management mba & bba 789 new

8/2/2019 Management MBA & BBA 789 New

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Farhan Mir Farhan Mir

20201111 IMSIMS

Principles ofPrinciples ofManagementManagementMBA-I 1MBA-I 1stst Sec I & IISec I & II

Lecture 7,8,9Lecture 7,8,9(The Constraints (The Constraints Organizational Culture &Organizational Culture &Environment)Environment)

By: Farhan MirBy: Farhan Mir


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TopicsTopicsIntroduction

ManagementManagement

Overview and key components

Management as a Field

What are Organizations?What are Organizations?

Management Functions & Roles & ImportanceManagement Functions & Roles & Importance

History and Evolution of Management

Important ContributionsImportant Contributions

Trends and IssuesTrends and Issues

Organizational & Environmental

ConstraintsEnvironmental EffectsEnvironmental Effects

Important Environmental ElementsImportant Environmental Elements

Internal Vs. External EnvironmentInternal Vs. External Environment

Global Environment & ManagementGlobal Environment & Management


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Management andManagement andConstraintsConstraintsManagements task becomes moredifficult in the context of opensystem theory (as it has to manageinternal as well as external factors)

The Organizational Environment isclassified into two major categories

Internal (commonly known as CultureInternal (commonly known as Culture

External Environment (simply calledExternal Environment (simply calledEnvironment)Environment)

Specific

General


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The ConstraintsThe Constraints

Two Perspectives onTwo Perspectives onManagementManagement

Omnipotent View Vs. SymbolicOmnipotent View Vs. SymbolicViewView


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The Manager: How MuchThe Manager: How MuchControl?Control?

Omnipotent View

Managers are directly responsible for anManagers are directly responsible for anorganizations success or failureorganizations success or failure

The quality of the organization is determinedThe quality of the organization is determinedby the quality of its managersby the quality of its managers

Managers are held most accountableManagers are held most accountablefor an organizations performance,for an organizations performance,

yet it is difficult to attributeyet it is difficult to attributegood or poor performancegood or poor performancedirectly to their influencedirectly to their influenceon the organizationon the organization


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The Manager: How MuchThe Manager: How MuchControl? (contd)Control? (contd)

Symbolic View

Much of an organizations success or failure isMuch of an organizations success or failure isdue to external forces outside of managersdue to external forces outside of managers

controlcontrolThe ability of managers to affect outcomes isThe ability of managers to affect outcomes is

influenced and constrained by externalinfluenced and constrained by externalfactors:factors:

The economy, customers, governmentalpolicies, competitors, industry conditions,technology, and the actions ofprevious managers

Managers symbolize control andManagers symbolize control andinfluence through their actioninfluence through their action


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Organizational CultureOrganizational Culture

Internal Environment (Heavily effected by theInternal Environment (Heavily effected by thenorms and values shared by members of thenorms and values shared by members of theorganization)organization)

What is Organizational Culture?

The 7 Dimensions of Organizational CultureRisk, Attention to Detail, Outcome Orientation,Risk, Attention to Detail, Outcome Orientation,People Orientation, Team Orientation,People Orientation, Team Orientation,Aggressiveness & StabilityAggressiveness & Stability

Types (Strong Vs. Weak Culture)Sources of Culture

How employees learn organizational culture

Stories, Rituals, Material Symbols & LanguageStories, Rituals, Material Symbols & Language


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The OrganizationsThe OrganizationsCultureCultureOrganizational Culture

A system of shared meanings andA system of shared meanings andcommon beliefs held by organizationalcommon beliefs held by organizationalmembers that determines, in a largemembers that determines, in a largedegree, how they act towards eachdegree, how they act towards each

other.other.The way we do things around here.The way we do things around here.

Values, symbols, rituals, myths, and

practicesImplications:Implications:

Culture is a perception.

Culture is shared.

ulture is descri tive.


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Dimensions of OrganizationalDimensions of OrganizationalCultureCulture


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Visible Elements- How newVisible Elements- How newemployees learn cultureemployees learn culture

Rituals andceremoniesSymbols

Language &Slogans

Heroes Stories


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Strong versus WeakStrong versus WeakCulturesCulturesStrong Cultures

Are cultures in which key values areAre cultures in which key values aredeeply held and widely held.deeply held and widely held.

Have a strong influence onHave a strong influence onorganizational members.organizational members.

Factors Influencing the Strength ofCulture

Size of the organizationSize of the organization

Age of the organizationAge of the organizationRate of employee turnoverRate of employee turnover

Strength of the original cultureStrength of the original culture

Clarity of cultural values and beliefsClarity of cultural values and beliefs


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Benefits of a StrongBenefits of a Strong

CultureCultureCreates a stronger employeecommitment to the organization.

