational members act.”

“Stephen P.Robbins & Mary Coulter”

Definition Definition

ContinuedContinued….….

“Culture is the soul of the organization- the beliefs and values , and how they are manifested. I think of the structure as the skeleton, and as the flesh and blood. And culture is the soul that holds the thing together and gives it life force.”

““Henry Henry Mintzberg”Mintzberg”

The Organization's The Organization's CultureCulture

Culture is perception

Individuals perceive the organizational culture on thebasis of what they see, hear or experience within org.

Culture is shared

People with different social, organizational &educational background, they describeorganizational culture in similar terms.

Culture is descriptive

How members perceive theOrganization. Not with whether they Like it.

Strong Versus Weak Strong Versus Weak CulturesCultures Strong Cultures

Are cultures in which key values are deeply held and widely held. Have a strong influence on organizational members.

Factors Influencing the Strength of Culture

Size of the organization Age of the organization Rate of the employee turnover Strength of cultural values and beliefs

Benefit of a strong culture

Creates a stronger employee commitment to the organization. Aids in the recruitment and socialization of new employees. Fosters higher organizational performance by instilling and

promoting employee initiative.

Strong versus Weak Strong versus Weak Organizational CulturesOrganizational Cultures

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QuotationQuotation

“Coming together is a beginning. Keeping together is progress. Working together is success”

Henry Ford

The Manager’s RoleOmnipotent View of

Management

Managers are directly responsible for an organization’s success of failure

The quality of the organization is determined by the quality of its Managers.

Managers are held most accountable for an organization’s performance directly due to their influence on the organization.

Manager’s Role Manager’s Role Continued…Continued…

Symbolic View Of Management

Managers are not directly responsible for an organization’s success or failure.

Organizational success or failure is due to external forces outside the managers control (e.g. Natural Disasters, Earthquake etc)

The symbolic view is based on the belief that managers symbolize control and influence business.

Managers play a minimal part in success or failure of any organization.

Parameters of Parameters of Managerial Managerial DiscretionDiscretion

Successful Successful Organizational CultureOrganizational Culture

Levels Of Corporate Culture

Corporative Culturewww-Corporate Culture Evolution.WMV

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QuotationQuotation

“There is a simple rule about the environment. If there is waste or pollution, someone along the line pays for it”

Lee Scott, Chief Executive, Wal-Mart

Dimensions Of Dimensions Of Organizational CultureOrganizational Culture

Sources Of Organizational CultureSources Of Organizational Culture

The organization’s founder Vision and mission

Past practices of the organization The way things have been done

The behavior of top management

Continuation of the Organizational Continuation of the Organizational CultureCulture

Recruitment of like-minded employees who “fit” Socialization of new employees to help them adapt

to the culture

How an Organization’s Culture is How an Organization’s Culture is Established and MaintainedEstablished and Maintained

How Employees Learn How Employees Learn Culture?Culture?

Stories

Narratives of significant events or actions of people that convey the spirit of the organization

Material Symbols

Physical assets distinguishing the organization

Language

Acronyms and jargon of terms, phrases and word meanings specific to an organization

How Culture Affects How Culture Affects Managers?Managers?

Cultural Constraints on 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 of weakness of the organizational culture

Simple rule for getting ahead in an organization:Find out what the organization rewards and do those things.

Managerial Decisions Affected Managerial Decisions Affected by Characterby Character

Planning

The degree of risk that plans should contain

Whether plans should be developed by individuals or teams

The degree of environmental scanning in which management will engage

Organizing How much autonomy should be designed into employee’s jobs

Whether tasks should be done by individuals or in teams

The degree to which department managers interact with each other

Leading

The degree to which managers are concerned with increasing employee job satisfaction

What leadership styles are appropriate

Whether all disagreements-even constructive ones-should be eliminated

Controlling

Whether to impose external controls or to allow employees to control their own actions

What criteria should be emphasized in employee performance evaluations

What repercussions will occur from exceeding one’s budget

Suggestions for Managers: Creating a More Ethical Culture

Be a visible role model

Communicate ethical expectations

Provide ethics training

Visibly reward ethical acts and punish unethical ones

Provide protective mechanisms so employees can discuss ethical dilemmas and report unethical behavior without fear

Organization Culture Organization Culture IssuesIssues

Creating an Ethical Creating an Ethical CultureCulture

Creating an Creating an Innovative CultureInnovative Culture

High in risk toleranceLow to moderate aggressivenessFocus on means as well as out comes

Challenge and involvement FreedomTrust and opennessIdea timePlayfulness/humorConflict resolutionDebates Risk-taking

Creating a Customer-Responsive Creating a Customer-Responsive CultureCulture

Hiring the right type of employees (ones with a strong interest in serving customers)

Having few rigid rules, procedures and regulations

Using widespread empowerment of employees

Having good listening skill in relating to customers messages

Providing role clarity to employees to reduce ambiguity and conflict and increase job satisfaction

Having conscientious caring employees willing to take initiative

Spirituality and Spirituality and Organizational CultureOrganizational Culture

Workplace SpiritualityWorkplace Spirituality The recognition that people have an inner life that

nourishes and is nourished by meaningful work that takes place in the context of community.

