Chapter III

Organizational Culture and Environment

A. Organizational culture
I. What is organizational culture?
1. Definition
2. Culture Assessment
II. The source of culture
III. Influence on management practice

B. Environment
I. What is environment?
1. General environment
2. Specific environment
3.Internal environment
II. Influence on management practice
 Organizational Culture
III
and Environment
ORGANIZATIONAL CULTURE

What is an Organizational Culture ?

Definitions of Culture
The way things are done around here
(M.Bower,1966).
The dominant values espoused by an
organization" (T.Deal & A. Kennedy, 1982).
 The philosophy that guides an
III organization's policy toward employees and
customers (R.Pascal & A.Athos, 1981).

The basic assumptions and beliefs that are

shared by members of an organization"
(E.Schein, 1985) .

A system of shared meaning within an

organization that determines, in large degree
how employees act (Stephen P.Robbins, 1994).
 A Closer Look At What An
III Organizational Culture Means

Physical Aspects Attitudes and

Values and Beliefs Behaviors

Patterns of Behavior

Culture

Purposes
 How to Assess an Org. Culture?
III
High Low
Member identity
Group emphasis
Unit integration
Control
People focus
Risk tolerance
Reward Criteria
Conflict tolerance
Means-ends orientation
Open system focus
 The Sources of Culture
III
Artifacts

Values and Beliefs

Patterns of Behaviors
Basic
Assumptions
 The Sources of Culture
 The founders biases and assumptions.
 What first employees learn subsequently
from their own experience.
 Internalize value and belief
 At this point others are brought into
organization, and a common history
begins to be built.
 Influence on Management Practice?
III
ADMINISTRATION

CULTURE CULTURE  Goals

Look busy, even if you are not.
Before you make a decision , run it
by your boss so that he or she is never
surprised .
We make our product only as good as
the competition forces us to.
 ORGANIZATIONAL ENVIRONMENT
III
What is Environment ? Outside
institutions or forces that potentially affect
an organization's performance.
What is Specific Environment ?
The part of the environment that is directly
relevant to the achievement of an
organization's goals.

What is General Environment ?

Everything outside the organization.
 External
Stakeholders

General environment Internal

- International Stakeholders

- Social culture
Specific environment
- Economy -suppliers
Internal environment
-Customers -Employees
-Politic-Legal
- Competitors -Owners
-Board of directors
-Technology -Creditors
-Structure
-Demographic -Government
- Resource
- pressure group

-Media
 The General Environment

The General
Environment or macro
environment includes six
forces:
International
Social culture
Economic
Political-legal
Technological
Demographic
 The General Environment
International Forces
changes in the economic,
political, legal, and
technological global system
that may affect an
organization
Economic Forces consist of
general economic conditions
and trends—unemployment,
inflation, interest rates,
economic growth—that may
affect an organization’s
balance
Social culture Forces
influences and trends
originating in a country,
society, or culture’s human
relationships and values that
may affect and organization
Political-legal Forces
changes in the way
politics shape laws and
shape the opportunities
for and threats to an
organization
Technological Forces new
developments for
transforming resources
into goods or services
Demographic Forces
influences on an
organization arising
from changes in
characteristics of a
population—age,
gender or ethnic origin
The Specific Environment
The Specific Environment
consists of 11 groups that present
you with daily tasks to handle:
Suppliers
Customers
Competitors
Creditors
Government regulators
Distributors
Pressure Group
Mass media
Strategic allies
Local communities
Financial institutions
Special-interest groups
 The Specific Environment
Customers those who pay Strategic Allies describe
to use an organization’s the relationship of two
organizations who join forces
goods or services to achieve advantages
Competitors people or neither can perform as well
organizations that alone
compete for customers or Pressure Group
resources unions and associations—as a
rule of thumb unions
Distributor is a person or represent hourly workers,
an organization that helps associations tend to
another organization sell represent salaried workers
its goods and services to
customers
 The Specific Environment
Local Communities
schools and municipal
governments rely on the
organization for their tax
base—families and
merchants depend on the
organization for its payroll for
their livelihood
Financial Institutions
entrepreneurs may rely on
credit cards, established
companies need loans and
rely on lenders such as
commercial banks,
investment banks, and
insurance companies
Government Regulators
regulatory agencies that
establish ground rules under
which organizations can
operate
Special Interest Groups
groups whose members try
to influence specific issues
Mass Media no manager
can afford to ignore the
power of the mass media—
most organizations have a
public-relations person or
department to communicate
effectively with the press
 Internal Environment (Stakeholders)
Employees In many of today’s forward looking organizations,
employees are considered the “talent”—the most
important resource

Owners Owners of an organization consist of all those who

can claim it as their legal property

Board of Its members are elected by stockholders to see that

Directors the company is being run according to their best
interests—in nonprofit organizations, called board of
trustees, or board of regents

Structure A formal system of task and reporting relationships

that coordinates and motivates organizational
members so that they work together to achieve
organizational goals.

Asset such as people, machinery, raw materials,

 Influence on Management Practice?

SWOT Analysis (Michael Porter)

Internal Environment analysis External Environmental
analysis
Strength Weakness Opportunity Threats