Organisations and

Environment
Class 3 Jan 18, 2011
rm2012 Google group
 Good start, 11 students 22 messages (14!)
 Peepli Live… sharecropping, farmer suicides,
agri marketing, credit, Bt brinjal,
 Malegam committee, rural tourism, dirty water,
ASEAN
 Missing – sources in a few, summaries..
 How to engage others in a conversation?
 Latest issues of EPW, DTE, Seminar, Civil
Society…
 Ideas for the new decade
Sustaining Commons:
Sustaining our Future
 The most basic questions of human
societies:

How do disparate people

come together and agree
on rules and decisions
in order to manage and
sustain resources.?

Hess 2010
 Commons
Resources shared by a
group of people

Vulnerable to enclosure,
degradation, and social
dilemmas

They can be:

• small (the family refrigerator)

• community-level (sidewalks, playgrounds, libraries)

• large, at the international and global levels (deep-sea oceans, the

atmosphere, the Internet, and scientific knowledge)
Hess 2010
 Characteristics of Commons
• Self-governing
• Participatory
• Social dilemmas
• Social capital—trust—reciprocity
• Communication & dialogue
• Locally-designed rules

Governance of shared resources is hard work

Community members are “artisans” who “craft” appropriate

institutions
Hess 2010
 Simple Complicated Complex
Following a Recipe A Rocket to the Moon Raising a Child
• The recipe is essential • Formulae are critical • Formulae have only a
and necessary limited application
• Recipes are tested to
assure replicability of • Sending one rocket • Raising one child gives
later efforts increases assurance no assurance of success
that next will be ok with the next
• No particular expertise;
knowing how to cook • High level of expertise • Expertise can help but
increases success in many specialized is not sufficient;
fields + coordination relationships are key
• Recipes produce standard
products • Rockets similar in • Every child is unique
critical ways
• Certainty of same results • Uncertainty of outcome
every time remains
• High degree of
certainty of outcome

(Diagram from Zimmerman 2003)

 Complexity
“Complexity refers to attributes of natural resources,
ecological systems, and socioeconomic and political
systems that affect the ability of resource users to
recognize how their actions affect the condition of the
resource. Complexity limits the ability of individuals to
identify the full set of possible outcomes or assign
probabilities to particular outcomes of specific actions.
Difficult to discern cause-effect relationships. Studies
that grapple with complexity often generate new
hypotheses about appropriate collective action. (Poteete,
Janssen, Ostrom. 2010)

Hess 2010
Cooperating for the common Good:
Challenging supposed impossibilities
and Panaceas
“The central question in this study is how a group of
individuals who are in an interdependent situation can
organise and govern themselves to obtain continuing
joint benefit when all face the temptation to free ride,
shirk, or otherwise act opportunistically.” (Ostrom 1990,
p.29)
 How do we govern the exploitation of natural resources?
– Some recommend the state
– Some recommend privatisation
– Evidence and now theory too of people relying on
other types of institutions: self-governance
 See Film Village Republics…
Institutions are…
 “the shared concepts used by humans in
repetitive situations organized by rules,
norms, and strategies” (Ostrom).
 "complexes of norms and behaviors that
persist over time by serving collectively
valued purposes" (Uphoff, 1986).
 the long-standing rules and rights governing
social and productive behaviour,
organisations are the 'players' and structures
(North 1990)
RURAL INSTITUTIONAL
ENVIRONMENT

Rural
Communities

Civil
Government or Society
The State

Private Sector
or Market
 Community

Civil Society
State

Private Sector
Some Scenarios

Community

Civil Society

State

Private Sector
Some Scenarios

Community

Civil Society
Private
sector

State
What is it in your context?
Assign 1
 Individually list out the number of people
whom you met during your RLLE. MR test
 Try and place these people in terms of the
four categories
 Complete the assignments by collating this
for your group and make a map of the
connections as you see in the rural
environment. Submission deadline
Wednesday Jan 20th 11am (library)
Rural Institutional environment
 Undergoing lot of change
 Mohd Yunus Banker to the Poor: Micro-Lending and
the Battle Against World Poverty.
 Chapter 2 on World Bank and how its attitude
towards MF has changed, starting as ‘sparring
partners’ due to different ideologies. The relation of
consultants with the recipient country of
patronage…
 “I am eager to put past tensions behind us and to
start with a new slate. The stakes are high.”
 Newer tensions though GoB intends takeover, so
too in AP & India…
Changing contexts
 Link between farmer suicides and repeal of
MGS of Maharashtra
 Increase in health as % of GDP from 0.9 to 2
%, what does this mean?
 APMC act being changed etc.
 Any other recent changes that you can think
of that is likely to impact the rural
environment?....
National Voluntary Sector
policy
 12 lakh Volags in India, 53 per cent of which work in
rural areas. Sector growing faster than Indian GDP.
 in 2006, the corporate sector contributed Rs 22,500
crores to the voluntary sector, about 35 per cent
more than both foreign and government funding of
Rs 8,000 crores each.