Aids in the recruitment andsocialization of new employees.

Fosters higher organizationalperformance by instilling and

promoting employee initiative.


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Contrasting OrganizationalContrasting OrganizationalCulturesCultures

Organization A

Managers must fully document all decisions

Creative decisions, change, and risks are

not encouraged.

Extensive rules and regulations exist for all

employees.

Productivity is valued over employee morale.

Employees are encouraged to stay within

their own department.

Individual effort is encouraged.

Organization B

Management encourages and rewards risk-

taking and change.

Employees are encouraged to run with ideas,and failures are treated as learning

experiences.

Employees have few rules and regulations to

follow.

Productivity is balanced with treating its people

right.

Team members are encouraged to interact with

people at all levels and functions.

Many rewards are team based.


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Organization CultureOrganization CultureIssuesIssues

Creating anEthical CultureHigh in riskHigh in risktolerancetolerance

Low to moderateLow to moderateaggressivenessaggressiveness

Focus on means asFocus on means aswell as outcomeswell as outcomes

Creating anInnovativeCulture

Challenge andChallenge and

involvementinvolvementFreedomFreedom

Trust and opennessTrust and openness

Idea timeIdea time

Playfulness/humorPlayfulness/humor

Conflict resolutionConflict resolution

DebatesDebates

Risk-takingRisk-taking


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A Case Study onA Case Study onOrganizational Culture:Organizational Culture:

Excellence at XeroxExcellence at XeroxXeroxIntroductionIntroduction

Digital solution provider and worlds top computerhardware manufacturer (Especially Copiers) and helps

develop smarter document managementHelps Analyzing how employees can most efficientlyshare documents and knowledge in the office

Among the Fortune 500 with 55,200 employeesworldwide, including 29,700 in the United States

(December 31, 2005)The company's operations are guided by customer-focused and employee-centered core values

such as social responsibility, diversity and quality

passion for innovation, speed and adaptability


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Excellence at XeroxExcellence at XeroxXerox StrategyXerox Strategy

They are committed towards quality productsfor their customers and for providing a world-class working environment for their employees

To do so they need to attract and retain world-

class peopleXerox Employment Trademark eXpressyourself yields for them innovation andleading working environment due to:

PassionPassionDiversityDiversity

IdeasIdeas

Contribution from everyoneContribution from everyone


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Xerox: ExcellenceXerox: ExcellenceThe Problem Era

Just few years back the company was fighting for its survivalJust few years back the company was fighting for its survivaland no focus on improving its HR practicesand no focus on improving its HR practices

In year 2000 the company was facing $17 billion in debt andIn year 2000 the company was facing $17 billion in debt andits stock price dropped from $63 to about $4its stock price dropped from $63 to about $4

Company suffered loses for 7 consecutive quarters andCompany suffered loses for 7 consecutive quarters andinvestigations were called against the accounting mattersinvestigations were called against the accounting matters

The ComebackShifted its product mix and offered desktop copiers for officesShifted its product mix and offered desktop copiers for officesand quality printers for publishersand quality printers for publishers

Company had an increased income to $222 million from justCompany had an increased income to $222 million from just$19 million$19 million

The reasons behind this turnaroundThe reasons behind this turnaroundFocus on Customers

Thinking about employees as a core (PeopleOrientation)

With strong values of social responsibility, diversity, qualityand innovation


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Diversity for Success: Case Study onDiversity for Success: Case Study onUPSUPS

UPSIntroductionIntroduction

Founded in 1907 as a messenger company inthe United States

the world's largest package delivery company

and a leading global provider of specializedtransportation and logistics services

Manage the flow of goods, funds, andinformation in more than 200 countries andterritories worldwide.

The Company has got a global postureUPSs workforce is multicultural,multidimensional, and reflective of the broadattributes of our global communities

FORTUNE magazine as one of the "50 BestCompanies for Minorities


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UPS and DiversityUPS and Diversity

Views about workforceViews about workforce

It is not about race or gender or backgroundrather the focus is about how much employeescare about the company or good at their jobs

1/3 of the employees are from minorities

Representation of minorities is also at eachlevel of the organization

Has a supplier diversity Program encouraging

small and minority group suppliersDiversity driving UPS towards success (may beDiversity driving UPS towards success (may beother factors but diversified workforce with newother factors but diversified workforce with newideas and flavors is a strong contributing factorideas and flavors is a strong contributing factor


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UPS and DiversityUPS and Diversity

African-Americans, Hispanics, Asian-Pacific Americans andother minorities make up 35 percent of the companys348,400 employees in the United States.

Minorities accounted for half of UPSs new employees in2005.