Characteristics of a Spiritual Characteristics of a Spiritual OrganizationOrganization

Strong sense of purpose Focus on individual development Trust and openness Employee empowerment Toleration of employees expression

Benefit of SpiritualityBenefit of Spirituality

Improved employee productivity

Reduction of employee turnover

Stronger organizational performance

Increased creativity

Increased employee satisfaction

Increased team performance

Increased organizational performance

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The External The External EnvironmentEnvironment

Defining the Defining the External External EnvironmentEnvironment

External Environment

The forces and institutions outside the organization that potentially can affect the organization’s performance.

Components of the External Environment

Specific environment: External forces that have a direct and immediate impact on the organization.

General Environment: Broad economic ,socio-cultural, political/legal, demographic, technological and global conditions that may affect the organization.

Define the External Define the External EnvironmentEnvironment

External Environment:External Environment:outside institution or forces that potentially affect an organization’s performance.

Specific Environment

Customers Suppliers Competitors Pressure groups

General Environment

Economic Political / Legal Socio cultural Demographic Technological Global

Organizational Organizational EnvironmentEnvironment

Environmental Uncertainty Environmental Uncertainty MatrixMatrix

Organizational Organizational StakeholdersStakeholders

Stakeholder Stakeholder RelationshipsRelationships

StakeholdersStakeholders

Any constituencies in the organization's external environment that are affected by the organization’s decisions and actions.

Why Manage Stakeholder Relationships?Why Manage Stakeholder Relationships?

It can lead to improved organizational performance

It’s the “right” thing to do given the interdependence of the organization and its external stakeholders.

The Global The Global MarketplaceMarketplace

Opportunities and Challenges

Acknowledging cultural, political, and economic differences

Coping with the sudden appearance of new competitors

Dealing with increased uncertainty, fear, and anxiety

Adapting to changes in the global environment

Avoiding parochialism

What’s Your Global What’s Your Global Perspective?Perspective?

ParochialismParochialism Is viewing the world solely through its own eyes and

perspectives.

Is not recognizing that others have different ways of living and working.

Is a significant obstacle for managers working in a global business world.

Is falling into the trap of ignoring others’ values and customs and rigidly applying an attitude of “ours is better than theirs” to foreign cultures.

Adopting a Global Adopting a Global PerspectivePerspective Ethnocentric Attitude

The parochialistic belief that the best work approaches and practices are those of the home country.

Polycentric Attitude

The view that the managers in the host country know the best work approaches and practices for running their business.

Geocentric Attitude

A world-oriented view that focuses on using the best approaches and people from around the globe.

Different Types of Different Types of International International OrganizationsOrganizations

Multinational Corporation (MNC)

Maintains operations in multiple countries.

Domestic Corporation

Is an MNC that decentralizes management and other decisions to the local country.

Global Company

Is an MNC that centralizes its management and other decisions in the home country.

Different Types of Different Types of International Organizations International Organizations (cont’d)(cont’d)

Transnational Corporation (Borderless Organization)

Is an MNC that has eliminated structural divisions that impose artificial geographic barriers and is organized along business lines that reflect a geocentric attitude.

Born Globals/International New Ventures (INVs)

Commit resources upfront (material, people, financing) to doing business in more than one country.

Other Forms of Other Forms of GlobalizationGlobalization Strategic Alliances

Partnerships between and organization and a foreign company in which both share resources and knowledge in developing new products or building new production facilities.

Joint Venture

A specific type of strategic alliance in which the partners agree to form a separate, independent organization for some business purpose.

Foreign Subsidiary

Directly investing in a foreign country by setting up a separate and independent production facility or office.

Mergers

Companies combining resources and management to eliminate competition and increase profitability.

The Cultural The Cultural EnvironmentEnvironment

National Culture

Is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important.

May have more influence on an organization than the organization culture.

Global Management in Global Management in Today’s WorldToday’s World

Challenges

Openness associated with globalization

Significant cultural differences (e.g., Americanization)

Adjusting leadership styles and management approaches

Risks

Loss of investments in unstable countries

Increased terrorism

Economic interdependence

CASE CASE STUDYSTUDY

The Strategy That Wouldn’t The Strategy That Wouldn’t TravelTravel

By

Micheal C. Beers(Harvard Business Review)

Questions for Questions for Case StudyCase Study

1. Why was the strategy successful at the Wichita plant and why it was a failure at Lubbock?

2. If you were in place of Karen Jimenez, what would you do to make Lubbock also like Wichita?

3. If the strategy was successful at Wichita, was it because of a person, teamwork or policies / systems? Explain

4. Discuss what skills were present in Wichita and what was missing in Lubbock.

References:References: Robbins and Coulter, Business, 9th edition, 2007

Kreitner, Management

Richard L. Daft, Management, 8th edition, 2007

John R. Schermerhorn. JR., Management, 9th edition, 2007

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QuotationQuotation

“Corporations are social institutions. If they don't serve society, they have no business existing”

Henry Mintzberg,

Management Expert

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CONCLUSIONCONCLUSION::

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