 All of which represent changes in Rural Institutional

Environment
 Organisations and
their environment
Kew and Strewdwick, 2005
Business environment: Managing
in a strategic context
Organisation and its environment

Organisation Environment
 Environment is anything outside an organisation which may
effect an organisation’s present or future activities.
Types of environment
 Environment is situational – unique to each
organisation.
 Two levels – General (societal, the far or the macro
environment) and Task (the specific, the near,
micro)
 General:
 National/ regional culture, historical background, ideologies
and values, S&T developments, level of education, legal
and political process, demography, natural resources,
economic, social and industrial structure of nation or
region.
Types of environment
 Task
 Forces relevant to individual organisation. Include
customers, suppliers, competitors, regulators, the
local labour market and specific technologies
 Most organisations have no problem analysing
task environments.
Distinction not static. Elements from general
break into task and impact organisations
Analysing general environment –
PEST analysis early 1980s
 Political / legal
 Taxation policy, stability, employment law,
IPR regime, CPR access etc.
 Economic
 Business cycles, interest rates, public
spending, money supply, inflation
 Socio-cultural
 Demographic trends, social mobility,
lifestyle, attitude to work and leisure, levels
of education, gender relations
 Technological
 R&D, inventions and innovations, speed of
tech transfer, development of systems
PESTLE analysis
 Is a useful tool for understanding the “big
picture” of the environment in which you are
operating

 By understanding your environment, you can

take advantage of the opportunities and
minimize the threats.
 
 This provides the context within which more
detailed planning can take place to take full
advantage of the opportunities that present
themselves.
PEST to PESTLE and STEEPLE
Model
 S ocial, demographic
 T echnological
 E thical
 E conomic
 P olitical
 L egislative
 E nviornmental considerations
 http://www.hantsfire.gov.uk/theservice/corporateplan
/corporateplan-consultation/corporateplan-internalre
views/corporateplan-steepleintro/corporateplan-soci
al.htm
STEEPLE
 Social: Income distribution, Demographics, Labour/Social mobility, Lifestyle
changes, Work/life balance, Portfolio careers, Education, Fashion/fads,
Health/welfare, Living conditions, Poverty levels, Job security.
 Technological: Government spending on research, Governments and industry
focus on technological effort, New discoveries and developments, Speed of
technology transfer, Rate of technological obsolescence, Energy use and costs,
Impact of changes on IT, Internet, Mobile communications, IT spend, New
communication channels.
 Economical: Global economy, Information/knowledge economy, Monetary
policy, Government spending, Unemployment policy, Taxation, Exchange rates,
inflation, Stages of the business cycle, Economic 'mood'.
 Environmental: 'Green Agenda', Global warming, Climate change, Carbon
emissions, Recycling, Environmental regulation/protection.
 Political: General election result, Lisbon strategy, White papers e.g. Actions on
Competitiveness.
 Legal: Statutory and regulatory conditions, Corporate governance, Compliance,
International trade regulations, Compliance, International trade regulations,
Competition regulation.
 Ethical: Business ethics, Consent, Client confidentiality, Official Secrets Act,
Security access, terms of business/trade, Trust, Reputation.
Why understand
environments?
 Depends on whether environment is
 stable (oil companies, nationalised banks(!), ICAR
etc),
 turbulent - dynamic and changing, uncertain.. Use
scenario planning to break complexity by looking at
range of possibilities
 Both dynamic and complex - cannot predict the
environment, foster a culture in the organisation that
welcomes and is able to cope with radical change.
 A learning organisation is that which has developed
systematic procedures to ensure that it can learn from
its environment.
Why understand
environments?
 Placid - Sit back and wait for things to happen
– Sharad Pawar on price rise!
 Reactive – firefighting
 Pro active – foresee changes and plan
responses
5 stage model of analysing
environment
1. Audit of environmental influences (STEEPLE)
2. Assessing the nature of the environment – placid,
dynamic or turbulent
3. Identification of key environmental factors
4. Identification of the competitive (intervention
strategy) position (Porter’s 5 forces)
5. Identification of principle opportunities and threats
SWOT
Doing SWOT too early without others can lead to poor
analysis
Responses to the environment
 Defenders – placid, maximizing efficiency, not on
new opportunities
 Prospectors – attracted to turbulent environments
(moneylenders), thrive on change and uncertainty
 Analysers – successful poachers, two types – one
relatively stable other dynamic
 Reactors – market followers, adjust to
environmental pressures
organisations develop their adaptive strategies based
on their perception of their environments.
Miles and Snow (Organisational Strategy 1978)
Caveats
 Do not treat mental models as cast in stone.
 They are aids for understanding and
analysis.
 Organisation leaders might be doing the
same intuitively or through mechanisms by
which they scan the environment.
 Discuss what might these have been in the
organisation you visited? Focus on their
institutional mechanisms – how do you think
they learn about their environment?
 Part 2 of assign 1