Ch 2-MAGT 101

Organizational Culture and

Environment
Learning Outcomes
• Follow this Learning Outline as you read and study this chapter.
• 2.1 The Manager: Omnipotent Or Symbolic?
• Contrast the actions of managers according to the omnipotent and symbolic views.
• Identify the two constraints on managerial discretion.

• 2.2 Organizational Culture

• Identify the seven dimensions of organizational culture.
• Discuss the impact of a strong culture on organizations and managers.
Learning Outcomes
• 2.2 Organizational Culture (cont’d)
• Explain how a culture is formed and maintained.
• Describe how culture affects managers.

• 2.3 Current Organizational Culture Issues

• Describe the characteristics of an ethical culture, an innovative culture, and a
customer-responsive culture.
Learning Outcomes
• 2.4 The Environment
• List the components of the specific and general environments.
• Explain the two dimensions of environmental uncertainty.
• Identify the most common organizational stakeholders.
• List the four steps in managing external stakeholder relationships.
 2.1 The Manager: Omnipotent
Or Symbolic?
1. Contrast the actions of managers according to the omnipotent and
symbolic views.

2. Identify the two constraints on managerial discretion.

 The Manager:
Omnipotent or Symbolic?
•Omnipotent View of Management
•Managers are directly responsible for an organization’s success or failure.
•The quality of the organization is determined by the quality of its managers.
•Managers are held accountable
for an organization’s performance,
yet it is difficult to attribute
good or poor performance
directly to their influence
on the organization.
 The Manager:
Omnipotent or Symbolic? (cont’d)
•Symbolic View of Management
•Much of an organization’s success or failure is due to external forces outside of managers’ control.
•The ability of managers to affect outcomes is influenced and constrained by external factors.
•The economy, customers, governmental policies, competitors, industry conditions, technology, and
the actions of previous managers.
•Managers symbolize control and influence through their action.
Exhibit 2–1 Constraints on Managerial Discretion
 2.2 Organizational Culture
1. Identify the seven dimensions of organizational culture.

2. Discuss the impact of a strong culture on organizations and managers.

3. Explain how a culture is formed and maintained.

4. Describe how culture affects managers.

 The Organization’s Culture
•Organizational Culture
• A system of shared meanings and common beliefs held by organizational
members that determines, in a large degree, how they act towards each
other.
• “The way we do things around here.”
• Values, symbols, rituals, myths, and practices
• Implications:
• Culture is a perception.
• Culture is shared.
• Culture is descriptive.
Exhibit 2–2 Dimensions of Organizational Culture
 Strong Versus Weak Cultures
•Strong Cultures
• Are cultures in which key values are deeply 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 employee turnover
• Strength of the original culture
• Clarity of cultural values and beliefs
 Benefits 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.
Exhibit 2–3 Strong Versus Weak
Organizational Cultures
 Organizational Culture
•Sources 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 Culture
• Recruitment of like-minded employees who “fit”
• Socialization of new employees to help them adapt to the culture
 How Employees Learn Culture
•Stories
• Narratives of significant events or actions of people that convey the spirit of
the organization.
•Rituals
• Repetitive sequences of activities that express and reinforce the values 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 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 or weakness of the organizational culture.

Simple rule for getting ahead in an organization:

Find out what the organization rewards and act accordingly.
• Exhibit 2-4 Managerial Decisions Affected by Culture
• 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 employees’ jobs.
• Whether tasks should be done by individuals or in teams.
• The degree to which department managers interact with each other.
• Exhibit 2-4 Managerial Decisions Affected by Culture (cont’d)
• 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.
 2.3 Current Organizational Culture Issues
1. Describe the characteristics of an ethical culture, an innovative culture, and a
customer-responsive culture.
 Organization Culture Issues
•Creating an Ethical Culture
• High in risk tolerance
• Low to moderate aggressiveness
• Focus on means as well as outcomes
Organization Culture Issues (cont’d)
•Creating an Innovative Culture
• Challenge and involvement
• Freedom
• Trust and openness
• Idea time
• Playfulness/humor
• Conflict resolution
• Debates
• Risk-taking
 Exhibit 2-5 Creating an 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 Issues (cont’d)
•Creating a Customer-Responsive Culture
• Hiring the right type of employees (those with a strong interest in serving
customers).
• Having few rigid rules, procedures, and regulations.
• Using widespread empowerment of employees.
• Having good listening skills 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.
 2.4 The Environment
1. List the components of the specific and general environments.

2. Explain the two dimensions of environmental uncertainty.

3. Identify the most common organizational stakeholders.

4. List the four steps in managing external stakeholder relationships.

 Defining the External Environment
•External Environment
• Those factors and forces outside the organization that 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.
Exhibit 2-6 The External Environment
 Specific Environment
- An organization exists to meet the
needs of customers who use its output.
- Customers represent potential
uncertainty to an organization because
their tastes can change or they can
become dissatisfied with the
organization’s products or service.
Specific Environment (cont’d)
- Suppliers ensure a steady flow of
needed inputs (supplies).
- Limited or delayed in delivery can
constrain managers’ decisions and
actions.
- Suppliers also provide financial
and labor inputs.
Specific Environment (cont’d)
- All organizations ‒ profit and not-for-
profit ‒ have competitors.
- Managers cannot afford to ignore the
competition.
 Specific Environment (cont’d)
• Managers must recognize
special-interest groups that attempt
to influence the actions of
organizations.
Public
Pressure
Groups