Women represent 28 percent of the U.S. management teamand 20 percent of the overall workforce, holding jobs frompackage handlers, to drivers, to senior management and tothe UPS Board of Directors.

Among the companys 63,000 U.S. managers, minoritieshold nearly 30 percent of those executive positions. Positionsheld include district managers, the UPS ManagementCommittee, and UPSs Board of Directors.


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TheThe

ExternalExternalEnvironmenEnvironmentt


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Task EnvironmentTask EnvironmentTask EnvironmentTask EnvironmentTask Environment: forces from

suppliers, distributors, customers,and competitors.

Suppliers: provide organization withinputs

Managers need to secureManagers need to secure reliable inputreliable inputsourcessources..

Suppliers provide raw materials, components,Suppliers provide raw materials, components,and even labor.and even labor.

Working with suppliers can be hard due toshortages, unions, and lack of substitutes.

Suppliers with scarce items can raise theprice and are in a good bargaining position.

Mana ers often refer to have man similar


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Task EnvironmentTask EnvironmentTask EnvironmentTask Environment

Distributors: organizations that helpothers to sell goods.Compaq Computer first used special computerCompaq Computer first used special computerstores to sell their computers but later soldstores to sell their computers but later soldthrough discount stores to reduce costs.through discount stores to reduce costs.

Some distributors like Wal-Mart have strongSome distributors like Wal-Mart have strongbargaining power.bargaining power.

They can threaten not to carry your product.

Customers: people who buy thegoods.

Usually, there are several groups of customers.Usually, there are several groups of customers.

For Compaq, there are business, home, &government buyers.


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Task EnvironmentTask EnvironmentTask EnvironmentTask EnvironmentCompetitors: other organizations thatproduce similar goods.

Rivalry between competitorsRivalry between competitors is usually theis usually themost serious force facing managers.most serious force facing managers.

High levels of rivalry often means lower prices.High levels of rivalry often means lower prices.

Profits become hard to find.

Barriers to entry keep new competitors outBarriers to entry keep new competitors outand result fromand result from::

Economies of scale: cost advantages due tolarge scale production.

Brand loyalty: customers prefer a givenproduct.


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EnvironmentEnvironment

EnvironmentEnvironment

Organizational Environment: those

forces outside its boundaries that canimpact it.Forces can change over time and are made up ofForces can change over time and are made up ofOpportunities and Threats.Opportunities and Threats.

Opportunities: openings for managers

to enhance revenues or open markets.New technologies, new markets and ideas.New technologies, new markets and ideas.

Threats: issues that can harm anorganization.

economic recessions, oil shortages.economic recessions, oil shortages.

Managers must seek opportunitiesand avoid threats.


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The General EnvironmentThe General EnvironmentThe General EnvironmentThe General Environment

Consists of the wide economic,technological, demographic andsimilar issues.

Managers usually cannot impact or controlManagers usually cannot impact or controlthese.these.

Forces have profound impact on the firm.Forces have profound impact on the firm.

Economic forces: affect the

national economy and theorganization.

Includes interest rate changes,Includes interest rate changes,unemployment rates, economic growth.unemployment rates, economic growth.

When there is a strong economy, peopleWhen there is a strong economy, people


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Technological forces: skills & equipmentused in design, production anddistribution.

Result in new opportunities or threats to managers.Result in new opportunities or threats to managers.Often make products obsolete very quickly.Often make products obsolete very quickly.

Can change how we manage.Can change how we manage.

Socialcultural forces: result fromchanges in the social or national cultureof society.

Social structure refers to the relationships between peopleSocial structure refers to the relationships between peopleand groups.and groups.

Different societies have vastly different socialstructures.

National culture includes the values that characterize aNational culture includes the values that characterize asociety.society.

Values and norms differ widely throughout the world.

These forces differ between cultures and over time.These forces differ between cultures and over time.


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Demographic forces: result from

changes in the nature,composition and diversity of apopulation.

These include gender, age, ethnic origin, etc.These include gender, age, ethnic origin, etc.For example, during the past 20 years,women have entered the workforce inincreasing numbers.

Currently, most industrial countries are aging.Currently, most industrial countries are aging.This will change the opportunities for firms

competing in these areas.

New demand for health care, assisting living

can be forecast.


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Political-legal forces: result from

changes in the political arena.These are often seen in the laws of a society.These are often seen in the laws of a society.Today, there is increasing deregulation of many state-Today, there is increasing deregulation of many state-

run firms.run firms.

Global forces: result fromchanges in internationalrelationships between countries.

Perhaps the most important is the increase in economicPerhaps the most important is the increase in economic

integration of countries.integration of countries.Free-trade agreements (GATT, NAFTA, EU) decreasesFree-trade agreements (GATT, NAFTA, EU) decreasesformer barriers to trade.former barriers to trade.

