2 - The Management Environment

Dimensions of Uncertainty

(1) Degree of predictable change - Stable/Dynamic Environment (2) Degree of Environmental Complexity

How Does Organizational Culture Affect Managers?

(1) Its effect on what employees do or how they behave (2) Its effects on what managers do

External Environment Effects on Managers

(1) Through its impact on jobs and employment. (2) Through the environmental uncertainty that is present. (3) Through the various stakeholders relationships that exist between and organization and its external constituencies.

(1) Jobs and Employment External Environment Effects on Managers

- Affects the types of jobs that are available. - Affects how these jobs are managed and created.

How Does Culture Affect What Managers Do?

- An organization's culture, especially a strong one, influences and constrains the ways managers plan, organize, lead, and control.

Good Managers

- Anticipate change. - Exploit opportunities. - Correct poor performances. - Lead their organization.

Dimensions of Organizational Culture

- Attention to detail: Degree to which employees are expected to exhibit precision, analysis and attention to detail. - Outcome orientation: Degree to which managers focus on results or outcomes rather than on how these outcomes are achieved. - People orientation: Degree to which management decisions take into account the effects on people in the organization. - Team orientation: Degree to which work is organized around teams rather than individuals. - Aggressiveness: Degrees to which employees are aggressive and competitive rather than cooperative. - Stability: Degree to which organizational decisions and actions emphasize maintaining the status quo. - Innovation and Risk Taking: Degree to which employees are encouraged to be innovative and the take risk.

Age Groups

- Baby-Boomers: born between-1964 - Gen X: 1965-1977 - Gen Y/Millennials: 1978-1994 - Post Millennials/iGeneration: teens and middle-schoolers

Organizational Stakeholders

- Customers - Employees - Unions - Shareholders - Communities - Suppliers - Media -Government - Competitions - Trade and Industry Associations - Competitors - Social and Political Action Groups

"Great Recession"

Began with turmoil in home mortgages markets in the United States as many homeowners found themselves unable to make their payments. Affected business as credit markets collapsed. Credit was no longer readily available to fund business activities.

Components of the External Environment

- Economic (interest rates, inflation, changes in disposable income, stock market fluctuations and business cycle stages.) - Global (Encompasses issues associated with globalization and a world economy.) - Political/Legal (Looks at federal, local and state laws, as well as laws from other countries and global laws. Political condition and stability.) - Sociocultural (Societal and cultural factors such as values, attitudes, trends, traditions, lifestyles, beliefs, tastes and patterns of behavior.) - Technological (Scientific or industrial innovation) - Demographics (Trends in population characteristics such as age, race, gender, education level, income, family composition, geographic location.)

Reasons that lead to the "Great Recession"

- Excessively low interest rates for a long period of time. - Fundamental flaws in the U.S. housing market. - Massive global liquidity.

(2) 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

How Do Employees Learn the Culture?

- Organizational stories: narrative tales of significant events or people. - Corporate rituals: repetitive sequences of activities that express and reinforce important organizational values and goals. - Material symbols or artifacts: layout of facilities, how employees dress, size of offices, material perks provided to executives, furnishing and so forth. - Language: special acronyms; unique terms to describe equipment, key personnel, customers, suppliers, processes, products.

Managers Decisions Affected by Culture

- Planning - Organizing - Leading - Controlling

(1) 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

(3) Leading

- The degree to which managers are concerned - What leadership styles are appropriate - Whether all disagreements (even constructive ones) should be eliminated.

Where Does Culture Come From?

- Usually reflects the vision or mission of founders. - Founders projects an image of what the organization should be and what its values are. - Founders can "impose" their vision on employees because of new organization's small size. - Organizational members create a shared history that blinds them into a community and reminds them of "who they are"

(4) Controlling

- What repercussions will occur from exceeding one's budget. - What criteria should be emphasized in employee performance evaluations - Whether to impose external controls or to allow employees to control their own actions.

(2) Assessing Environmental Uncertainty External Environment Effects on Managers

Amount of uncertainty found in the environments that can affect organizational outcomes.

How Does Culture Affect What Employees Do?

An organizational culture has an effect on what employees do, depending on how strong or weak the culture is.

Stakeholders

Any constituencies in an organization's environment that are affected by the organization's decisions and actions. These groups have a stake in or are significantly influenced by what the organization does. They can influence the organization and may impact decisions and actions.

Cell 4

Dynamic & Complex

Cell 2

Dynamic & Simple

Organizational Culture

Each of us has a unique personality that influences the way we act and interact. An organization has a personality too, we call it culture.

Culture is Shared

Even though individuals may have different backgrounds or work at different organizational levels, they tend to describe the organization's culture in similar terms.

Factors that Influence Performance

Factors over which managers have little control: Economy, customers, governmental policies, competitor's actions, etc.

Culture is Descriptive

It's concerned with how members perceive or describe the culture, not with whether they like it.

Culture is Perceived

It's not something that can be physically touched or seen, but employees perceive it on the basis of what they experience within the organization.

Symbolic View of Management

Manager's ability to affect performance outcomes is constrained by external factors. Managers don't have a significant effect on an organization's performance.

Omnipotent View of Management

Managers are directly responsible for an organization's success of failure. Differences in performance are due to decisions and actions of managers.

External Environment

Refers to factors, forces, situations and events outside the organization that affect its performance. It includes several components

Environmental Uncertainty

Refers to the degree of change and complexity in an organization's environment.

Cell 3

Stable & Complex

Cell 1

Stable & Simple

Demographics

The characteristics of a population used for purposed of social studies. Have significant impact on how managers manage. Age, sex, race, educational level, ethnic makeup, employment status, geographical location. etc.

(3) Managing and Stakeholders Relationships External Environment Effects on Managers

The more obvious and relationships, the more influence managers will have over organizational outcomes.

Environmental Complexity

The number of components in an organization's environment and the extent of knowledge that the organization has about these components.

Strong Culture

Those in which the key values are deeply held and widely shared. Have a greater influence on employees than on weaker cultures. The more the employees accept the organization's key values and the greater their commitment to these values, the stronger the culture is. The stronger a culture becomes, the more it affects what the employees do and the way managers plan, organize, lead and control. The stronger the organization's culture, the less managers need to be concerned with developing formal rules and regulations.