Provide new opportunities and threats to managers.Provide new opportunities and threats to managers.


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How the EnvironmentHow the EnvironmentAffects ManagersAffects Managers

Environmental Uncertainty

The extent to which managers haveThe extent to which managers haveknowledge of and are able to predictknowledge of and are able to predict

change their organizations externalchange their organizations externalenvironment is affected by:environment is affected by:

Complexity of the environment:the number of components in an

organizations external environment.

Degree of change inenvironmental components: how

dynamic or stable the externalenvironment is.

Reducing EnvironmentalReducing EnvironmentalReducing EnvironmentalReducing Environmental


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Reducing EnvironmentalReducing EnvironmentalImpactImpactReducing EnvironmentalReducing EnvironmentalImpactImpact

Managers can counterenvironmental threats by reducingthe number of forces.

Many firms have sought to reduce the number ofMany firms have sought to reduce the number ofsuppliers it deals with which reduces uncertainty.suppliers it deals with which reduces uncertainty.

All levels of managers should workto minimize the potential impact ofenvironmental forces.

Examples include reduction of waste by first lineExamples include reduction of waste by first line

managers, determining competitors moves bymanagers, determining competitors moves bymiddle managers, or the creation of a new strategymiddle managers, or the creation of a new strategyby top managers.by top managers.


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Exhibit 3.10Exhibit 3.10

Environmental UncertaintyEnvironmental UncertaintyMatrixMatrix


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Responding To TheResponding To TheEnvironmentEnvironmentAdapting to the environment

company adjusts its structures and work processescompany adjusts its structures and work processes

in uncertain environment caused byin uncertain environment caused by complexitycomplexity,,companies tend to decentralize decision makingcompanies tend to decentralize decision making

empowerment- process of sharing power withemployees

enhances their confidence in their ability toenhances their confidence in their ability toperform their jobsperform their jobs

engenders beliefs that they are influentialengenders beliefs that they are influentialcontributors to the firmcontributors to the firm

in uncertain environments caused byin uncertain environments caused by

dynamismdynamism

,,

companies tend to establish more flexible structurescompanies tend to establish more flexible structures

bureaucracy- suited for stable environments (lowdynamism)

organic - provides flexibility required for changingenvironments (high dynamism)

d i


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Boundary SpanningBoundary SpanningBoundary SpanningBoundary SpanningManagers must gain access toinformation needed to forecastfuture issues.

Boundary spanning is the practice of

relating to people outside the organization.Seek ways to respond and influence stakeholderSeek ways to respond and influence stakeholderperception.perception.

By gaining information outside, managers canBy gaining information outside, managers can

make better decisions about change.make better decisions about change.More management levels involved inspanning, yields better overall decisionmaking.


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Boundary Spanning RolesBoundary Spanning RolesBoundary Spanning RolesBoundary Spanning Roles

Managers in boundaryspanning roles feedback

information to other managers


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Scanning and MonitoringScanning and MonitoringScanning and MonitoringScanning and MonitoringEnvironmental scanning is animportant boundary spanningactivity.

Includes reading trade journals, attendingIncludes reading trade journals, attendingtrade shows, and the like.trade shows, and the like.

Gatekeeping: the boundaryspanner decides what informationto allow into organization andwhat to keep out.

Must be careful not to let bias decide whatMust be careful not to let bias decide whatcomes in.comes in.

Interorganizational Relations:firms need alliances globally to

best utilize resources.

k h ld


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StakeholderStakeholderRelationshipsRelationships

StakeholdersAny constituencies in theAny constituencies in theorganizations external environmentorganizations external environmentthat are affected by the organizationsthat are affected by the organizations

decisions and actionsdecisions and actions

Why Manage StakeholderRelationships?

It can lead to improved organizationalIt can lead to improved organizationalperformance.performance.

Its the right thing to do given theIts the right thing to do given the

interdependence of the organizationinterdependence of the organization

M i S k h ld


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Managing StakeholderManaging StakeholderRelationshipsRelationships1. Identify the organizations external

stakeholders.

2. Determine the particular interestsand concerns of the externalstakeholders.

3. Decide how critical each external

stakeholder is to the organization.

4. Determine how to manage eachindividual external stakeholder

relationship.

i i lO i ti l


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OrganizationalOrganizationalStakeholdersStakeholders

M M t


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Managers MustManagers Must

Remain alert to internal and externalenvironments.

Must forecast and plan for the

changes they suspect will come.Must cultivate a sensible and

controlled reactive behavior towardchanges.

Provide an imaginative program tomanage and capitalize on changes.

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Influencing Environments

Influence legislation.

Use the power of the media

to influence public opinion

and public policy.

Build alliances and raisefunds to push their

agendas.

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